District court dismisses patent infringement claim against Wildtangent
By Andrew Segna – Edited by Matt Gelfand

Ultramercial, LLC v. Hulu, LLC, No. CV 09-06918 RGK (C.D. Cal. Aug. 13, 2010)
Opinion hosted by The Hollywood Reporter

On August 13, the United States District Court for the Central District of California granted Wildtangent, Inc.’s motion to dismiss against Ultramercial, LLC’s patent infringement claim. Hulu, LLC also made a similar motion that was rendered moot. In granting the motion to dismiss, the court analyzed Ultramercial’s patent, which claims a means by which users can watch copyrighted material in exchange for viewing advertisements. The court evaluated the patent under the machine or transformation test endorsed by the Supreme Court in Bilski v. Kappos, 561 U.S. ___ (2010), as “a useful and important clue” to process patent validity.  The court also looked to whether the patent claimed an “abstract idea.” The court held that because the claimed invention deals with the abstract concept of advertisement, and because it is not tied to a machine nor does it transform data, the patent is invalid.

JOLT Digest previously reported on the Bilski decision. The 271 Patent Blog provides an overview of the decision in this case. Patents4Software critiques the decision and considers how this case could affect future applications of the Bilski decision. (more…)

Microsoft asks the Supreme Court to rule on the evidentiary standard for patent invalidity
By Abby Lauer – Edited by Matt Gelfand

Petition for Writ of Certiorari, Microsoft Corp. v. i4i Ltd. P’ship (U.S. 2010)
Petition, hosted by Patently-O

Last week, Microsoft announced that it has filed a petition for writ of certiorari to the Supreme Court in an effort to overturn a $290 million damages award imposed by a federal jury last year. The plaintiff in the case is i4i, L.P., a Canadian technology firm that has accused Microsoft of unlawfully incorporating its patented XML technology into the 2003 and 2007 versions of Microsoft Word.

Having lost in both the Eastern District of Texas and at the Federal Circuit, Microsoft is now asking the Supreme Court to reject the “clear and convincing” evidence standard for holding a patent invalid. Relying primarily on the Supreme Court case KSR International Co. v. Teleflex, Inc., 550 U.S. 398 (2007), Microsoft argues that the burden of proof for patent invalidity should be reduced when prior art that was not considered by the U.S. Patent and Trademark Office is presented to the court.

In August 2009, JOLT Digest reported on the district court’s decision in the case. Patently-O provides commentary on recent developments. (more…)

DC District Court Orders a Halt to Federally Funded Embryonic Stem Cell Research
By Jessica Palmer – Edited by Ryan Ward

Sherley v. Sebelius, 2010 U.S. Dist. LEXIS 86441 (D.D.C. August 23, 2010)
Memorandum Opinion

On August 23, the United States District Court for the District of Columbia granted a preliminary injunction blocking the implementation of the National Institutes of Health (NIH)’s July 2009 guidelines for human embryonic stem cell (hESC) research. Judge Royce Lamberth held that “because the Guidelines allow federal funding of ESC [Embryonic Stem Cell] research, which involves the destruction of embryos,” federal funding for hESC research “clearly violate[s]” the Dickey-Wicker Amendment.

The Dickey-Wicker Amendment, an appropriations bill rider originally passed in 1996 and renewed each appropriations cycle thereafter, prohibits the use of appropriated funds for “research in which a human embryo or embryos are destroyed.” P.L. 111-8 § 509 (2009). Judge Lamberth rejected the government’s argument that, under Dickey-Wicker, NIH could support research on hESCs, as long as federal funding did not support the initial derivation of the stem cell lines from human embryos. Judge Lamberth reasoned that the NIH’s interpretation of the Dickey-Wicker Amendment did not deserve Chevron deference because the statute is unambiguous: “the language of the statute reflects the unambiguous intent of Congress to enact a broad prohibition of funding research in which a human embryo is destroyed. This prohibition encompasses all ‘research in which’ an embryo is destroyed, not just the ‘piece of research’ in which the embryo is destroyed.”

Professor Glenn Cohen of Harvard Law School criticized the order at Concurring Opinions, arguing that “it is hard to find that the statute is ‘unambiguous’ in Chevron terms in the way Lamberth says.” Professor Russell Korobkin of UCLA, writing at The Volokh Conspiracy, found the grant of a preliminary injunction “troubling” because “the balance of hardships tilts strongly in the direction of hESC researchers and the patients who hope their work will lead to cures, not in the direction of the plaintiffs who might see their chances of winning a grant reduced.” Both Cohen and Korobkin predicted that the Court of Appeals for the District of Columbia Circuit will reverse the district court’s grant of an injunction. (more…)

By Emily Hoort

Attorneys General Demand Removal of Craigslist’s “Adult Services” Section

ScrippsNews reports that attorneys general in at least 18 states have demanded that Craigslist remove its adult services section. A failure to comply with this request will likely lead to a court battle, with possible charges that Craigslist is aiding and abetting illegal activity. There may also be legislative action calling for reforms of the Digital Millennium Copyright Act and Communications Decency Act. These statutes generally protect websites, such as Craigslist, from third parties’ illegal actions on their sites. Some observers point out that removing the adult services section will likely shift illegal sexual solicitations elsewhere, and will result in losing many of the screening benefits of a website such as Craigslist. Indeed, according to The Boston Globe, Craigslist has many screening and tracking safeguards in place that are stronger than other classified advertisement platforms.

Update: The New York Times reports that Craigslist has blocked access to its “adult services” content, replacing the link with a “censored” label.

Individuals Can Pursue Lawsuits Against Companies Who Label Products with Expired Patent Numbers

The Wall Street Journal reports that on Tuesday the U.S. Court of Appeals for the Federal Circuit in Washington held, in Stauffer v. Brooks Brothers, that patent lawyer Raymond Stauffer can pursue claims against Brooks Brothers stemming from the apparel chain marking its bow ties with expired patent numbers. It is illegal to erroneously label products with the wrong patent numbers, and individuals are allowed to sue for such mislabeling on the government’s behalf. Penalties range up to $500 per item, and successful plaintiffs are allowed to keep one-half of all penalties; they must submit the other half to the government. The Federal Circuit’s decision reversed a lower court ruling that dismissed Mr. Stauffer’s case for lack of standing. Bloomberg notes that this decision strengthens similar lawsuits against more than 350 companies.

Hewlett-Packard to Pay $55 Million to Settle Kickback Allegations

The Wall Street Journal reports that Hewlett-Packard has agreed to pay the U.S. Government $55 million to settle allegations that H-P paid illegal kickbacks to other companies for recommending H-P products to federal agencies. The Economic Times notes that this Justice Department case arose after whistleblowers revealed that H-P and other companies paid each other “influencer fees” for recommending their products to U.S. government agencies. H-P denies any wrongdoing, stating that it entered this $55 million settlement because it believes it will be best for stakeholders to resolve the matter and move forward.

Lawyer Violates Telephone Consumer Protection Act with Outsourced Newsletters
By Ian B. Brooks – Edited by Jad Mills

Holtzman v. Turza, No. 08-C-2014 (N.D. Ill. Aug. 3, 2010)
Opinion hosted by Google

The United States District Court for the Northern District of Illinois ruled that a lawyer makes unsolicited advertisements under the Telephone Consumer Protection Act (“TCPA”) when his primary purpose for hiring a company to distribute his materials via facsimile was to advertise his services.  Granting the plaintiff’s summary judgment motion, the court noted that the defendant hired a marketing company to send newsletters for the purpose of developing business and not for the purpose educating recipients.  The court further noted that although the primary advertising portion of the solicitation comprised only 25% of the fax, its prominence relative to the remaining portion of the fax countered the argument that the fax was not an advertisement.

Carolyn Elefant provides an overview of the case.  Eric Goldman provides an analysis of the facts and outcome. (more…)