President Bush Signs PRO-IP Act
S. 3325

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.

District Court Extends TRO Against RealDVD Until Nov. 17th
By Andrew Ungberg –- Edited by Jon Choate

RealNetworks, Inc. v. DVD Copy Control Ass’n
N.D. Cal., October 7, 2008, No. C 08 04548 HRL
Court Docket provided by Justia

On Tuesday, October 7th, Judge Marilyn Hall Patel announced she would not disturb a temporary restraining order in place against RealNetworks (“Real”), pending a preliminary injunction hearing in mid-November.  The order blocks Real from selling RealDVD, a software program that allows users to copy DVDs to a computer or portable hard drive and watch them later without the physical disk.

The DVD Copy Control Association (“CCA”), filed a motion ex parte for the order just hours after Real began selling the program.  The CCA claimed that RealDVD violates the Digital Copyright Millennium Act (“DMCA”) by circumventing DRM protections on DVDs, and that Real’s development of the program violates a licensing agreement the companies had signed.  With regards to the TRO, the CCA stated, “Real’s conduct is causing and unless restrained will continue to cause immediate and irreparable harm to [a number of Hollywood] Studios, including to their DVD rental and sale markets . . . .”

Real responded in opposition, claiming that any harm the Studios may suffer is “compensable or illusory.” Real argued that the widespread availability of illegal DVD pirating programs undercuts the CCA’s claims, and urged the court that a TRO would irreparably harm the company by depriving Real of positive publicity and other market advantages.  In the filing, Real maintained that its product conforms to the requirements of its license with CCA, and therefore does not violate the DMCA.

Tuesday’s hearing was the second regarding the restraining order.  According to Wired.com, Judge Patel originally put the order in place on Friday, October 3rd, warning both parties not to disclose details to the public.

CNET.com provides a summary of the hearing.  As result of Judge Patel’s concern that RealDVD may result in copyright violations, the software will remain unavailable pending further hearings in November.

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Palin E-mail Hacker Indicted on Federal Charges by Tennessee Grand Jury
By Andrew Ungberg –- Edited by Jon Choate

United States v. Kernell
E.D. Tenn., October 7, 2008, No. 3:08-CR-142
Indictment

On October 7, 2008 a Tennessee grand jury charged David C. Kernell with violating 18 U.S.C. § 2701 (part of the Stored Communications Act) and 18 U.S.C § 1030(a)(2) (a subsection of the Computer Fraud and Abuse Act) for allegedly accessing the Yahoo e-mail account of Alaska Governor Sarah Palin, the Republican vice-presidential nominee, without authorization. Images and information from Gov. Palin’s e-mail account first hit the Internet on September 17^th, and began making headlines shortly thereafter. Several websites, including Wikileaks.org and popular blog network Gawker.com, posted screen shots and content from the hacked e-mail account.

Professor Orin S. Kerr, of the George Washington University Law School and the Volokh Conspiracy blog, sees a potential problem with the indictment. He notes that in order to charge the case as a felony, the government must claim Kernell accessed the account “to further criminal or tortuous activity.” According to Kerr, however,

[T]he indictment doesn’t exactly state what the crime or tort is that the intrusion was designed to further. It just states that the intrusion was “in furtherance of the commission of a criminal act in violation of the laws of the United States, including 18 U.S.C. Section 2701 and 18 U.S.C. Section 1030(a)(2)” But Section 2701 and Section 1030 are the intrusion statutes themselves! It makes no sense to allow a felony enhancement for a crime committed in furtherance of the crime itself . . . .

Info/Law draws parallels between this case and the Lori Drew MySpace case.

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Supreme Court Denies Echostar’s Appeal; TiVO Awarded $104 million in Damages
Docket Page

On Monday, October 6, 2008, the Supreme Court denied Dish’s (formerly EchoStar) appeal of TiVO, Inc. v. EchoStar, 516 F.3d 1290 (Fed. Cir. 2008), bringing the long patent infringement suit to a close.  By refusing to hear argument, the Court upheld both the district and Federal Circuit decisions, which found Dish had infringed TiVO’s patented DVR software and awarded TiVO $74 million in damages. Dish will be forced to pay TiVO $104 million – the amount of the 2006 judgment plus interest.

Dish Network had successfully argued for a stay of the district court injunction pending appeal; the Court’s actions this week would restore the order against operating or selling the infringing DVRs. Earlier this year, Dish claimed to have developed a non-infringing workaround which would allow the company to continue providing DVR service to customers.

Jacqui Cheng of ars technica provides commentary, noting that litigation is likely to continue as TiVO has a pending motion for contempt which will effectively subject the workaround to a noninfringement test.

Previously: Federal Circuit Upholds Damages Award Against EchoStar

Expelled Lawsuit Dropped

Lennon v. Premise Media Corp. (S.D.N.Y.)

The suit filed by Yoko Ono and the children of John Lennon against the producers of Expelled, a motion picture that used a clip of the song “Imagine” without permission, was withdrawn and dismissed last month.  However, Anthony Falzone, Executive Director of Stanford’s Fair Use Project and counsel for defendants, notes:

[T]he right result came far too late. The mere pendency of these cases caused the film’s DVD distributor to shy away from releasing the full film — the version that includes the Imagine segment. So the film goes out on DVD on October 21 in censored form, illustrating the damage that even an unproved and unsupported infringement claim can do.

Previously: District Court Denies Yoko Ono Lennon’s Motion for Injunctive Relief