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Newegg Wins Patent Troll Case After Court Delays

By Kasey Wang – Edited by Yunnan Jiang and Travis West

The District Court for the Eastern District of Texas recently issued a final judgement for online retailer Newegg, twenty months after trial, vacating a $2.3 million jury award for TQP. TQP, a patent assertion entity commonly known as a “patent troll,” collected $45 million in settlements for the patent in question before Newegg’s trial.

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The Evolution of Internet Service Providers from Partners to Adversaries: Tracking Shifts in Interconnection Goals and Strategies in the Internet’s Fifth Generation

By Robert Frieden – Edited by Marcela Viviana Ruiz Martinez, Olga Slobodyanyuk and Yaping Zhang

In respone to increasing attempts by Internet Service Providers to target customers who trigger higher costs for rate increases, the FCC and other regulatory agencies worldwide have stepped in to prevent market failure and anticompetitive practices. This paper will examine new models for the carriage of Internet traffic that have arisen in the wake of these changes.

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The Global Corporate Citizen:  Responding to International Law Enforcement Requests for Online User Data 

By Kate Westmoreland – Edited by Yunnan Jiang

This paper analyses the law controlling when U.S.-based providers can provide online user data to foreign governments. The focus is on U.S. law because U.S. dominance of internet providers means that U.S. laws affect a large number of global users. The first half of this paper outlines the legal framework governing these requests. The second half highlights the gaps in the law and how individual companies’ policies fill these gaps.

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Symposium Introduction: Legal Issues in Computer and Internet Law and the Quagmire of Appropriate Legal Frameworks in the Modern Era

By Deborah Beth Medows – Edited by Yaping Zhang

Jurists must widely examine the pervasive challenges among the advents in Internet and computer technology in order to ensure that legal systems protect individuals while  encouraging innovation.  It is precisely due to the legal and societal quagmires that 3D printing and net neutrality pose that ideally position them as springboards from which to delve into broader discussions on technology law.

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A Victory for Compatibility: the Ninth Circuit Gives Teeth to RAND Terms

By Stacy Ruegilin – Edited by Ken Winterbottom

Microsoft won a victory in the Ninth Circuit last Thursday after the court found that Motorola, a former Google subsidiary, had breached its obligation to offer licenses for standards-essential technologies at reasonable and non-discriminatory rates. The court affirmed a $14.52 million jury verdict against Motorola for the breach.

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By Katherine Kwong – Edited by Mengyi Wang

Plane_DirtboxAccording to a report in the Wall Street Journal, the U.S. Marshals Service has been using airborne “dirtboxes” to collect data on mobile phones. The program, designed for criminal suspect surveillance, is accused of also collecting cell phone data on many Americans who are not suspected of any crime.

“Dirtboxes” – named after the acronym for their manufacturer, Digital Recovery Technology Inc.  (now owned by Boeing Co.) – induce cell phones to connect to them by imitating cell phone towers. A dirtbox sends cell phones signals that indicate that it is the strongest cell tower available, causing cell phones to connect automatically to it. Doing so allows the dirtbox to collect the International Mobile Subscriber Numbers (IMSI) of all devices in range. The data collected from the cell phones can be used to identify and locate individuals to a relatively small area. The U.S. Marshals Service has placed the devices on Cessna airplanes leaving from five different airports, allowing the program to cover a large proportion of the U.S. population. Each flight has the potential to collect data from “tens of thousands” of Americans, according to the Wall Street Journal article.

It is unclear how much the devices might disrupt the normal operations of cell phone networks. Dirtboxes can briefly interrupt phone calls, but authorities say they have sought to minimize harmful impacts by taking steps to ensure 911 calls are not interrupted. Verizon told the Wall Street Journal they were unaware of the program, while other major carriers declined to comment. In a follow-up article in the Wall Street Journal, the Federal Communications Commission (“FCC”), which is responsible for licensing and regulating cell phone services, said, “We were not aware of this activity.” Frederick Joyce, a communications law attorney, questioned whether the program constituted “harmful interference” with licensed cell phone transmissions.

(more…)

Posted On Nov - 25 - 2014 Comments Off READ FULL POST

By Henry Thomas

Ads For Content Scheme Held To Be Abstract Idea, Not Patentable Process

In 2001, Ultramercial filed a patent for a method whereby consumers could receive copyrighted products for free after viewing an advertisement and later targeted several technology companies – including Hulu, YouTube, and WildTangent – with infringement claims. Ultramercial v. Hulu has taken a looping route through the justice system, with the infringement claim being dismissed by the district court, reversed by the circuit court, and vacated and remanded by the Supreme Court twice. The third time around, the district court again found the patent to be invalid, and this time the circuit court agreed, citing the Supreme Court decision in Alice v. CLS Bank and using the two-step test outlined in it. Following the first step in Alice, the court held that the patent covered a patent-ineligible concept; even though Ultramercial described an “ordered combination of steps,” they amounted to nothing more than an abstract idea. In addressing the second Alice prong, the court held that the claims do not “do significantly more than simply describe an abstract method” and that, while no longer dispositive, the machine-or-transformation test could still give guidance to the second Alice prong. Applying that test, the court claimed that the Internet and a general-purpose computer were not novel machines, and transferring money, content, or other intangibles was not a transformation.

Opinion: http://www.cafc.uscourts.gov/images/stories/opinions-orders/10-1544.Opinion.11-12-2014.1.PDF

Federal Circuit Limits Application of Collateral Estoppel in Patent Litigation

E.Digital held patents (‘774 and ‘108) for an audio recording device that used flash memory to store the recording, and sued Futurwei over alleged infringement. In a different case, decided by the District of Colorado, the ‘774 patent was constructed narrowly to include only devices that exclusively used flash memory and not RAM. In e.Digital v. Futurwei (Huawei), the district court held that e.Digital could not re-litigate the construction of either patent, because the doctrine of collateral estoppel forced the court to rely on the earlier construction. While the Fed. Cir. Agreed that e.Digital was estopped from arguing the construction of the ‘774 patent (and glossed over an argument that the inclusion of a RAM-based microprocessor fundamentally altered the construction) the court held that the ‘108 patent could be argued because, though it incorporated the ‘774 patent, it was fundamentally unrelated. Further limiting the doctrine of collateral estoppel, dicta from the decision indicated that the relatedness (or not) of the two patents was not dispositive, and “[e]ach case requires a determination that . . . the issue previously decided is identical.”

Opinion: http://www.cafc.uscourts.gov/images/stories/opinions-orders/14-1019.Opinion.11-17-2014.1.PDF

Electronics Company Avoids Patent Enforcement By Directing Sales Outside U.S.

Halo Electronics, a maker of electronic components, sued Pulse Electronics over alleged infringement. Though it was found that Halo’s patent was non-obvious and valid, the Federal Circuit affirmed in Halo Electronics, Inc. v. Pulse Electronics, Inc. that no direct infringement had occurred. Although Pulse made business negotiations in America, contracted with American companies like Cisco, and incorporated their circuit components into products destined for sale in the states, all sales took place in foreign countries, outside the reach of U.S. patent law. The court held that under 35 U.S.C. § 271(a), “offers to sell . . . within the United States” were limited to offers made anywhere in the world for a sale in the U.S., and not for offers made in the U.S. for sale elsewhere.

Opinion: http://www.cafc.uscourts.gov/images/stories/opinions-orders/13-1472.Opinion.10-20-2014.1.PDF

Posted On Nov - 25 - 2014 Comments Off READ FULL POST

 

Photo By: archie4ozCC BY 2.0

By Steven Wilfong — Edited by Travis West

Benthall Complaint, U.S. v. Benthal (S.D.N.Y. October 29, 2014).  Complaint hosted by the Department of Justice.

Blake Benthall, the alleged operator of the popular drug market website Silk Road 2.0, was arrested last week as part of a law enforcement operation that successfully shut down Silk Road 2.0, as well as several other online dark markets. The complaint filed in the case alleged that Benthall ran the site under the alias “Defcon,” and charges him with narcotics trafficking, conspiracy to aid and abet computer hacking, conspiracy to transfer fraudulent identification documents, and money laundering. Benthall Compl. 1–4.

Benthall’s arrest and the seizure of Silk Road 2.0 were part of “Operation Onymous,” a coordinated action involving multiple agencies, including Europol, the FBI, and US Immigration and Customs Enforcement.  Over 27 websites were shut down as part of the operation.

The complaint describes several methods used to gain information about Silk Road 2.0 and ascertain the identity of “Defcon.” Law enforcement officials used the site to buy illegal drugs anonymously, Benthall Compl. at 12, and an undercover Homeland Security Investigations agent successfully infiltrated the website’s support staff, id. at 6. However, the most surprising aspect of the investigation is that the FBI was able to identify a foreign server hosting the Silk Road 2.0 website. Id. at 21. Because the site was hidden with Tor anonymity software, identifying the website’s location should have been very difficult. Officials involved in the investigation have been reluctant to reveal how the server was located, leading to speculation about how Tor was compromised.

Although law enforcement agencies are optimistic about the ability to shut down other black market websites in the future, the possibility that Tor users’ anonymity may be compromised has also led to concerns about the potential impact on legitimate users. Wired and Ars Technica provide further discussion of the issue.

While law enforcement agencies are reluctant to divulge the method that was used to locate Silk Road 2.0, the Tor blog advances several possible explanations, including the use of SQL injections (a common web bug), Bitcoin deanonymization, or Denial of Service attacks against the Tor network itself. Regardless of how law enforcement agencies identified the server hosting Silk Road 2.0, the Benthall Complaint indicates that identification was a critical step in the investigation, as it allowed officials to access the server, at which point it was determined to be controlled and maintained by a person using the email address “blake@benthall.net.” Benthall Compl. at 23. Subsequent surveillance activities confirmed that Benthall used this address. Id. at 28.

The possibility that government agencies may be able to identify Tor users has significant implications for online privacy and anonymity. The Tor software is widely used as a method of protecting anonymity, and prior to Operation Onymous, was considered to be very secure. While Tor software is used to conduct illegal activities, it also has a number of legitimate uses. “[W]histle-blowers, political activists and dissidents, [and] journalists” use anonymized sites to communicate securely and in private. The Tor Blog raises concerns that governments could use weaknesses in the Tor software to identify and silence political dissidents.

Posted On Nov - 19 - 2014 Comments Off READ FULL POST

By Ken Winterbottom

Motion to Dismiss in Hulu Patent Infringement Suit Affirmed

The United States Court of Appeals for the Federal Circuit affirmed a grant of a motion to dismiss in Ultramercial, Inc. and Ultramercial, LLC v. Hulu, LLC and Wildtangent, Inc., 2010-1544 (Fed. Cir. Nov. 14, 2014), on the grounds that the patent at issue did not claim patent-eligible subject matter. In 2010, Ultramercial sued YouTube, Hulu, and Wildtangent for infringement of its patent on a method of distributing products over the internet whereby an advertiser pays for a consumer’s right to view copyrighted material on the condition that the consumer watch a paid advertisement. Wildtangent responded with a motion to dismiss, arguing that the subject of the patent was too abstract a concept and therefore not eligible for protection.

On two prior occasions, the Federal Circuit reversed the district court’s grant of the motion to dismiss, and in both cases the U.S. Supreme Court granted certiorari and remanded. The most recent remand was ordered in light of the 2014 decision in Alice Corp. v.CLS Bank International, in which the Supreme Court stressed that merely requiring computer implementation does not make an abstract idea patentable. Now, after examining the case for the third time, the Federal Circuit at last affirmed the district court’s decision. Patently-O provides analysis and suggests that the decision represents “a strong signal from the Federal Circuit that the court is now understanding what the Supreme Court meant in [Alice Corp. and its predecessors].”

“Virtual Classroom” Patent Infringement Case Remanded for Further Determination

The United States Court of Appeals for the Federal Circuit vacated and remanded the district court’s judgment of noninfringement in Williamson v. Citric Online, LLC et al., 2013-1130 (Fed. Cir. Nov. 5, 2014). The plaintiff, Richard Williamson, sued Citrix Online, LLC and seven other corporate defendants — including Microsoft and Adobe — for infringement of his patent for a method of virtually connecting a presenter to a geographically remote audience. (The court described it as a “‘virtual classroom’ environment.”) The district court interpreted the terms of Williamson’s patent such that its constituent claims were unenforcably indefinite, or in any event, had not been infringed in this case.

In a 2-1 decision, the Federal Circuit remanded the case for a further determination of whether Williamson’s patent had been infringed. The majority determined that “the [defendants] have failed to overcome the strong presumption” that 35 U.S.C. § 112 does not apply absent language expressly referencing “means . . . for performing a specified function.”  The dissenting judge, however, took the position that § 112 could be triggered by other generic language, and that the word “module” in Williamson’s patent was sufficient to trigger it. The Los Angeles Intellectual Property Law Association provides commentary on this disagreement.

Attorney Publicly Reprimanded for Circulating Email from Judge

The United States Court of Appeals for the Federal Circuit formally reprimanded Weil Gotshal partner Edward Reines in In Re Reines, 14-MA004 (Fed. Cir. Nov. 5, 2014). The case arose from a scandal which prompted Randall Rader, the former Chief Judge of the Federal Circuit, to resign in May. Judge Rader wrote a letter to Reines praising his performance in an oral argument and expressing that he was “really proud to be [Reines’] friend.” Reines evidently circulated the letter to prospective clients, which the Federal Circuit found to be in violation of the American Bar Association’s rules of professional conduct.

In a per curiam opinion, eleven Federal Circuit Court of Appeals judges chastised Reines, rejecting his First Amendment challenge and “conclud[ing] that a public reprimand is the appropriate discipline.” The Recorder, Technethics, and Above the Law provide further commentary on the case and its aftermath.

Posted On Nov - 19 - 2014 Comments Off READ FULL POST

By Michael Shammas — Edited by Yixuan Long

Amendments to the Intellectual Property Law (B.O.E. 1996) and the Code of Civil Procedure (L.E. Civ. 2000) (Spain).

GOOGLE_APTHDVR_1268416fOn November 4, 2014, Spain amended its Intellectual Property Law and Code of Civil Procedure. The new text includes a provision levying fees on aggregators, like Google News, that collect snippets of other webpages. This practice is often labeled a “Google tax” because of the disproportionate impact such laws have on the search giant. In addition, the Spanish law allows sanctions of up to $758,000 for websites that link to copyright infringing content. Spain is at least the third European government fining search aggregators to support their traditional print publishing industries, following Germany and Belgium. Germany stopped its “Google tax” earlier this year. Belgium gave up in 2011(more…)

Posted On Nov - 18 - 2014 Comments Off READ FULL POST
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