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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 Conor H. Kennedy
Editorial Policy

In Citizens United v. Federal Election Commission (“Citizens United”), the Supreme Court nullified a major provision of campaign finance legislation.  The Federal Election Commission (“FEC”) can no longer regulate the mandated disclosure, allowable sources, or contribution limits of corporations’ independent political advocacy.

Prominent legal scholar Lucian Bebchuk argues that the “insiders” who manage companies are now empowered to use direct expenditures to legally entrench themselves atop publicly traded companies, their shareholders’ objections notwithstanding.  From such a powerful vantage, these “insiders” have strong incentives to spend their general treasury funds on political advertising to help candidates who favor legislation benefiting them as a class.

Whether and how “insiders” respond to these incentives is currently up for debate.  Still, increasingly weak shareholder rights or abstract reputational costs are now the sole disciplining factors preventing corporations from deluging our political speech channels with direct expenditures.  It therefore seems more likely than not that business insiders will take full advantage of the emerging legal landscape by significantly increasing political expenditures through the general treasury funds they control.

Accordingly, reform advocacy groups have redoubled their calls to bolster the FEC’s approach to offline coordination standards.  The offline coordination standards govern the degree to which corporations can orchestrate their political spending on television and radio advertising with specific candidates or parties.  The courts have rejected the FEC’s prior offline coordination standards, but not because of empirical evidence that specific advertisements have been actually coordinated.  As noted in the latest court opinion overturning the FEC’s offline coordination regulations, “no such evidence has yet been identified[, but that] is far from a guarantee that no such evidence will develop in the future.”

Advocacy groups like the Campaign Legal Center are picking up where court oversight left off, both by testifying in front of the FEC to stave off the prospect of substantial coordination and by urging Congress to write its own, stronger coordination standards to compel the FEC to act. This Comment hopes to contribute to the advocacy effort by suggesting that Congress and the FEC should consider altering online coordination standards as well.

The FEC’s online coordination standards were not challenged or overturned in the latest round of court review, even though they exempted any expenditures on political messaging distributed through free online services like YouTube.[i] A 2009 Columbia Law Review student comment highlighted the potential for abuse of virtually unregulated online political expenditures.

In the next few election cycles, the loci of political news and commentary will continue to migrate online.  The groups influencing that process are likely to allocate their investments toward ventures which have worked in the past.  The “Yes We Can” web video, commonly known as one of the most successful and innovative online expenditures in the 2008 campaign, bares the trappings of the political advertising we can anticipate in the near future: an unregulated third party funded the production of a web video which a candidate then spread to millions of supporters.

There is no reason to believe that the “Yes We Can” video was coordinated with the Democratic Party or the Obama campaign. However, one might expect that a prolonged, systematic effort to emulate its production and distribution model would foreseeably lead corporate spenders to take advantage of the non-regulation of coordinated online expenditures.  After all, when a corporation can coordinate one type of expenditure (i.e., expenditures distributed on free internet services) guaranteed to mesh with its preferred candidate or party’s dynamic efforts to shape the 24-hour news cycle, but cannot coordinate other expenditures (i.e., offline expenditures), the corporation has an incentive to move its money toward the coordinated expenditure.  Now that Citizens United has provided additional incentives for professional managers to invest their general treasury money on campaign expenditures, they also have additional incentives to research the most effective legal ways in which to do so.  We are therefore likely to witness a growing effort to exploit the online coordination standard.

This week, the FEC is hearing testimony about proposed post-Citizens United coordination standards.  Once the FEC sets a baseline by promulgating new standards, Congress is prepared to readjust that baseline to its own liking.  I argue that both entities should make preemptive efforts to regulate now instead of sweeping up after an election cycle of substantial online coordination. (more…)

Posted On Mar - 3 - 2010 5 Comments READ FULL POST

Federal Circuit Rules for Crocs on Appeal in ITC Patent Dispute
By Sharona Hakimi – Edited by Steven Primeaux

Crocs, Inc. v. ITC, Appeal 2008-1596 (Fed. Cir. Feb. 24, 2010)
Slip Opinion

On February 24, 2010, the U.S. Court of Appeals for the Federal Circuit reversed and remanded a patent decision by the U.S. International Trade Commission concerning Crocs shoes. In what has become a trend in high-profile design patent cases, Judge Rader provided guidance on claim construction and the application of the ordinary observer test. Rader held that Crocs’ utility patent No. 6,993,858 (“the ’858 patent”) was not obvious and that the three other companies remaining in the litigation did in fact infringe Croc’s design patent No. D517,789 (“the ’789 patent”). The Federal Circuit remanded the case to the ITC to determine appropriate remedies.

The case arose in 2006 when Crocs, the maker of colorful plastic clog footwear, sued eleven companies for allegedly copying its shoe designs. Three companies remain in the litigation: Double Diamond Distribution, Ltd., the maker of Dawg shoes; Holey Soles Holdings, Inc.; and Effervescent, Inc., which makes Waldies Comfy Clogs. The ITC had held that Crocs’ ’858 patent for “breathable footwear pieces” was invalid for obviousness and that the companies did not infringe the ’789 patent because there were only “minor differences.” On appeal, the Federal Circuit reversed.

Inventive Step blog provides a legal analysis of the court’s decision, Law.com provides a summary of the case, and David Musker of Class99.com offers a brief overview of Judge Rader’s decision. (more…)

Posted On Mar - 1 - 2010 Comments Off READ FULL POST

By Davis Doherty

Google Executives Answer for the Sins of Their Users in Italy

PCWorld reports that on Feburary 24, an Italian court convicted three Google executives for violating privacy laws, handing down six-month suspended sentences to each. The ruling arose after a video depicting the bullying of a boy with Down Syndrome was posted to Google Video Italia; Google removed the clip within hours of receiving a complaint from the Italian police, two months after it was first uploaded. Under Italian law, Internet content providers, but not Internet service providers, may be held liable as publishers of user-generated content.

Ars Technica reports on criticism that the decision strikes a blow to Internet freedom. As the New York Times explains, some observers connect the conviction to Italian Prime Minister Silvio Berlusconi’s interest in seeing a potential competitor to his media monopoly hindered. The executives plan on appealing the decision.

Businesses Give Yelp a Negative Review, File Class Action

Two class action law firms filed a lawsuit against Yelp Inc. on February 23 on behalf of a nationwide class of small businesses. The plaintiffs allege that Yelp, whose website allows users to post reviews of local businesses, “runs an extortion scheme in which the company’s employees call businesses demanding monthly payments, in the guise of ’advertising contracts,’ in exchange for removing or modifying negative reviews appearing on the website.” The WSJ Law Blog discusses the complaint, and the Bits Blog at the New York Times provides a response from Yelp. The case, Cats and Dogs Animal Hospital Inc. v. Yelp Inc., is currently pending in the U.S. District Court for the Central District of California.

Strike One for ACTA?

On February 21, BoingBoing and Computerworld reported on the alleged leak of a draft chapter from the secretive negotiations surrounding the Anti-Counterfeiting Trade Agreement (“ACTA”). Included in the alleged draft is a call for ACTA signatories to establish third party liability for infringement of intellectual property rights, which would allow rights-holders to bring suit against an Internet service provider who “knowingly and materially” aids infringement. The document calls for a requirement that ISPs implement user policies along the lines of a “three strikes rule,” which allows a provider to terminate a user’s Internet access after sending two warning letters. The European Commission expressed opposition to any agreement that would create an obligation to disconnect users.

Posted On Feb - 28 - 2010 Comments Off READ FULL POST

California Superior Court Enters Judgement in Anti-SLAPP Suit
By Debbie Rosenbaum – Edited by Steven Primeaux

MagicJack, LP v. Happy Mutants LLC, Case No. CIV 091108 (Sup. Ct. Cal. Marin County, Jan. 5, 2010)
Opinion (hosted by Boing Boing)

On January 5, 2010, the Superior Court of California for the County of Marin entered judgment against plaintiff MagicJack, reiterating its May 2009 holding that MagicJack had not established a probability of prevailing on its claims against Boing Boing and ruling that Boing Boing was entitled to legal fees and costs resulting from MagicJack’s lawsuit. In May, Boing Boing had moved to strike MagicJack’s claims under California’s anti-SLAPP (“strategic lawsuit against public participation”) rule. In its May 2009 holding against MagicJack, the court first noted that MagicJack’s claims targeted protected speech activity because Boing Boing’s statements “involve consumer information affecting a large number of persons.” The court then observed that posting on the Boing Boing site “provides information about [MagicJack's] product not only to the ‘substantial’ number of people who have already purchased the device, but also to other consumers who might be considering purchasing such a device.”

The court’s judgment is available here. The May 2009 ruling is available here. Gizmodo provides an overview of the case. Boing Boing also provides a full account of the events along with hosting all legal documents. (more…)

Posted On Feb - 27 - 2010 Comments Off READ FULL POST

Board of Patent Appeals affirms rejection of Pfizer’s broadest patent claim to Viagra
By Abby Lauer – Edited by Frank Sabatini

Ex parte Pfizer, Inc., Appeal 2009-004106 (B.P.A.I. Feb. 12, 2010).
Slip Opinion

On February 12, the Board of Patent Appeals and Interferences affirmed a Patent Examiner’s rejection of claim 24 of Pfizer’s patent on the erectile dysfunction (ED) drug Viagra.

The Board held that claim 24 of the patent was anticipated in the prior art by descriptions of the herb Yin Yang Huo (Horny Goat Weed). In addition, the Board invalidated the claim based on the judicially created doctrine of obviousness-type double patenting, a doctrine that seeks to prevent unjustified extension of the right to exclude that is limited by the twenty-year patent term. In holding as it did, the Board rejected some of the Examiner’s reasoning but agreed with his ultimate decision to invalidate the claim.

PatentlyO provides an overview of the case. BusinessWeek discusses the impact of the decision on Pfizer and its competitors Eli Lilly & Co. and Bayer AG, the makers of ED drugs Cialis and Levitra respectively. (more…)

Posted On Feb - 24 - 2010 Comments Off READ FULL POST
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