JOLT Digest

By Nathan Lovejoy

Lime Wire Damages Limited To One Statutory Damage Award Per Work

Judge Kimba Wood ruled on March 10th that the statutory damages provision of the Copyright Act authorizes only one damage award per work infringed rather than one award for every infringement. Wood noted that had she adopted the record industry plaintiff’s interpretation the potential damages against the file-sharing software company would be “more money than the entire recording industry has made since Edison’s invention of the phonograph in 1877.” Wood granted summary judgment against Lime Wire in May, and issued an injunction in October which required Lime Wire to cease distribution of its popular program. The trial for damages is set for May 2nd.

AT&T’s Acquisition of T-Mobile May Face Serious Scrutiny

An FCC official indicated to the Wall Street Journal that AT&T’s planned acquisition of T-Moble — which would make the company the largest mobile phone service, surpassing Verizon — would undergo serious scrutiny, saying “[i]t will be a steep climb.” This likely comes as no surprise to AT&T, as the WSJ notes elsewhere that “AT&T seems to understand what it’s up against.” The acquisition deal was announced last week.

Netflix’s Customer Data Practices Challenged

Five plaintiffs have alleged that Netflix has violated the Video Privacy Protection Act (“VPPA”) through its practice of collecting and retaining records of streaming and rental activity of its customers. The VPPA mandates that video rental companies destroy old records that contain personally identifiable information. This law was passed in the wake of Judge Robert Bork’s Supreme Court nomination hearings, during which his video rental history was published.

Righthaven Lawsuit Dismissed On Fair Use Grounds

At a hearing last week, U.S. District Judge James Mahan said that he would dismiss a copyright infringement claim brought by the private enforcement outfit Righthaven on behalf of the Las Vegas Review Journal (“LVRJ”). After the Oregon-based non-profit Center for Intercultural Organizing posted a full-text copy of a LVRJ article on their website, Righthaven filed suit last August without any prior contact or take-down requests. In November, Judge Mahan requested that the parties brief the fair use issue. Righthaven’s for-profit approach to copyright enforcement has been heavily criticized; Mahan’s ruling was welcomed by critic EFF, who represent defendants in other Righthaven cases. Righthaven has filed 250 lawsuits since March 2010, and has suffered one other loss on a fair use claim.

Written by Greg Tang
Edited by Ian Wildgoose Brown
Editorial Policy

Intel, the world’s largest semiconductor manufacturer, owes its global leadership position to its x86 microprocessors. Intel and its main competitor, Advanced Micro Devices (AMD), command 80.4% and 11.5% of the microprocessor market, respectively. In other words, over 90% of the world’s computers have brains that only understand the x86 instruction set for translating software instructions into computer functioning. Consequently, most computer programs support, if not exclusively, x86 microprocessors. The fact that AMD is their sole surviving competitor in the x86 microprocessor industry is testament to the success of Intel’s aggressive business and legal tactics: the market for almost any other computer hardware component is certain to have a multitude of competitors from around the globe.

Throughout its history, Intel constantly has explored the outer frontiers of the high-tech industry’s legal landscape as it asserted its market dominance, particularly when threatened by competition, and repeatedly has been forced to adjust its strategy when the courts found that it pushed too far. By zealously pursuing this strategy against AMD, Intel has kept AMD at a distant second place in the microprocessor market, despite AMD often offering superior products at lower prices. But Intel occasionally gets in trouble for its liberal use of business and legal force towards AMD. In the last two years, Intel saw the end to several high-profile antitrust cases that it had been tangled up in for years. In May 2009, the European Commission fined Intel a record 1.06 billion Euros for abusing its dominant market position. On November 12, 2009, Intel settled all outstanding antitrust and patent cross-licensing disputes with rival AMD for $1.25 billion. And more recently in August 2010, Intel settled its antitrust case with the FTC by agreeing to several broad restrictions on its relationship with computer manufacturers and its competitors. But Intel’s legal strategy of “trial and error” stems from the company’s formative years, which coincided with the advent of the personal computer. (more…)

By Kassity Liu

Judge Orders Copyright Plaintiff to Justify Joining Thousands of Defendants in a Single Lawsuit

Ars Technica reports that Federal Judge Rosemary Collyer ordered the US Copyright Group to explain why joining thousands of anonymous “John Does” into one lawsuit is permissible under the Federal Rules of Civil Procedure (FRCP). The judge, after encountering one case that was filed against 4,577 anonymous P2P defendants, issued the order requiring the Group to “convince [her] within two weeks that jamming 4,577 people into a single lawsuit is a proper use of the court system.” In an amicus brief filed by the ACLU and EFF, the two organizations argued that this type of joinder is improper according to FRCP 20, which states that a plaintiff may only join a defendant in a lawsuit if the plaintiff is able to “assert . . . relief jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences.” If it permits this suit, the court runs the risk of denying a fair trial to a large number of defendants; however, forcing the plaintiff to pursue a case against each individual defendant may result in undue delay and expense.

Ninth Circuit Decision may Swallow the Protections Afforded by the First Sale Doctrine

Ben Sheffner reports in his blog that the Ninth Circuit recently posted the oral arguments given by the opposing parties in UMG Recordings, Inc. v. Augusto. The case will address the scope of the first sale doctrine, which places limitations on the control of copyright owners over the reselling or distribution of their products. The Electronic Frontier Foundation provides an overview of the case. In 2007, Universal Music Group (UMG) sued Troy Augusto for reselling its promotional CDs, alleging that the reselling violated “its exclusive right to distribute its works under 17 USC § 106(3)” because these CDs were only licensed “for a limited purpose to a limited group.” The district court had relied upon an obscure postal statute that “characterize[d] unordered merchandise as a gift” (internal quotations omitted) to find that the reselling was protected by the first sale doctrine and thus did not violate U.S. copyright law. If the Ninth Circuit rules for UMG, then copyright owners would gain the power to limit the distribution of their products using limited license labels.

FTC to Launch Investigation in Apple’s Exclusionary Practices with its Mobile Operating System

Ars Technica reports that the FTC is investigating whether Apple’s decision to allow only certain third-party compilers to place software and data on its mobile operative system constitutes a violation of U.S. antitrust law. The investigation is still in its early stages and has not become public, but inside sources suggest that the FTC and the U.S. Department of Justice settled their rumored debate over which agency would investigate Apple’s practices. Last month, Ars Technica reported on the discussions between the two agencies regarding “which one [would] launch the antitrust inquiry” that preceded the current FTC investigation. It is unknown which companies are behind the complaint to the FTC; both Adobe and Google are listed as potential parties.

Intel and AMD announce $1.25 billion settlement

By Abby Lauer – Edited by Ian C. Wildgoose Brown

On Thursday, Intel announced that it will pay $1.25 billion to Advanced Micro Devices (AMD) to settle AMD’s antitrust complaints in the U.S., Europe, Japan and South Korea. According to the terms of the settlement, Intel agreed to refrain from engaging in tactics involving computer manufacturers that would exclude AMD from the microprocessor market. The companies also resolved to drop their patent dispute and enter into a five-year cross licensing agreement.

The NY Times provides an overview of the settlement and other information about Intel and AMD. Ars Technica provides strategic analysis; the WSJ Law Blog provides opinions of antitrust experts and PCWorld provides additional commentary.
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