The Eastern District of Texas Puts End to Eolas’ Patent Trolling
By Dorothy Du – Edited by Jeffery Habenicht

Eolas Techs. Inc. v. Adobe Sys., Inc., No. 6:09-cv-446 (E.D. Tex. July 19, 2012)
Slip opinion (hosted by Justia.com)

The United States District Court for the Eastern District of Texas denied plaintiff Eolas’s motion for judgment as a matter of law that its patents are valid or, alternatively, a new trial. Eolas Techs. Inc. v. Adobe Sys., Inc., No. 6:09-cv-446, slip. op. at 1 (E.D.Tex.July 19, 2012).

Judge Davis of the district court held that Eolas, a non-practicing entity, failed to show either that the jury had insufficient evidence to find the patents invalid or that they were entitled to a new trial under the Federal Rules of Civil Procedure. First, the court found that, as required under Rule 50(b), the evidence at trial, primarily the defendant’s expert testimony, was sufficient for a reasonable jury to find that the patents were anticipated and obvious. Id. at 11, 12, 15. Second, the court determined that there was no evidence that the jury was influenced by passion or prejudice and, therefore, no new trial was required under Rule 59. Id. at 16.

Ars Technica provides an overview of case. ZDNet strongly approves the decision and predicts that the Federal Circuit would deny an appeal by Eolas.
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Canadian Supreme Court Ends Royalties for Online Music Downloads

By Andrew Crocker — Edited by Michael Hoven

Entertainment Software Association (ESA) v. Society of Composers, Authors and Music Publishers of Canada (SOCAN), 2012 SCC 34; Rogers Communications Inc. v. SOCAN, 2012 SCC 35, SOCAN v. Bell Canada, 2012 SCC 36.

Opinions available at the Supreme Court of Canada.

In three copyright decisions on July 12, the Canadian Supreme Court interpreted the scope of rights in musical works under Canada’s Copyright Act. In Entertainment Software Association (ESA), the court overturned a finding of the Canadian Copyright board that when a user downloads a song from an online music store, it is not a communication to the public. In Rogers, however, it found that streaming a song from an online music service was “a communication to the public” requiring a royalty payment to the artist for a performance of the song. Finally, in Bell, the court held that the 30–90 second streaming previews of songs available from stores like iTunes do not require payment of a royalty to the artist. Together, the rulings significantly change the status quo for royalties collected by SOCAN (Society of Composers, Authors and Music Publishers of Canada) on behalf of artists for digital performances of their works.

Reuters has an overview of the decisions. Techvibes discusses the impact of the Entertainment Software Association decision on the video game industry.
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By Dorothy Du

Federal Circuit Reconsiders Myriad’s Gene Patents on Remand

This past Friday, July 20, the Federal Circuit heard 45 minutes of oral arguments for Association for Molecular Pathology v. Myriad on remand on whether isolated breast cancer genes are unpatentable products of nature, reports Bloomberg Businessweek. A year ago, JOLT Digest reported on the Federal Circuit’s decision to uphold the patent eligibility of isolated DNA. However, following a Supreme Court decision to strike down a diagnostic patent as an unpatentable law of nature in Mayo Collaborative Services v. Prometheus Labs., a case JOLT Digest summarized, Myriad was remanded to the Federal Circuit. Reuters reports that at Friday’s oral arguments, Myriad attorney Greg Castanias compared isolating the patented genes to creating a baseball bat out of a tree, while opposing counsel for the USTPO compared the process to mining coal from the ground. According to Wall Street Journal Law Blog, the panel of judges hearing the arguments appeared to remain steadfast in their original positions on the patents. Judges Lourie and Moore made comments expressing their approval of Myriad’s patents, while Judge Bryson, who dissented in the original ruling, reiterated his belief that gene sequences are unpatentable products of nature. The oral arguments can be heard at the website of the Federal Circuit.

Europe to Approve Its First Gene Therapy

According to Wall Street Journal Health Blog, the European Union’s European Medicines Agency (“EMA”) has recommended the approval of a gene therapy to treat a rare genetic disorder. The European Commission ordinarily follows the EMA’s recommendations. An approval would be groundbreaking, according to the New York Times, because it would be the first approval of a gene therapy in the Western world; China approved a gene therapy for cancer back in 2003. Gene therapy theoretically works by supplying the body with normal copies of defective genes, thereby targeting diseases at their source. Followers of this exciting technology, however, have been disappointed by experimental results until now. Creating successful gene therapies has been a struggle because of challenges associated with inserting the genes safely and preventing immune reactions to the inserted genes, reports the AP. The New York Times explains that the gene therapy awaiting approval is called Glybera, is manufactured by uniQure, and treats lipoprotein lipase deficiency, a condition caused by a mutation that prevents patients from producing an enzyme that breaks down fat particles in the blood.

ITC Ban on Importing Motorola’s Android Products Takes Effect

An International Trade Commission (“ITC”) exclusion order banning the importation into the United States of Motorola Android devices took effect this past Wednesday, July 25, reports Ars Technica. The order issued two months ago, pursuant to the ITC’s ruling that 18 Motorola Mobility products infringed a Microsoft patent related to Microsoft’s Exchange Active Sync technology, which allows users to accept invitations and add events to their Google calendar. David Howard, Microsoft’s deputy general counsel, has stated that “Microsoft brought this case only after Motorola stopped licensing our intellectual property but continued to use our inventions in its products,” PC Magazine reports. CNET notes that Microsoft has been “proactive” in pursuing licensing deals, currently receiving royalties from 70 percent of Android vendors. Motorola has promised users that it will keep its Android products on the U.S. market without infringing Microsoft’s patent, but has not yet disclosed how. Ars Technica and CNET speculate that Motorola will either remove or tweak the infringing technology in order to render the Android products non-infringing. Motorola has also filed an appeal of the ITC ban, according to the Seattle Times.

Judge Allows Aereo to Continue Providing Broadcast Television over the Internet
By Brittany Horth – Edited by Charlie Stiernberg

American Broadcasting Companies, Inc. v. Aereo, Inc., 12 Civ. 1540 (AJN) (S.D.N.Y. July 11, 2012)
Slip opinion

Judge Alison J. Nathan of the United States District Court for the Southern District of New York denied a request for a preliminary injunction made by a group of broadcast television companies against Barry Diller’s Aereo, a system exclusively available in New York City that allows subscribers to watch and record live broadcast television over the Internet.

Judge Nathan held that the plaintiffs did not show a likelihood of success on the merits in their claim that Aereo is liable for copyright infringement for publicly performing the plaintiffs’ copyrighted works but did show that they would suffer irreparable harm. Am. Broad. Co., slip op. at 36, 44. She explained that the plaintiffs likely would have been granted a preliminary injunction “but for” the Second Circuit’s reading of “the transmit clause” in 17 U.S.C. § 101 in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision”). Id. at 1. (JOLT Digest has previously reported on Cablevision and its continuing significance.) Instead, she rejected all of the plaintiffs’ attempts to distinguish Aereo from the service at issue in Cablevision and concluded that the Second Circuit’s analysis in Cablevision was equally applicable to the present case. Id. at 21, 52.

A brief summary of the continuing situation is available at the New York Times. The Los Angeles Times features an analysis of the denial as well as the relevant precedent, including Cablevision and Sony Corp. of Am.  v. Universal City Studios, Inc., 464 U.S. 417 (1984) (“Sony Betamax”). CNNMoney provides a more detailed overview of Judge Nathan’s reasoning. CNBC offers Aereo CEO Chet Kanojia’s thoughts on the future of Aereo now that they have received this favorable ruling.

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Federal Circuit Revisits Patentable Subject Matter Following Prometheus
By Jeffery Habenicht – Edited by Dorothy Du

CLS Bank Int’l v. Alice Corp. Pty. Ltd, No. 2011-1301 (Fed. Cir. July 9, 2012)
Slip opinion

The Federal Circuit reversed the D.C. District Court’s decision to grant summary judgment against Alice Corporation (“Alice”). CLS Bank Int’l v. Alice Corp. Pty. Ltd, No. 2011-1301, slip op. at 2, 6–7 (Fed. Cir. July 9, 2012). The district court had held that Alice’s patents were invalid for failure to claim patentable subject matter. CLS Bank Int’l v. Alice Corp., 768 F. Supp. 2d 221 (D.D.C. 2011).

The Federal Circuit held that Alice’s patents were patentable under § 101 because they were directed to “practical applications of invention.” Slip op. at 2. The court found that the “abstractness of the ‘abstract ideas’ test” set forth in Bilski II rendered the test overly “elusive.” Id. at 13–15 (citing Bilski v. Kappos, 130 S. Ct. 3218 (2010)). The court grappled with the difficulty of ensuring that overly broad patents do not unduly foreclose subsequent innovation, while taking care not to improperly ignore “meaningful limit[s]” on patent scope. Id. at 18–20 (quoting SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010)). In order to address this difficulty, the Federal Circuit set forth a new test—perhaps better described as a presumption—for patentability: So long as “it is not manifestly evident that a claim is directed to a patent ineligible abstract idea,” that claim should survive a § 101 inquiry. Id. at 20.

In so holding, the Federal Circuit introduced another jigsaw-piece to the puzzle that is patentable subject matter. Given the Supreme Court’s recent interest in the topic, this opinion could serve as a vehicle for further clarification regarding the theoretical limits of § 101.

Thompson Reuters provides an overview and analysis of the case. Patently-O explores the differences between the majority opinion and the dissent, and suggests that the dissent may hew closer to Supreme Court precedent.
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