EU Court Advisor Supports Google Keyword Searches in Trademark Suit

On September 22, Reuters reported that an advocate general to the European Court of Justice, the EU’s highest court, stated that Google did not infringe trademark rights of luxury goods maker Louis Vuitton (LVMH). Google sells keywords that use the company’s trademarks, but Advocate General Poiares Maduro concluded that trademark protections do not extend to search advertising keywords because they are not considered a product sold to the public. ZDNet’s Richard Koman argues that this decision does not account for brand confusion arising from keyword searches, and demonstrates the court’s “misunderstanding of the Web as something tangential to ‘real’ commerce.” Although the Luxembourg-based court follows the opinions of its advocates general in most cases, the judges will give their final judgment at a later date.

Facebook Shuts Down Beacon Ad Software as Part of Lawsuit Settlement

Ars Technica reports that on September 18, Facebook announced it will shut down its controversial Beacon ad software as part of a settlement for a class-action privacy suit. The Beacon software, launched in November 2007, allowed off-Facebook activities to be published in users’ news feeds without their explicit consent. After over a year of legal disputes regarding the software, Facebook decided to settle with complaining users, agreeing to discontinue Beacon and offering $9.5 million to create a foundation that would “fund projects and initiatives that promote the cause of online privacy, safety, and security.” Facebook’s director of policy communications said that the company has “learned a great deal from the experience.” The settlement proposal still awaits a district court judge’s approval.

FCC Proposes Net Neutrality Rules for Internet Service Providers

The New York Times reports that on September 12, the chairman of the Federal Communications Commission proposed new regulations regarding net neutrality for Internet service providers. The proposal would bar providers from blocking or slowing Internet traffic on the basis of content. Consumer advocates of the policy say networks should not be able to deter users from accessing lawful Internet content or applications by restricting bandwidth. Wired’s Dylan Tweeny warns that the proposed rules may be difficult to enforce, stifle overall service due to capacity limitations, and decrease innovation in a market that has flourished without government intervention. The rules will formally be proposed in an open FCC meeting in October.

WTO Finds China’s Media Laws Violate International Trade Laws

On August 12, Ars Technica and the New York Times reported that the World Trade Organization ruled against China in a complaint by the United States regarding China’s limitation on imports of songs, movies, and books. The Chinese laws constituting trade violations require that many forms of imported media must be distributed by a single, state-owned company. The laws also limit foreign ownership of Chinese media companies and allow domestic companies to bypass trade censors. Ron Kirk, the US trade representative at the WTO conference in Geneva, said that the “decision promises to level the playing field for American companies working to distribute high-quality entertainment products in China so that legitimate American products can get to market and beat out the pirates.”

Hollywood Group Secures Preliminary Injunction against DVD Copying Software

On August 11, U.S. District Court Judge Marilyn Patel issued a preliminary injunction against RealNetworks, barring the company from selling its RealDVD copying software until a jury can decide the issue, CNET News reports. She stated that RealNetworks cannot use fair use as a defense under the Digital Millennium Copyright Act or the company’s license with the DVD Copy Control Association, but noted that “[i]t may well be fair use for an individual consumer to store a backup copy of a personally owned DVD on that individual’s computer.” While the decision is seen as a major victory for the Motion Picture Association of America, the Electronic Frontier Foundations views it as a setback for innovators and consumers.

David Kappos Sworn in as New Director of USPTO

Patently-O reports that on August 13, David Kappos was sworn as Director of the United States Patent and Trademark Office. Kappos addressed USPTO employees at the ceremony, pledging to work on “reducing the backlog of unexamined patent applications, cutting pendency dramatically, working off the mounting appeals backlog, [and] improving re-exam processing.” He also projected his goals to secure more stable financial backing or the USPTO, hoping there will be no need to utilize the Office’s new authority to use trademark funds to pay for patent operations. A video of Kappos’s swearing in ceremony is available on the blog Anticipate This!

By Sarah Sorscher

European Court of Justice Cracks Down on International News Search Engine

Slashdot reports that on July 16, Europe’s high court held in Infopaq International v. Danske Dagblades Forening that newspapers have a claim against a media monitoring service providing 11-word excerpts from newspaper articles. DDF, a group representing newspaper interests, has sued Infopaq, a service that searches newspaper articles for key words and then shares snippets with clients. The court ruled that the news articles were covered as copyrighted material by several directives of the European Parliament, and remanded the case to the national courts to determine whether the copyright laws in each state would be subject to the ruling.

Amazon Threatened with Class Action for Remotely Deleting Orwell E-books on Kindles

On July 20, MediaPost News reported that the law firm KamberEdelson is readying a class action lawsuit on behalf of consumers against Amazon for removing George Orwell books on owners’ Kindles. Amazon remotely deleted the e-books from users after discovering that the company that added them to the online catalog did not have rights to the books. Amazon did issue refunds to the owners, but representatives of KamberEdelson argue that the action infringes on consumer’s property rights and violates Amazon’s user agreement. On Boing Boing, Cory Doctorow discusses the problems that remote deletion poses to Digital Rights Media as a whole.

British Judge Rules that Google is Not Liable for Defamatory Search Results

On July 20, the New York Times reported that a High Court judge in Britain ruled that Google cannot be held liable for defamatory material appearing in its search results. The case arose when Metropolitan International Schools, which runs Internet-based training courses, sued Google over negative comments posted on a third party web site that appeared as text blurbs in Google search results. The judge held that Google “has merely, by the provision of its search service, played the role of a facilitator.” While this decision is consistent with America and other European countries’ libel laws, this case is seen as a significant win for search engines because of England’s reputation as being sympathetic to libel claimants.

USPTO Places Its “Peer-to-Patent” Pilot Program on Hold

In 2007, the United States Patent and Trade Office partnered with New York Law School’s Center for Patent Innovation to create an online collaborative patent review program. After two years, the program has been suspended in order to evaluate its effectiveness, InformationWeek reports. The Center for Patent Innovation also cited the poor economy as a reason for the suspension. Hoping to decrease the backlog in the USPTO, the pilot program encouraged patent applicants to volunteer their submissions to undergo peer review. Peer-to-Patent issued its second anniversary report this July and announced it will stop accepting new applicants. Despite the hiatus, there is hope that the program will be re-launched in the future as David Kappos, Obama’s nominee for director of USPTO, has indicated his support of the program, calling it “the Patent Office of the 21st century.”

FTC Ready to Regulate Blogs

On June 21, The Washington Post reported that revised FTC advertising guidelines, set to be approved late this summer, will explicitly include blogs within their scope. The guidelines make clear that bloggers must disclose any compensation they receive for product endorsements and that they may be held liable for false claims made in those endorsements. According to the Post, while some bloggers worry about potential chilling effects, others believe that the guidelines will lead to more trust within the blogosphere and increased advertiser comfort with blogs.

City Removes Requirement that Job Applicants Disclose Social Networking Passwords

On June 22, the City Commission of Bozeman, Montana, rescinded a requirement that city job applicants disclose their usernames and passwords for websites such as Facebook, YouTube, and MySpace, the Billings Gazette reports. The requirement was part of Bozeman’s background check consent and release form. The commission’s decision came less than a week after a Montana television station discovered and reported on the policy, which quickly provoked additional coverage and criticism from tech media and legal blogs.

Google’s Italian Court Date Set Back

The AP reports that on June 23, the Italian trial of four Google executives for defamation and privacy law violations was postponed until September due to the absence of an interpreter. Italian prosecutors brought the case seeking to hold Google liable for allowing a video of an autistic child being beaten by his classmates to be posted on YouTube. Though an E.U. law similar to the U.S.’s 47. U.S.C. §230 immunizes internet service providers from liability based on third-party content, the suit was brought under an Italian penal statute which holds content providers responsible for user-generated material, according to the Proskauer Privacy Law Blog. Alessandro del Ninno, an expert on Internet law, says the case is the first of its kind in Europe.

On May 22, the Federal Circuit affirmed in part, reversed in part, and remanded an ITC decision in Philips Lumileds Lighting Company (Lumileds)’s infringement action against Epistar and the United Epitaxy Company (UEC). The ITC had held that Epistar infringed Lumileds’s US Patent no. 5,008,718, concerning certain types of light-emitting diodes (LEDs), and issued a Limited Exclusion Order that broadly excluded the importation of the LEDs and LED arrays, regardless of manufacturer. The Federal Circuit reversed and refined the ITC’s summary determination that Epistar was estopped from challenging the validity of the patent, affirmed the patent construction, vacated the Limited Exclusion Order, and remanded the case.

Business Wire emphasized the Federal Circuit’s application of its recent holding in Kyocera Wireless Corp. v. International Trade Commission, 545 F.3d 1340 (Fed. Cir. 2008), while LEDinside and EETimes focused on the court’s analysis of two settlement agreements at issue. AGIPNEWS highlighted the fact that Lumileds has apparently expressed confidence in its ability to succeed in any future contests. PatentlyO indicated that the Court could have relied on the policy statement in Lear, Inc. v. Adkins, Inc., 395 U.S. 653 (1969) that there is a “strong federal policy favoring the full and free use of ideas in the public domain.”

The ‘718 patent concerns a particular type of light-emitting diode (LED) which attempts to solve an LED problem known as “current-crowding,” wherein the LED generates most of its light behind an opaque electrical conduct. According to the patent, transparent indium-tin oxide (ITO) contacts did not solve the current-crowding problem because current was not spread through the LED properly. The claimed invention solves the problem by using a “window layer” in the LED that has better conductivity and lower resistivity.

The Administrative Law Judge had ruled that Epistar was estopped from challenging the validity of the patent because during the course of the ITC proceeding, UEC had merged into Epistar, and was therefore bound by a previous patent dispute settlement UEC had made with Lumileds, wherein UEC agreed that neither it nor its successors would challenge the validity of the ‘718 patent.  However, before its merger with UEC, Epistar itself had also settled a previous dispute with Lumileds, in which Epistar explicitly retained the right to challenge the validity of the ‘718 patent in situations where Lumileds sued Epistar for infringement.

Writing for a unanimous panel, Judge Rader reversed the ITC’s summary determination, finding that Epistar indeed retained its contractual right to challenge the ‘718 patent’s validity with respect to products not inherited in its merger with UEC.  The court found that the Administrative Law Judge had not acknowledged the two separate licensing agreements before issuing its summary determination that the merged Epistar-UEC corporation was precluded from challenging the ‘718 patent’s validity.  Said the Court, “Lumileds cannot fortuitously gain rights against Epistar that it could not secure pre-merger.”

In making this determination, the court cited the contract reasoning of Medtronic AVE, Inc. v. Advanced Cardiovascular Systems, Inc., 247 F.3d 44, 60 (3d Cir. 2001), wherein an arbitration agreement between two corporations similarly survived when one of the parties merged with a third, though only with respect to particular products. The court also noted that such reasoning has previously applied not only to patent arbitration agreements but also to agreements not to sue patent licensees for infringement.

Reviewing the claim construction de novo, the court upheld the ITC’s constructions -including, notably, its construction of the term “transparent window layer” as not disclaiming the use of ITO. While Epistar argued that because the patent’s purpose was to address problems with the use of ITO, it “disclaimed” or “disavowed” ITO use, the court found that the patent merely “disparaged” the use of ITO. Moreover, even though the patent did not “disclose a means of using” ITO, this was acceptable because the use was “already known to those of skill in the art.”

The court vacated the ITC’s Limited Exclusion Order because under its decision in Kyocera Wireless, which came down after the ITC decision, the ITC “lacks statutory authority to issue a LEO that excludes imported products by entities not named as respondents before the ITC.” The case was remanded for further consideration.

By Sharona Hakimi – Edited by Chris Kulawik
Princo Corp. v. International Trade Commission, April 20, 2009, No. 07-1386
Slip Opinion

On April 20^th, the Federal Circuit affirmed in part and vacated in part a decision by the International Trade Commission in a suit regarding a patent pool for the “Orange Book” technology used to produce recordable and rewritable CDs. At the ITC, Princo conceded that it violated six patents owned by Philips Corp, but it claimed those patents were unenforceable due to patent misuse. Writing for the Federal Circuit, Judge Dyk affirmed the ITC’s findings that Princo failed to demonstrate that Philips committed patent misuse due to unlawful tying. However, the court remanded the case to determine whether Philips misused its patents by allegedly violating antitrust laws by agreeing not to compete with Sony.

The ITC originally ruled in Certain Recordable Compact Discs & Rewritable Compact Discs (Inv. No. 337-TA-474) that CD-R and CD-RWs imported by Princo infringed on six of Philips’ patents, all of which relate to industry standard “Orange Book” CD technology. The patents at issue were jointly developed by Philips and Sony in the 1980s and early 1990s.  When developing the technology and industry standards, Philips, Sony, and other companies pooled their patents and allowed Philips to grant package licenses to each company, with all of the patent owners sharing in the royalties.

Barry Herman and Alex Englehart of the ITC Law Blog summarize the decision.  Patently-O explains the relevant case law and antitrust theories. The Patent Prospector recaps the case’s background, providing excerpts from both the ITC and the Federal Circuit opinions.

On appeal at the ITC, Princo conceded infringement but made two distinct claims of patent misuse by Philips that would render the patents unenforceable. First, Princo argued that Philips misused its patents by tying a non-essential technology, the “Lagadec patent,” into a bundle within the patent pool. Princo asserted that Philips thereby “improperly used its market power” to force manufacturers interested in Orange Book technology to also acquire a license to the non-essential Lagadec patent. However, the Federal Circuit affirmed the ITC’s finding that this did not qualify as misuse since a reasonably broad claim construction of the Lagadec patent could make it essential to the technology. The Federal Circuit agreed that that this kind of tying is not misuse so long as “it would have been reasonable for a manufacturer to believe a license… was necessary.”

Princo put forth a second misuse claim alleging that Philips violated antitrust laws by improperly colluding with Sony. According to Princo, “Philips bribed Sony not to use . . . Lagadec to compete against the [Philips dominated standard].” Princo alleged that Phillips and Sony agreed never to license the Lagadec patent without also licensing the rest of the patent pool. The court agreed with this argument, but it remanded to determine “(1) whether Lagadec was a potentially workable alternative to the Orange Book technology and (2) whether Princo has established that Sony and Philips agreed that Lagadec would not be licensed in a manner allowing its development as competitive technology.”

Judge Bryson, who dissented in part, would have fully affirmed the ITC’s findings. Judge Bryson concluded that this is not the rare case of patent misuse; the safe harbor of 35 USC 271(d) did not apply because the ITC found that Philips did have market power in the relevant market.

A news release on the website of the international firm Troutman Sanders LLP cautions patent holders, licensees, and technology manufacturers of possible implications that may arise from the decision, advising them not to enter hastily into patent pools: “As Princo reflects, such a pool needs to be set up carefully because various aspects of the negotiation or terms of a patent pool can give rise to antitrust allegations, patent disputes, or both.” This case indicates the inherent tension between protecting patent holders’ exclusive rights to their technology and the larger public policy considerations encouraging the development of competing technologies.

]]> http://jolt.law.harvard.edu/digest/patent/princo-corp-v-international-trade-commission/feed 0 http://jolt.law.harvard.edu/digest/copyright/flash-digest-news-in-brief-5 http://jolt.law.harvard.edu/digest/copyright/flash-digest-news-in-brief-5#comments Thu, 23 Apr 2009 17:51:10 +0000 jmilkey http://jolt.law.harvard.edu/digest/?p=131 By Tyler Lacey

Founders of The Pirate Bay Internet Piracy Site Convicted, Sentenced to Prison

The New York Times reports that on April 17, a Swedish court convicted four men, including the three founders of The Pirate Bay website, on charges of promoting copyright infringement. The men were sentenced to one year in prison and ordered to pay the equivalent of $3.6 million in damages to the holders of the infringed copyrights. The Pirate Bay continues to provide links that allow users to download thousands of copyrighted songs, movies, and computer programs. John Kennedy, chief executive of the International Federation of the Phonographic Industry, said that the copyright holders will continue their efforts to shut down the website.

Electronic Frontier Foundation Supports Block on Gambling Domain-Name Seizure

The Electronic Frontier Foundation, in conjunction with the Center for Democracy and Technology and the American Civil Liberties Union of Kentucky, filed an amicus brief to the Kentucky Supreme Court on April 17. The brief supports the blocking of a Kentucky state court order, which requires domain name registrars outside of Kentucky to release control of over 100 domain names associated with gambling websites. A Kentucky court of appeals had previously blocked the trial court’s seizure order, ruling that Kentucky’s ban on “gambling devices” did not extend to internet domain names.

South Korean Blogger Acquitted on Charges of Spreading False Information

On April 20, a South Korean court acquitted Park Dae-sung on charges of purposely harming market sentiment. Reuters reports that Park had been accused of causing instability in the South Korean currency by spreading false information on his blog. Park had previously gained notoriety for posting accurate predictions of future economic troubles, including the collapse of Lehman Brothers. The court reasoned that even if Park did spread false information over the internet, he could not be convicted because he lacked the necessary intent to harm the public interest.

This Tuesday the Federal Circuit ruled against an International Trade Commission (“ITC”) ban on imports of cell phone chips that allegedly infringed on a rival’s patent. The chips, made by Qualcomm Inc., contained technology that the ITC had previously held infringed on a patent owned by Broadcom Corp. In its ruling the court stated that the ITC lacked authority to ban such imports.

Report by the Associated Press available here. Coverage by Reuters is available here.

From Across the Pond…

UK Considers Communications Data Bill
Speech

On Thursday, United Kingdom Home Secretary suggested legislation that would create a massive government database containing information on mobile phones and e-mail in order to combat terrorism.  Information collected would include the location and identity of the parties communicating, but not the content of the communications themselves.

BBC offers more coverage of the controversy surrounding the proposal, which critiques have called “Orwellian.”

UK Court Rejects Self-Incrimination Defense for Encryption Key
Slip Opinion

A UK court required defendants to offer the encryption key protecting a data disk that had been seized by police in a criminal investigation. Suspects were arrested for breaching an order under the Prevention of Terrorism Act of 2005. The court rejected their argument that disclosure would violate the privilege against self-incrimination, stating in its holding that an encryption key is no different than a physical key.

LinuxWorld offers more coverage here.

On Monday, October 14, President Bush signed into law the Prioritizing Resources and Organization for Intellectual Property Act, also known as the PRO-IP Act, S. 3325. The PRO-IP Act steepens penalties for IP infringement and increases resources to the DOJ to coordinate state and federal efforts against counterfeiting and piracy.

Although opposed by the DOJ, the Act also provides for a “U.S. Intellectual Property Enforcement Coordinator” position within the Executive Office of the President, which commentators are referring to as a “Copyright Czar.” However, another controversial provision, which would have authorized the Attorney General to seek civil copyright infringement remedies for private copyright owners, was removed from the final bill.

5th Circuit Ruling May Endanger Patent “Rocket Docket” in the Eastern District of Texas
In Re: Volkswagen of America Inc.
5th Circuit, October 10, 2008, No. 07-40058
Slip opinion

In a 10-7 en banc decision, the Fifth Circuit issued a writ of mandamus ordering the transfer of a product liability case from the U.S. District Court for the Eastern District of Texas to the U.S. District Court for the Northern District of Texas.  The court held that the district court judge John Ward had abused his discretion when he denied a motion to transfer from the Eastern District, which had no connection to the parties, witnesses, or facts of the case, to the Northern District, which had extensive connections to the parties, witnesses, and facts of the case.  The dissent argued that the majority was misusing mandamus in violation of Supreme Court precedent, characterizing the district court judge’s order as nonappealable.

Commentators note the ramification of the court’s order on the common practice of filing patent suits in the notoriously plaintiff-friendly “rocket docket” Eastern District.  Under the majority’s reasoning, it may become easier for defendants to seek changes of venue.

German Courts Rule That Google Image Thumbnails Infringe on Copyright

Google has recently lost two copyright suits in Germany, where the courts have ruled that Google’s use of thumbnails of copyrighted images in its image search engine constitutes infringement.  Google plans to appeal.

These rulings stand in contrast to U.S. precedent, such as the Ninth Circuit’s holding, in Perfect 10 v. Amazon, that Google’s use of image thumbnails was a fair use.  Similarly, eBay has seen divergent international outcomes with respect to trademark infringement claims. The S.D.N.Y. ruling in Tiffany v. eBay held that eBay did not have to increase its efforts to police trademark infringers, while courts in Germany and France instead ruled in favor of luxury brands Rolex and Louis Vuitton.