H&R Block Tax Servs., Inc. v. Jackson Hewitt Tax Service, Inc., No. 6:08-cv-37 (E.D. Tex. Nov. 10, 2009)
Slip Opinion (hosted by Patently O)

Magistrate Judge Love, sitting in the United States District Court for the Eastern District of Texas, found several of H&R Block’s financial instrument patents invalid, and recommended that Jackson Hewitt’s motion for summary judgment be granted-in-part.

The court applied the machine-or-transformation test from In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), cert. granted 77 U.S.L.W. 3656 (U.S. Jun. 1, 2009) (No. 08-964), to H&R Block’s computerized systems patents as well as to its methods patents. In so doing, the court extended Bilski beyond process patents. Only one of the patents survived the machine-or-transformation test and the remaining patents were held invalid under 35 U.S.C. § 101.

The original complaint is available here. Patent Storm has a helpful explanation of one of the patents. Patently O and the 271 Patent Blog both provide brief summaries of the case.

There were essentially four patent claims at issue in this case, each of which involved using rights to future government payments to acquire present purchasing power. The ‘862 patent concerned a computerized system that assigned an individual’s right to a government payment to a third party sponsor in exchange for a spending vehicle offered by that third party (e.g., a debit card or coupons). The ‘829 patent, a methods claim, involved preparing tax returns and enabling taxpayers to assign a portion of their estimated income tax refund in exchange for a spending vehicle from a third party. The ‘425 patent included both systems claims and method claims, and involved estimating a person’s income tax refund in a future year, providing a loan on the basis of the estimated amount, and assigning the income tax refund to the lender.

H&R Block filed suit against Jackson Hewitt, alleging infringement of its patents. Jackson Hewitt filed a motion for summary judgment, claiming that all asserted patent claims were invalid.

The case is significant for its treatment and use of Bilski. In Bilski, the Federal Circuit held that the machine-or-transformation test is the governing test for determining patent eligibility of a process claim under § 101. That is, the process must either be tied to a particular machine or it must transform an “article.” An “article” can be electronic data so long as the data represents physical and tangible objects. However, the transformation of public or private legal obligations or relationships cannot meet the test because they are neither physical objects nor representative of physical objects. The machine or transformation must impose meaningful limits on the claim’s scope, and must not merely be insignificant extra-solution activity. JOLT Digest further discusses Bilski here and here.

In dealing with the systems claims, the district court was prepared to assume that the claims in fact described systems rather than processes. However, the court nevertheless applied the machine-or-transformation test, warning against pigeonholing subject matter. The court noted that the ‘862 patent “system” consisted of a computer and certain financial relationships between entities. Because financial relationships are abstract intellectual concepts and not patentable, the court found that, without the computer component, the ‘862 claims would certainly be unpatentable. The court held that the computer component was merely an insignificant, extra-solution component of the claimed system. Reasoning by analogy with Bilski, the court concluded that if an extra-solution step is insufficient to render an otherwise unpatentable process claim valid, an extra-solution component is insufficient to render an otherwise unpatentable system claim valid. The court applied essentially the same reasoning to the ‘425 patent system claims.

When it came to the process or method claims, the district court found that none passed the transformation prong of Bilski. The court found that the manipulated data represented legal obligations and relationships, and that money is simply a representation of a legal obligation or abstract concept. The ‘425 patent method claims failed the machine prong because the computer was used only for data-gathering, which Bilski had held was insufficient to make a process patent-eligible. However, H&R Block successfully defended its ‘829 patent on the machine prong. The court held that the use of a computer to execute an agreement between a taxpayer and a third party was not insignificant extra-solution activity, and imposed meaningful limits on the claim. Accordingly, those claims were directed to patentable subject matter.

Although the district court described the machine-or-transformation test as merely “helpful” for “illuminating” issues in systems claims, it applied the test as though it governed the outcome. This case demonstrates the potential reach of Bilski, currently being considered by the Supreme Court (oral argument heard on Nov. 10, 2009; WSJ.com provides commentary on the oral argument). It also illustrates the uncertainty of the Bilski test: given that agreements were involved in all the financial instruments, it is far from obvious that ‘829 should have survived.

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.

Court Issues TRO Against Sales of Beatles Music “Simulation”

Ars Technica reports that on November 5, a Central District of California judge issued a temporary restraining order (TRO) against BlueBeat.com, a website offering 25-cent downloads and free streaming of thousands of copyrighted songs, most notably including the entire Beatles catalog. The order is part of a suit filed on November 3 by Capitol, EMI, Priority, and Virgin Records, claiming copyright infringement and various state law violations. In its ill-received opposition to the TRO, BlueBeat asserted in part that the sound recordings it sells were not copied from the originals, but instead were “independently developed” through a “psycho-acoustic simulation” process.

New York Files Suit Against Intel

New York Attorney General Andrew Cuomo filed an antitrust lawsuit against Intel on November 4, The New York Times and The Washington Post report. The complaint focuses on Intel’s relationships with Dell, Hewlett-Packard, and IBM, asserting that the company has used what amounts to coercion and bribery to ensure the use of its chips over those of its main competitor, Advanced Micro Devices. This is the second antitrust action taken against Intel in the U.S — the first, an FTC administrative complaint, was filed in 1998 and later settled. Since 2005, however, Intel has battled and lost antitrust disputes in the EU, Japan, and South Korea.

Anti-Net Neutrality Bill Introduced in House

On October 30, Rep. Marsha Blackburn (R-TN) introduced a House bill that would ban the FCC from issuing “any regulations regarding the Internet,” PCMag.com reports. The bill came eight days after the FCC issued its proposed net neutrality rulemaking, and a week after Sen. John McCain introduced a similar bill in the Senate. Blackburn framed the bill as an effort to preserve the Internet as “the last truly open public marketplace”; supporters of FCC regulation counter that the proposed nondiscrimination rule is necessary to preserve that openness.

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.

Gamer Appeals Ban from Sony’s Playstation 3 Network

On September 22, 2009, the United States District Court for the Northern District of California dismissed Erik Estavillo’s lawsuit against Sony. Fox40.com reports that Estavillo was banned from Sony’s Playstation 3 Network after allegedly uttering “racial and homophobic slurs to other online gamers.” Estavillo alleged that his freedom of expression was abridged, and likened Sony’s network to a company town. The district court dismissed Estavillo’s First Amendment claims, stating: “Sony’s Network is not similar to a company town. The Network does not serve a substantial portion of a municipality’s functions, but rather serves solely as a forum for people to interact subject to specific contractual terms.” Estavillo recently appealed the dismissal to the Ninth Circuit and has also filed a second lawsuit against Sony.

German Government Pledges to Protect Online Journalism in Germany with a “New Kind of Copyright”

On October 29, 2009, the New York Times reported that Germany’s governing coalition “has pledged to create a new kind of copyright to protect online journalism” with the goal of “level[ing] the playing field with Internet companies like Google.” German publishers fear that Google may be “exploiting their content to build lucrative businesses without sharing the rewards.” Google aggregates news from many news outlets on its Google News website; however, Google News operates in Europe without collecting any advertising revenue. Although “[d]etails of how the proposal would work have not been spelled out,” analysts believes that the new copyright scheme may allow online journalists to “claim royalties for the use of their content by Google or other online ‘aggregators’ of news.” In support of the new scheme, counsel for the German Newspaper Publishers Association argues that there is “no fundamental right to information for free on the Internet.”

United Kingdom to Crack Down on Online Piracy; Could Lead to Outright Disconnection of Pirates

On October 28, 2009, the BBC reported on new legislation that will come into force in the United Kingdom in April 2010. Although “the details of it would need to be hammered out at European level,” the legislation will impose bandwidth restriction on suspected pirates. If necessary, more restrictions will be introduced in the spring of 2011 that could completely disconnect the suspected pirates from the Internet. The legislation already faces challenge from ISP TalkTalk, which has created a “Don’t Disconnect Us” campaign and threatened litigation. Although the legislation is designed to protect the United Kingdom’s creative content industries, legislators emphasize that the long-term solution is for “the industry to educate users and to offer new and cheaper ways to download content.”

Nokia Sues Apple for Patent Infringement Related to iPhone

On October 22, Nokia filed a suit against Apple in Delaware federal court, alleging that the iPhone infringes patents held by Nokia. The New York Times reports that the specific patents deal with the GSM and UMTS wireless standards utilized by the iPhone for voice and data communication, both of which were developed in part by Nokia. The Wall Street Journal notes that the suit might be a strategic response to the iPhone’s increasing momentum in Europe and Asia. Nokia could gain a two-percent royalty on each iPhone sold if the suit succeeds.

Tennessee Couple Is Entitled to Unmask Anonymous Blogger

On October 8, a Tennessee state court held in Swartz v. Does that a couple is entitled to know the identity of the individual who posted critical statements about them in an online blog. Ars Technica notes that the blogger’s claim to protection under Section 230 of the Communications Decency Act likely failed because the blog induced readers to spy on the Swartzes and report back on the blog. The Citizen Media Law Project points out that the legal standard used by the judge in this case was “highly protective of anonymous online speech,” but that the Swartzes provided “sufficient evidence in support of their claims of wrongdoing to outweigh the anonymous blogger’s right to anonymity.”

Charges against Craigslist for their “Adult Services” section dismissed by Illinois District Court
By Ye (Helen) He – Edited by Eric Engle

Dart v. Craigslist, Inc., No. 09 C 1385 (N.D. Ill. Oct. 20, 2009)
Opinion

The United States District Court for the Northern District of Illinois held, on Craigslist’s motion for judgment on the pleadings, that Craigslist is not liable for the content posted by its viewers. The court cited Section 230(c) of the Communications Decency Act, concluding that Craigslist, as an Internet classified ads service provider, is immune to civil liability for third party content. The court found Craigslist analogous to an ISP or phone service provider and thus not liable for users’ content and conduct, as opposed to, as plaintiff contended, a newspaper or magazine which may be held liable for its ads.

Bloomberg.com and Eric Goldman’s Technology & Marketing Law Blog summarize the case.

Plaintiff Tomas Dart, the Sheriff of Cook County Illinois, alleges that Craigslist is facilitating prostitution through their erotic (now “adult”) services section, and thus constitutes a public nuisance. Plaintiff sought money damages and to enjoin Craigslist from hosting its adult services section (Compl. P 1; id. at P 27.) Dart claims that Craigslist violated Illinois statute by arranging “meetings of persons for purposes of prostitution and directs them to a place for the purpose of prostitution.” As evidence, Dart cites “The Polaris Project,” an advocacy group against human trafficking, stating that “Craigslist is the single largest source for prostitution, including child exploitation, in the country.”

Craigslist argued that U.S.C. Section 230(c) absolves them of any liability. According to Section 230(c), “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Section 230(e) of the further states that, “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.” Craigslist also points out that before posting ads on its website, users must first agree to its Terms of Use. Furthermore, prior to entering the adult services section, users must agree to flag any content that violates Craigslist’s Terms of Use.

In addressing Dart’s allegations, the court reasoned that even if Craigslist were found to violate the Illinois statute, Section 230(e) of the act would control. Furthermore, the court found Dart’s interpretation of “arrange” and “direct” to “strain the ordinary meaning of the terms.” The court reasoned that since it was the users who choose to post such content, even against Craigslist’s express Terms of Use, Craigslist in no way induced anyone to create, post or search for illegal content.

The court’s holding is wise and conservative; to rule otherwise would blatantly disregard the plain meaning of the Communications Decency Act, and invite a slew of litigation. The court does note, however, that the act does not protect online content hosts from all civil liability, warning that Craigslist could be held liable for its own content or if its system were truly designed to encourage or cause the unlawful behavior. Given Craigslist’s existing precautions, it seems this message is directed at the public rather that to Craigslist itself.

Facebook, Inc. v. Power Ventures, Inc.
By Gary Pong – Edited by Eric Engle

Facebook, Inc. v. Power Ventures, Inc., Case No. 08-cv-05780-JF (N.D. Cal. Oct. 22, 2009)
Order (Hosted by SPAM NOTES)

The United States District Court for the Northern District of California has granted a motion by Facebook to dismiss counter-claims and strike affirmative defenses in its ongoing case against Power Ventures (Power.com). In his order, United States District Judge Jeremy Fogel wrote that Power.com’s answer and counter-claim relied on legal conclusions which were not directly supported by factual allegations. Judge Fogel went on to note that antitrust claims, like those made by Power.com, “require a ‘higher degree of particularity in the pleadings.’” The order gives Power.com 30 days to amend its pleading.

TechCrunch provides an overview of the issues involved in this case. The Financial Times and Eric Goldman’s Technology & Marketing Law Blog comment on the decision.

Power.com is a service that aggregates various social networking sites so that users can access them all via Power.com. The service promotes to users that they can have “all [their] friends in just one place.” Power.com had allowed users to integrate their Facebook accounts into the service until Facebook filed suit on December 30, 2008. In its complaint (hosted and discussed by the New York Times), Facebook alleges, among other things, that Power.com had violated Facebook’s terms of use, infringed upon Facebook’s copyright and trademark, and violated the Digital Millennium Copyright Act (”DMCA”).

In response, Power.com filed a motion to dismiss (hosted by and discussed by SPAM NOTES) that was subsequently denied. It then filed an answer and counter-claim (hosted by Power.com and discussed by SPAM NOTES) against Facebook. In the counter-claim, Power.com alleges that Facebook engaged in monopolistic and anti-competitive behavior by placing restraints on Power.com’s ability to manipulate users’ Facebook data even when their consent was given. The present order by Judge Fogel gives Power.com 30 days to support its claims against Facebook with facts.

Whether or not Power.com ultimately prevails may have far-reaching effects on social networking sites and the personal data they amass, since one of Facebook’s greatest assets is the personal information it has collected on its over 300 million users. Facebook has an undeniable interest in keeping this information from potential competitors such as Power.com. In such an environment, it may be difficult for a new competitor to reach critical mass and to obtain enough users for the network effect to take hold. At the same time, users are very concerned about their privacy and Facebook has faced vocal criticism in the past whenever it instituted policies that users felt were threatening (e.g. Facebook Beacon). It would be even more difficult for Facebook to protect its users’ privacy if the data was shared with third-parties. With this in mind, it may not be hyperbole to say that the outcome of this case could affect a population the size of America.

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.

By Ian C. Wildgoose Brown – Edited by Stephanie Weiner

Moberg v. 33T LLC, Civil No. 08-625(NLH)(JS) (D. Del. Oct. 6, 2009).
Opinion

On October 6, the United States Court for the District of Delaware ruled in a case of first impression that a photograph posted to the Internet from a foreign server is not a “United States work” within the meaning of section 411 of the Copyright Act, and thus need not be registered in the U.S. in order to bring suit for infringement. 17 U.S.C § 411(a). Håkan Moberg, a Sweden-based photographer, brought a copyright infringement action against 33T, LLC, a Delaware corporation, and Cedric and Erwan Leygues, France-based website operators, for unauthorized use of photographs he had displayed on a German website in 2004.  The court denied the defendants’ motion to dismiss, allowing the photographer to go forward with his suit without having to first register his copyright in the United States.

Loeb & Loeb LLP provides an overview of the case. Ex©lusive Rights suggests that the outcome was largely inconsequential. But CyberLaw Currents sees the case as significant for international copyright law.

The defendants asserted that, by posting material to the Internet from a German server, the plaintiff effectively had published the material simultaneously in the U.S. and in Germany.  This would have rendered the work subject to the requirement of § 411(a) that any domestic copyright must be registered with the Copyright Office before any infringement action may be brought regarding that work.  Declining to decide generally whether online posting constitutes “publication,” the court instead held that posting material on a foreign-based Internet site does not make it a “United States work,” despite the fact that it is simultaneously viewable in the United States, and accordingly it is exempt from the Act’s requirements.  In other words, the plaintiff’s photographs were not published simultaneously in the U.S. regardless of whether the German website was considered to have published them or not.

The court reasoned that accepting the defendants’ argument would “overextend and pervert” U.S. copyright law and would be contrary to the goals of the Berne Convention for the Protection of Literary and Artistic Works of reducing barriers to enforcing copyright of foreign works under U.S. law and promoting uniformity in international copyright law. The court additionally found that the Copyright Act’s exclusion of non-U.S. works from the registration formalities signaled a legislative desire to facilitate protection of copyright holders’ copyrighted material in the U.S.  The result of requiring registration of non-U.S. works, the court worried, would be to allow unlimited infringement within the U.S., because “the majority of foreign works are never registered in America.”

The court also found that the plaintiffs had not properly served the defendants with process, but gave the parties 45 days to amend service. Furthermore, the court ordered a 45 day limited “jurisdictional discovery” period to determine whether the defendants’ websites specifically targeted Delaware citizens for purposes of establishing jurisdiction.