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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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3D Printing, Net Neutrality, and the Internet: Symposium Introduction

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 Charlie Stiernberg

Proposed SHIELD Act Would Require Non-Practicing Entities to Pay Legal Costs

The Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012 (“SHIELD Act”) aims to deter non-practicing entities (“NPEs”)—patent holders that do not make, use, or sell their claimed invention—from filing lawsuits by requiring such plaintiffs to pay successful defendants’ attorney fees, if a court determines that the suit did not have a reasonable likelihood of succeeding. Congressman Peter Defazio (D-OR) introduced H.R. 6245 on August 1 to supplement 35 U.S.C. § 285, which provides for attorney fees in “exceptional cases,” with a new section 285A.  The SHIELD Act would only apply to computer software and hardware patents, both defined within the act. According to the Wall Street Journal, Rep. DeFazio intends to target companies that “buy the patents solely to sue the American tech startups that created the products.”

Raytheon Plans to Pursue Trade Secret Misappropriation Claims against Indigo Systems and FLIR

Following a favorable reversal in the Federal Circuit, Raytheon Co. plans to pursue its trade secret misappropriation claims against Indigo Systems Corp. and FLIR Systems Inc., the New York Times reports. In a unanimous opinion by Judge Linn, the Federal Circuit overturned a decision by the United States District Court for the Eastern District of Texas that had dismissed claims involving infrared camera technology because of the statute of limitations. In so holding, the Federal Circuit reasoned that Raytheon had reasonably relied on Indigo/FLIR’s repeated false assurances that Raytheon’s trade secrets were adequately protected.

Proposed Amendments to ECPA Would Require Warrants for Cloud Data

New legislation proposed by Rep. Jerrold Nadler (D-NY) and Rep. John Conyers Jr. (D-MI) would amend the Electronic Communications Privacy Act (ECPA) to require the government to obtain a probable-cause warrant to access data stored in the cloud. The proposal would protect files in Dropbox, Facebook, and Google storage accounts, among others. Under the current ECPA, largely unchanged since the Reagan administration, the government can acquire such content as long as it has been stored on a third-party server for 180 days or more. Senator Patrick Leahy (D-VT) proposed similar legislation last year, but it never got a hearing in the Judiciary Committee. Wired predicts a similar fate for this new proposal.

Posted On Aug - 13 - 2012 Comments Off READ FULL POST

Illinois Prohibits Employers from Requiring Employees to Provide Social Networking Passwords
By Andrew Crocker – Edited by Michael Hoven

H.B. 3782, 97th Gen. Assemb. (Ill. 2012)
Bill

On August 1, Illinois Governor Pat Quinn signed H.B. 3782, which amends Illinois’ Right to Privacy in the Workplace law to prohibit employers from “request[ing] or requir[ing] any employee or prospective employee to provide any password or other related account information in order to gain access to the employee’s or prospective employee’s account or profile on a social networking website or to demand access in any manner to an employee’s or prospective employee’s account or profile on a social networking website.” H.B. 3782, 97th Gen. Assemb. (Ill. 2012) (to be codified at 820 Ill. Comp. Stat 55/10(b)(1)). Illinois is the second state to enact such a provision, following Maryland’s passage of a similar bill in April, according to the ACLU.

The governor’s office issued a press release that describes the legislature’s intent in passing the bill.

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Posted On Aug - 11 - 2012 Comments Off READ FULL POST

Third Circuit Subjects Reverse Payments to Strict Antitrust Scrutiny

By Jie Zhang – Edited by Charlie Stiernberg

In Re: K-Dur Antitrust Litigation, No. 10-2077 (3d Cir. July 16, 2012)

Slip opinion

The Third Circuit Court of Appeals reversed the summary judgment of the United States District Court for the District of New Jersey, which had rejected an antitrust challenge to a reverse payment agreement between the K-Dur patent holder Schering-Plough Corporation (“Schering”) and the generic drug manufacturer Upsher-Smith Laboratories (“Upsher”) to delay Upsher’s market entry.

The Third Circuit held that the rule of reason analysis should be applied in antitrust claims involving reverse payments and remanded the case to the district court for further proceedings.  The rule of reason analysis requires the court to treat reverse payments as prima facie evidence of unreasonable restraint of trade, with the possibility of rebuttal by showing that the payment was not for delayed market entry or had pro-competitive effects.  In so holding, the Third Circuit emphasized Congress’ intent in passing the Hatch-Waxman Act — to provide incentive for competition in the pharmaceutical industry and increase availability of generic drugs.

Bloomberg Businessweek provides an overview of the case.  The Washington Post provides additional background information and reports on the reaction of the FTC and pharmaceutical companies.

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Posted On Aug - 7 - 2012 Comments Off READ FULL POST

By Susanna Lichter

FTC Proposes Stricter Rules for Web Sites Visited by Children

The Federal Trade Commission recently proposed new regulations that would require third party advertising applications to comply with the Children’s Online Privacy Protection Act (COPPA), the New York Times reports. COPPA, which took effect in 2000, currently requires web site operators, but not website add-ons, to notify parents and obtain consent when personal information is collected from children under 13 years of age. In addition to extending COPPA to third parties, the proposed rule would change the present requirement that websites attracting both children and adults treat all visitors as children, allowing a web site to screen users by asking their age and applying COPPA privacy protections only to those who say they are under 13. Websites whose content is anticipated to attract primarily children would still be required to treat all users as children, however.

Appeals Court Says Embedding is Not Infringement in Flava Works, Inc. v. Gunter

On Thursday the Seventh Circuit Court of Appeals ruled that myVidster, a site that allows users to “bookmark” web videos by embedding them on its site surrounded by ads, was not liable to pornography producer Flava Works for copyright infringement when myVidster users embedded copies of Flava videos on myVidster. Flava Works, Inc. v. Gunter, No. 11-3190 (7th Cir. Aug. 2, 2012). Judge Richard Posner, writing for a unanimous three-judge panel, reasoned that because simply viewing an infringing copy of a video isn’t copyright infringement, and the underlying data is actually being streamed directly from third-party servers to user computers, myVidster was not guilty of direct copyright infringement. Posner also found that myVidster was not liable for secondary copyright infringement, comparing myVidster’s level of inducement of its user’s actions to a bookstore from which a thief steals a copyrighted book and reads it: a “bad thing to do,” but not one that violates the rights conferred by the Copyright Act. Posner further requested that Congress clarify how copyright law should be applied in the age of Internet video.

Jury Trial Begins with Testimony by Phil Schiller in Apple v. Samsung

Phil Schiller, Apple’s senior vice president of worldwide marketing, testified in the Apple Inc. v. Samsung Electronics Co. trial Friday that Samsung outright copied all of Apple’s patented design, according to Wired. Apple claims Samsung is infringing on design patents for the iPhone and iPad and utility patents while Samsung claims Apple is infringing on its patent holdings. During questioning by Apple’s legal team Schiller explained his reaction to Samsung’s product, saying “I was pretty shocked when I saw the Galaxy S phone and the extent to which it appeared to copy Apple’s products” and that his “first thought was they’re going to steal our whole product line.” Addressing the issue of consumer “confusion” on cross examination Schiller testified “I looked at this phone and it was my opinion that Samsung has ripped off a number of our design elements and in doing that may be causing confusion.” The two companies have been embroiled in court battles for over a year. The jury trial for the case commenced Monday.

Posted On Aug - 7 - 2012 Comments Off READ FULL POST

Fourth Circuit Holds that Violating Employer’s Computer Use Restrictions Is Not a CFAA Violation

By Andrew Crocker – Edited by Michael Hoven

WEC Carolina Energy Solutions, LLC v. Miller, No. 11-1201 (4th Cir. Jul. 26, 2012)

Slip opinion

On July 26, the Court of Appeals for the Fourth Circuit affirmed the South Carolina District Court in holding that Willie Miller’s violation of his employer WEC’s use restrictions on its proprietary computer systems and information was not a violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030. WEC Carolina Energy Solutions, LLC v. Miller, No. 11-1201, slip op. at 2 (4th Cir. Jul. 26, 2012).

With the decision in WEC, the Fourth Circuit adds to a split among the federal circuit courts over whether an employee’s violation of an employer’s restrictions on use of a computer or computerized information that the employee is otherwise authorized to access can serve as the required element of “access[] . . . without authorization” or access “exceeding authorized access” for proving a CFAA violation. § 1030(a)(1). In the CFAA, to “exceed[] authorized access” is defined as “to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.” § 1030(e)(6). The court held that this definition is best read literally, such that a CFAA violation must involve improper access to a computer or computerized information, and not its “improper use.” WEC, No 11-1201 at 9. This reading is related, although not identical, to the Ninth Circuit’s recent en banc holding in United States v. Nosal, No. 10-10038 (9th Cir. April 10, 2012), previously reported on by the Digest, and in direct conflict with other circuits’ construction of the statute, notably the Seventh Circuit in International Airport Centers, LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006).

Bloomberg BNA provides an overview of the case. Eric Goldman Blog has more context on the circuit split.
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Posted On Aug - 6 - 2012 Comments Off READ FULL POST
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