By Andrew Crocker

AT&T/T-Mobile Merger Blocked by Justice Department

The New York Times reports that the Justice Department is seeking to prevent the proposed merger between AT&T and T-Mobile, which are respectively the second and fourth largest mobile carriers in the United States.  In a suit filed in the U.S. District Court for the District of Columbia, the Justice Department stated that the merger would “substantially lessen competition” in the wireless marketplace and lead to price increases.  According to Bloomberg News, in the event the merger does not go through, Deutsche Telekom, which owns T-Mobile, is contractually entitled to $7 billion in “breakup fees” and other concessions, which would provide AT&T with a significant incentive to fight the government intervention in court.  The Washington Post points out that a court battle will also have high stakes for the Justice Department, which has been criticized for taking a weak approach to possible antitrust issues in recent high-profile mergers, including Comcast’s acquisition of NBC earlier this year.

EFF Challenges Dismissal of NSA Wiretapping Suits

Appearing before a panel of the Ninth Circuit, the Electronic Frontier Foundation (EFF) has challenged the dismissal of a number of lawsuits focusing on the National Security Agency’s alleged illegal mass wiretapping of Internet traffic through backdoor access to major telecommunications companies, Wired reports.  EFF brought suit against AT&T and other telecoms, but the suits were dismissed after the NSA invoked the state secrets doctrine and Congress passed a law that allowed the President to grant the companies retroactive immunity.  A parallel suit against the NSA itself was dismissed for lack of standing.  According to EFF, allowing the President to grant the telecoms immunity is a violation of the Constitution’s separation of powers, suggesting that the suits should be allowed to proceed on their merits.

Unredacted Wikileaks Files Available Online

A quarter-million U.S. State Department cables contained in an encrypted file belonging to the whistleblower organization Wikileaks are currently available on the web in unredacted form, according to Ars Technica.  The diplomatic cables contain the names of informants and confidential sources, whom the State Department argues may be put in danger by the publication.  Wired reports that Wikileaks, which has before removed potentially sensitive information from documents it leaks to the public, blames its contacts at the British newspaper the Guardian for publishing a book that contained the password to the unredacted file.  However, Der Spiegel reports that the Guardian responded by blaming Wikileaks founder Julian Assange for his own allegedly lax security procedures, a charge also made by Daniel Domscheit-Berg, an ex-spokesman for Wikileaks.

Federal Circuit Invalidates Software Patent As Mere Mental Process
By Albert Wang – Edited by Chinh Vo

CyberSource Corporation v. Retail Decisions, Inc., No. 2009-1358 (Fed. Cir. August 16, 2011)
Slip Opinion

The Federal Circuit affirmed the United States District Court for the Northern District of California’s grant of summary judgment, agreeing that plaintiff CyberSource’s patents were invalid for ineligible subject matter under 35 U.S.C. § 101.

Writing for a unanimous panel, Judge Dyk held that CyberSource’s method of verifying credit card transactions by matching up Internet addresses represented an abstract process, doable entirely within the human mind and thus not amenable to patent. The court also invalidated CyberSource’s patent for the actual program in its computer readable medium, characterizing the patent claim as a mere enshrining of an unpatentable method in object code.

Patently-O provides an overview of the case. TechDirt characterizes the decision as part of a broader trend, derived from Bilski, against “bogus” software patents. Ars Technica also takes a favorable view of the result, but characterizes the Federal Circuit’s human-capability test as an artificial distinction. (more…)

Despite First Amendment Challenge, Seventh Circuit Allows High School Sports Association to Exclusively License Broadcasting Right

By Abby Lauer – Edited by Andrew Segna

Wis. Interscholastic Athletic Ass’n v. Gannett Co., Inc., No. 10-2627 (7th Cir. Aug. 24, 2011)
Slip Opinion

The Seventh Circuit Court of Appeals affirmed the District Court for the Western District of Wisconsin, which had granted summary judgment to the Wisconsin Interscholastic Athletic Associate (WIAA) in a declaratory judgment action against local news media company Gannett Co., Inc.

The Seventh Circuit held that it is constitutional for the WIAA, a state actor, to exclusively license the right to broadcast tournament games played by member schools. In so holding, the court rejected Gannett’s argument that WIAA’s contract, which grants American Hi-Fi the exclusive right to stream tournament games and requires consent and payment for third-party broadcasts of entire games, violates the First Amendment.

The State Bar of Wisconsin provides an overview of the case. Techdirt criticizes the decision, expressing concern that the Seventh Circuit has created a new intellectual property right. (more…)

District Court Requires Warrant for Cell Phone Location Data

By Michael Hoven – Edited by Jonathan Allred

In the Matter of an Application of the United States of America for an Order Authorizing the Release of Historical Cell-Site Information, 10-MC-897 (E.D.N.Y. Aug. 22, 2011)

Slip opinion

The United States District Court of the Eastern District of New York denied the government’s request to order Verizon Wireless to turn over 113 days of customer location data which, according to the government, was relevant to a criminal investigation.

The court held that the Fourth Amendment covered cell phone location data and that law enforcement would need to show probable cause and receive a warrant to access such information. The court decided that cell phone users have a reasonable expectation of privacy that deserves protection from government intrusion. In so holding, the court applied an exception to the third-party-disclosure doctrine that would otherwise give law enforcement access to non-content information (such as location data) that users have already divulged to a third party (such as a service provider), concluding that disclosure of cumulative cell phone location data would be as intrusive as disclosure of the content of cell phone communications.

Ars Technica provides an overview of the case. Techdirt applauds the decision’s protection of cell phone users’ privacy. Wired notes that action by the Supreme Court or the Senate could favor government access over user privacy and limit the effect of the court’s ruling. (more…)

District Court Rules that DMCA Safe Harbors Apply to Cloud-Storage Music Locker Service Liable for Indirect Infringement

By Andrew Crocker – Edited by Jonathan Allred

Capitol Records, Inc. v. MP3tunes, LLC, 07 Civ. 9931 (S.D.N.Y. Aug. 22, 2011)

Slip opinion

The United States District Court for the Southern District of New York ruled on competing motions for summary judgment in a copyright infringement case brought by EMI, Inc. against cloud-storage locker service MP3tunes and its executive Michael Robertson. The court granted EMI’s motion for summary judgment of contributory infringement against MP3tunes for not removing specific infringing material from users’ accounts and direct infringement against Robertson for personally downloading infringing material, while granting in part MP3tunes’ motion for summary judgment on its entitlement to safe harbors under the Digital Millennium Copyright Act of 1998 (“DMCA”).

The court ruled that MP3tunes had satisfied the threshold requirement for safe harbors granted to service providers in the DMCA by establishing a policy for dealing with repeat infringers among other requirements, but it found that MP3tunes had not done enough to respond to takedown notices from EMI regarding MP3tunes users’ infringement. MP3tunes’ locker service allows users to upload music from their personal collections and play these songs back from any computer. MP3tunes also operates sideload.com, a website (and an accompanying web plugin) that allows users to search for new music and “sideload” it directly to their locker for storage and playback. Sideload.com also aggregates music sideloaded by users, serving as a resource for discovering new music. When MP3tunes received EMI’s takedown notice, it removed links to the infringing content from sideload.com, but it did not delete songs that had been sideloaded from these links to individual user accounts. Relying heavily on precedent from Viacom v. YouTube, 718 F. Supp. 2d. 514 (S.D.N.Y. 2010), which was previously covered by the Digest, the court held that although MP3tunes was obligated to remove only those copyrighted works that were described with sufficient precision in EMI’s takedown notice, it should have removed copies of these works from users’ accounts as well. As a result, the court ruled that EMI was entitled to summary judgment on the claim that MP3tunes was liable for contributory infringement for these specific works.

Eric Goldman’s Technology & Marketing Law Blog provides an overview of the case. The Washington Post and the New York Times both agree that the court’s application of DMCA safe harbors to MP3tunes’ service will be welcome news to Apple, Amazon, and Google, all of whom have recently introduced cloud music storage locker services.

(more…)