By Chinh Vo

Spyware Vendor Settles Suit with FTC, Promises To Take Steps To Reduce Misuse

Ars Technica reports that software company Cyber Spy has agreed to cease marketing its keystroke-logging spyware in a way that attracts malicious users. The company’s promise is part of a settlement with the FTC, which charged Cyber Spy in 2008 with unfair selling and advertising because its Remote Spy product provided customers with instructions for attaching spyware to emails in order to track a target’s keystrokes and online activities. The district court in the case issued an injunction, temporarily banning Cyber Spy from selling Remote Spy. Under this settlement, Cyber Spy promises to stop promoting its Remote Spy application as a “100% undetectable” way to “Spy on Anyone. From Anywhere.” The company must also warn purchasers that using the software improperly may violate the law and take other steps to prevent malicious use of its product.

Lawyers Claim Google Deliberately Collected Data from Wi-Fi Networks

Wired reports that lawyers suing Google have claimed that a 2008 patent application demonstrates that the company deliberately programmed its Street View cars to collect private data from open Wi-Fi networks. Google is facing several class action lawsuits following its disclosure that its Street View cars intercepted Wi-Fi traffic, an action that the internet giant attributes to coding error. According to the lawyers, the patent application describes a method for increasing the accuracy of location-based services by intercepting data. Google spokeswoman Christine Chen stated that, despite the lawyers’ claims, the patent application “is entirely unrelated to the software code used to collect Wi-Fi information with Street View cars.” She added that not all of the patent applications that Google files “mature into real products or services,” but did not comment on whether Google has actually used the methods described in the particular patent application in question.

USPTO Proposes Fast Track To Expedite Patent Application Review

The Wall Street Journal reports that the U.S. Patent and Trademark Office is proposing a new three-track system that would allow applicants to pay an undisclosed premium, on top of the $1090 filing fee, to expedite review of their applications. Currently, the USPTO reviews patent applications mostly on a first-come, first-served basis. In a press release, USPTO Director David Kappos stated that “traditional ‘one-size-fits-all’ examination timing may not work for all applicants” and emphasized a goal of promoting efficiency. The USPTO has faced growing complaints from businesses due to its increasing backlog; last year it took 34.6 months on average for patent applications to be reviewed. The proposal could go into effect next year following a public comment period.

Federal Circuit Chooses Absurdity Over Judicial Claim Redrafting
By Chinh Vo – Edited by Jad Mills

Haemonetics Corp. v. Baxter Healthcare Corp., No. 2009-1557 (Fed. Cir. June 2, 2010)
Slip Opinion

On June 2, 2010, the Court of Appeals for the Federal Circuit reversed the claim construction of the District Court for the District of Massachusetts and vacated a jury verdict in favor of the plaintiff in a patent infringement suit.

Haemonetics Corp. (“Haemonetics”) had filed a patent infringement lawsuit against Fenwal Inc. (“Fenwal”) alleging infringement of its patent for a compact blood centrifuge device. The district court, after construing the last two references to the term “centrifugal unit” in claim 16 as referring to only the centrifugal vessel and not also its adjoining tubing, had awarded over $11.3 million in lost profits damages and over $4.3 million in reasonable royalty damages. The appeals court disagreed with the district court’s claim construction, noting that language from the claim preamble clearly defined a centrifugal unit as including both “a centrifugal component and a plurality of tubes.” The court then vacated and remanded the jury verdict, the district court’s grant of judgment as a matter of law (“JMOL”) that claim 16 was not indefinite, the district court’s denial of JMOL that claim 16 was neither anticipated by prior invention nor obvious, and the district court’s award of prospective remedies, finding that all of these determinations relied on the district court’s erroneous claim construction.

The Patent Prospector provides an overview of the case. Top Legal News summarizes the holdings in the case. (more…)

Federal Circuit Affirms Dismissal of Patent Infringement Suit on Grounds of Equitable Estoppel
By Abby Lauer – Edited by Chinh Vo

Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., No. 2009-1147 (Fed. Cir. May 24, 2010)
Slip opinion

In a recent opinion, the Federal Circuit affirmed the U.S. District Court for the Southern District of New York, which had granted defendant Clariti’s summary judgment motion to dismiss a patent infringement lawsuit brought by plaintiff Aspex.

The Federal Circuit held that Aspex’s lawsuit was properly dismissed on grounds of equitable estoppel. Because Aspex waited three years after initially accusing Clariti of patent infringement to bring a lawsuit, the court agreed with the district court that the elements of equitable estoppel had indisputably been established. In so holding, the court revived an infrequently-applied doctrine first established by the Federal Circuit’s 1992 en banc decision in A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992).

IPWatchdog and Inventive Step provide an overview of the case. (more…)

By Sharona Hakimi

Facebook Responds to Privacy Concerns

The New York Times reports that on May 26, Facebook CEO Mark Zuckerberg publicly addressed a growing number of recent complaints about Facebook’s privacy settings. The settings sparked “vociferous complaints” across the globe from users, privacy advocates, and government officials. The current system requires users to sort through over 150 privacy options, including the controversial “instant personalization” feature, which allows third party sites to access users’ personal data. Zuckerberg announced plans that includes simplifying privacy controls and revealing minimal information when users search the directory.

Congress Opposes FCC’s Proposal to Regulate Broadband

CNET reports that in the past week, 282 Republican and Democratic members of Congress signed letters to the FCC expressing their concerns over the FCC’s proposal to reclassify broadband as a telecommunication service. The FCC is currently drafting new Net neutrality rules in the wake of Comcast Corp. v FCC, and to reassert its authority the agency has proposed a “third way” of regulating broadband by reclassifying it as a Title II telecommunication service. This would subject broadband services to many of the same rules that apply to traditional telephone services. The letters included requested that the FCC refrain from reclassifying broadband, as Congress plans to address the issue in its upcoming efforts to revise the Communications Act.

Student Files Suit Against Pennsylvania High School in Sexting Case

Wired reports that an unnamed 19-year-old filed suit against her former Pennsylvania high school after school officials confiscated and searched her phone, and found semi-nude photos of her. The student was one of sixteen at Tunkhannock Area High School threatened with criminal child pornography charges in 2009 unless she agreed to six months of probation, drug testing, and attendance of a five-week, 10-hour program. Although she was not charged, the student is seeking to have the images, which are available in the government record, destroyed; she is also seeking reimbursement for the educational course and lost wages.

Ninth Circuit Affirms Injunction Against Online Check-Issuer Qchex
By Leocadie Welling – Edited by Chinh Vo

Federal Trade Commission v. Neovi, Inc., No. 09-55093 (9th Cir. May 14, 2010)
Slip Opinion

On May 14, 2010, the Ninth Circuit affirmed a grant of summary judgment in favor of the Federal Trade Commission (FTC) and an injunction granted by the Southern District of California against appellant Neovi, Inc (“Neovi”). The FTC had brought claims alleging that Neovi, through its online Qchex service, had engaged in “unfair methods of competition” by issuing unverified checks through its website. The court agreed with the FTC, finding that appellant did not take sufficient measures to prevent and address fraud. The injunction prohibits Qchex from continuing to operate without following a court-specified verification process. It further orders Qchex to disgorge its total revenues, which the district court found to be in the amount of $535,358.

Eric Goldman provides an overview of the case and its factual background, and criticizes the opinion’s failure to discuss the relevance of the statutory protection for Internet services found in 47 U.S.C. § 230. Digital Society has a brief discussion of the decision. Ars Technica has two posts from 2009 (February and November) that provide useful background on the case. (more…)