Federal Circuit Rules Federal Law Trumps State Law in Interpretation of Patent Ownership Rights
By Flora Amwayi – Edited by Jonathan Allred

Abraxis Bioscience, Inc. v. Navinta LLC, 2009-1539, 2011 WL 873298 (Fed. Cir. Mar. 14, 2011)
Slip Opinion

The Federal Circuit denied a petition for an en banc rehearing of a Federal Circuit panel order dismissing Abraxis’ patent infringement case against Navinta. The court dismissed the case on the grounds that Abraxis did not have standing to sue for infringement since it did not own the patents at the time the original complaint against Navinta was filed. The original panel order hinged on whether interpretation of patent ownership should be governed by New York state law (as outlined in choice of law provisions) or by federal rules of patent ownership and assignment (Federal Circuit law). See 35 U.S.C. § 261.

By denying the en banc rehearing, the court affirmed the panel’s holding that the resolution of ownership and assignment question is an issue of Federal Circuit law since it determines a plaintiff’s standing to sue for patent infringement. In so holding, the court stated that “state law cannot retroactively override federal law to revive failed agreements.”

The Patent Law Blog provides an overview of the case. The Patent Prosecutor criticizes the decision as a refusal to correct the Federal Circuit’s intrusion into state contract law. (more…)

By Nathan Lovejoy

Lime Wire Damages Limited To One Statutory Damage Award Per Work

Judge Kimba Wood ruled on March 10th that the statutory damages provision of the Copyright Act authorizes only one damage award per work infringed rather than one award for every infringement. Wood noted that had she adopted the record industry plaintiff’s interpretation the potential damages against the file-sharing software company would be “more money than the entire recording industry has made since Edison’s invention of the phonograph in 1877.” Wood granted summary judgment against Lime Wire in May, and issued an injunction in October which required Lime Wire to cease distribution of its popular program. The trial for damages is set for May 2nd.

AT&T’s Acquisition of T-Mobile May Face Serious Scrutiny

An FCC official indicated to the Wall Street Journal that AT&T’s planned acquisition of T-Moble — which would make the company the largest mobile phone service, surpassing Verizon — would undergo serious scrutiny, saying “[i]t will be a steep climb.” This likely comes as no surprise to AT&T, as the WSJ notes elsewhere that “AT&T seems to understand what it’s up against.” The acquisition deal was announced last week.

Netflix’s Customer Data Practices Challenged

Five plaintiffs have alleged that Netflix has violated the Video Privacy Protection Act (“VPPA”) through its practice of collecting and retaining records of streaming and rental activity of its customers. The VPPA mandates that video rental companies destroy old records that contain personally identifiable information. This law was passed in the wake of Judge Robert Bork’s Supreme Court nomination hearings, during which his video rental history was published.

Righthaven Lawsuit Dismissed On Fair Use Grounds

At a hearing last week, U.S. District Judge James Mahan said that he would dismiss a copyright infringement claim brought by the private enforcement outfit Righthaven on behalf of the Las Vegas Review Journal (“LVRJ”). After the Oregon-based non-profit Center for Intercultural Organizing posted a full-text copy of a LVRJ article on their website, Righthaven filed suit last August without any prior contact or take-down requests. In November, Judge Mahan requested that the parties brief the fair use issue. Righthaven’s for-profit approach to copyright enforcement has been heavily criticized; Mahan’s ruling was welcomed by critic EFF, who represent defendants in other Righthaven cases. Righthaven has filed 250 lawsuits since March 2010, and has suffered one other loss on a fair use claim.

Federal Circuit Requires Pleading with Particularity in False Marking Lawsuit
By Raquel Acosta – Edited by Jonathan Allred

In re BP Lubricants USA Inc., No. 960 (Fed. Cir. March 15, 2011)
Slip Opinion

The U.S. Court of Appeals for the Federal Circuit granted in part the petition for a writ of mandamus filed by BP Lubricants USA Inc. (“BP”), reversing in part the District Court for the Northern District of Illinois, which had denied BP’s motion to dismiss on the grounds that the particularity requirement of Fed. R. Civ. P 9(b) was not met.

The Federal Circuit held that in qui tam false marking suits, cases must be plead with particularity in accordance with Rule 9(b) requirements regarding the circumstances constituting fraud or mistake. The court goes on to state that conclusory allegations are not entitled to an assumption of truth, citing Exergen in support of their holding that a proper pleading cannot merely aver substantive elements of a fraud complaint. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 (Fed. Cir. 2009) (holding in cases involving fraud, plaintiff must plead in specific detail the “who, what, when, where, and how” of the circumstances surrounding the intent to deceive). The court reasoned that there must be facts in support of the allegation that BP acted with knowledge or intent to defraud the public. Merely alleging that BP dealt with patents often enough that they knew or should have known the patents had expired was insufficient.

The Inventive Step Blog provides an overview of the case. PatentlyO presents a brief legal analysis on why this decision establishes that the recent influx of false marking lawsuits will not be a lasting trend. (more…)

By Tim Grayson

White House Presses for Copyright Reform, Privacy “Bill of Rights”

On Wednesday, the White House released a 20-page white paper (PDF), aimed at helping Congress tackle the increasingly complex issues surrounding copyright and intellectual property laws. As CNET reports, one of the paper’s main purposes was to urge Congress to definitively establish streaming unauthorized media as a felony. Making such “illegal streaming” a felony would empower the FBI to tap the phones, Internet connections, and other communication methods employed by those suspected of such activity. The administration also expressed its support for a new privacy “bill of rights.” The suggested legislation would be aimed at protecting consumers from increasingly invasive data collecting practices that are not expressly illegal under current law.

Former FCC Boss to Become Chief Cable Lobbyist

Ars Technica reports that Michael Powell — who ran the FCC under George W. Bush from 2001 until 2005 — will be the new head of the National Cable and Telecommunications Association, the nation’s principal cable lobby. Powell’s most defining moment as FCC chair was a series of somewhat bizarre remarks (video) regarding the agency’s role in closing the “digital divide.” Powell, the son of former Secretary of State Colin Powell, replaces Kyle McSlarrow, who left the NCTA earlier this month in order to join Comcast/NBC Universal.

Microsoft Teams up with Feds to Stop Spam

Working in concert with federal law enforcement agencies, Microsoft seized computer equipment across the country designed to cripple the “botnet” Rustock. The raids were part of a civil lawsuit Microsoft filed in federal court, alleging that spam distributed by the botnet harms the company’s products and reputation. Rustock was estimated to be responsible for about 40% of all botnet spam, which in turn accounts for the vast majority of all spam. Microsoft is known for its tough-on-botnet-spam stance, suggesting earlier this year that infected computers be banned from accessing the Internet.

Ninth Circuit Vacates Injunction in Keyword Advertising Case
By Kaethin Prizer – Edited by Kassity Liu

Network Automation, Inc. v. Advanced Systems Concepts, Inc., No. 10-55840 (9th Cir. Mar. 8, 2011)
Slip Opinion

The Ninth Circuit vacated the preliminary injunction granted by the district court to Advance Systems Concepts (“Systems”) in a trademark infringement case involving the use of keyword advertising.

The court found that the lower court erred in its analysis of whether Network Automation’s keyword advertising, which targeted the name of its competitor Systems’ software, created a likelihood of consumer confusion. The district court had prioritized the “Internet troika” factors that were emphasized by this court in Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1054 (9th Cir. 1999). The circuit court disagreed with this approach, holding that the “troika” factors should not be the controlling factors for all cases of trademark infringement that involve the internet, and added that the “troika” factors may only be appropriate for domain name disputes. In so holding, the court emphasized that “[w]e must be acutely aware of excessive rigidity in applying the law in the Internet context; emerging technologies require a flexible approach.”

IP Law Chat gives an overview of the case. Public Citizen and Eric Goldman provide thorough analyses of the decision. (more…)