JOLT Digest

Court Rules That Software License Transfers Ownership
By Kate Wevers – Edited by Anthony Kammer

Vernor v. Autodesk, Inc., No. C07-1189RAJ (W.D. Wash., Sept. 30, 2009)
Opinion

On September 30, the United States District Court for the Western District of Washington granted, in part, Vernor’s motion for summary judgment against Autodesk.After Autodesk became aware of Vernor’s attempts to sell copies of its copyrighted software, AutoCAD, on eBay, it invoked the takedown provisions of the Digital Millennium Copyright Act, causing Vernor to be barred from selling anything on eBay for a month. Vernor sued, seeking, among other remedies, declaratory judgment that these sales were not in violation of copyright. In granting summary judgment for Vernor, the Court held that a customer who had acquired AutoCAD packages pursuant to Autodesk’s software license agreement (”License”) became an owner of the physical copies of the software with the right to resell the AutoCAD packages under the first sale doctrine (17 USC § 109(a)).

The Court also accepted that the owner was protected from claims of contributory copyright infringement by 17 USC § 117. The Court had previously considered very similar issues in the context of Autodesk’s earlier motion to dismiss. See Vernor v. Autodesk, Inc., 555 F. Supp. 2d 1164 (W.D. Wash. 2008)).

A selection of briefs and relevant court documents are available here. The Technology & Marketing Law Blog provides a useful overview and analysis of the case. The outcome was heralded as pro-consumer by the Electronic Frontier Foundation, but Blog Nauseum suggests that the decision is not much of a win for consumers. (more…)

By Evan Kubota

Microsoft, Yahoo, Amazon Join Opposition to Google Settlement

The New York Times reports that Microsoft, Yahoo, and Amazon have joined library associations, nonprofits, and individuals in opposing the Google Books settlement in The Authors Guild v. Google. The settlement, which would allow Google to provide digital versions of millions of books, still requires court approval and remains the subject of a Department of Justice antitrust investigation. The opposition group, tentatively called the Open Book Alliance, will argue to the Department of Justice that the settlement agreement is anticompetitive.

Internet Law Group Brings Suit Against Unidentified Hackers

“John Doe” suits brought against unidentified Eastern European hackers may offer a glimpse of the hackers’ targets and techniques through subpoenas against defrauded banks. However, the banks may challenge the subpoenas in order to protect customer privacy. Unspam Technologies, a group that recently filed suit against bank hackers in the Eastern District of Virginia, hopes to improve bank security and potentially identify the hackers. The New York Times outlines the stakes and key players in the case, Project Honey Pot v. Does.

Mozilla Versus Microsoft in EU Browser Investigation

Ryan Paul at Ars Technica criticizes Mozilla’s complaints regarding Microsoft’s Internet Explorer bundling and default-setting practices. Paul not only argues that many of Mozilla’s complaints “lack substance,” but also claims that the European Union has no business intervening to encourage competition because Mozilla’s Firefox browser has a 22 percent market share “amidst an increasingly competitive browser market.” In contrast, Mitchell Baker of Mozilla argues that the Firefox browser is at a disadvantage because Internet Explorer has a “uniquely privileged position on Windows installations.”

By Sharona Hakimi

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!

Ninth Circuit Holds Anti-Spyware Software Company is Protected by Communications Decency Act Sec. 230 Immunity

By Dmitriy Tishyevich-Edited by Anthony Kammer
Zango, Inc. v. Kaspersky Lab, Inc., June 25, 2009, No. 07-35800.
Slip Opinion

On June 25, the Court of Appeals for the Ninth Circuit affirmed the district court’s grant of summary judgment for Kaspersky Lab, which distributes software that filters and blocks malicious programs.  The Ninth Circuit held that Kaspersky qualified for civil liability immunity under the Communications Decency Act Sec. 230(c)(2)(B) and rejected Zango’s argument that Sec. 230 immunity was limited only to Internet content providers.

The E-Commerce and Tech Law Blog summarizes the opinion. Eric Goldman provides another summary, agreeing with the outcome, but pointing out some questions the decision left open.
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California District Court Strikes at “Patent Trolling”

By Tyler Lacey – Edited by Amanda Rice
Diagnostic Systems Corp. v. Symantec Corp., June 5, 2009, No. SACV 06-1211 DOC (ANx) consolidated with No. SACV 07-960 DOC (ANx). Opinion

The United States District Court for the Central District of California granted in part defendant MicroStrategy’s motion requesting a more detailed statement of how its software products infringe on plaintiff Diagnostic Systems Corporation’s (”DSC”) patents, denying only MicroStrategy’s request for monetary sanctions.

The United States District Court for the Central District of California held that DSC must serve a supplemental answer to one of MicroStrategy’s interrogatories that includes more detailed Preliminary Infringement Contentions (”PICs”) within fifteen days. In so holding, the district court called DSC’s current PICs “vague” and “unacceptable,” especially given DSC’s status “as a company whose sole business is to enforce its patents.” MicroStrategy had given DSC’s software consultants copies of the allegedly infringing programs’ source code almost a year prior to the motion, but DSC had still failed “to provide PICs that explain how MicroStrategy’s source code infringes on the claims of DSC.” According to the court, the “bottom line” is that “after a plaintiff-patentee has had a reasonable opportunity to review the source code for the defendant’s accused software product, the patentee’s time for trolling the proverbial waters for a theory of infringement comes to an end.”

Peter Zurba provides an overview of the decision. (more…)