In a case that confirms the advisability of registering your copyright in software and websites, the Ninth Circuit Court of Appeals has denied statutory damages in the context of a continuing infringement.  The copyright act does not allow statutory damages or attorney’s fees if the infringement “commenced” prior to the registration of the copyright (subject to a 3 month relation back exception for newly published works). 17 U.S.C. Sec. 412.

In Derek Andrews v. Poof Apparel, the defendant had copied the decorative tags that the plaintiff attached to its clothing items, and attached them to its own clothing line.  The tags gave rise to the copyright claim (the case also involved trademark infringement claims).  On the copyright claim, the District Court awarded the plaintiff $15,000 in statutory damages and  $296,090.50 in attorneys' fees.  The Court of Appeals stated that the Copyright Act leaves no room for discretion on this point: “in order to recover statutory damages, the copyrighted work must have been registered prior to commencement of the infringement, unless the registration is made within three months after first publication of the work.”  The court noted that other courts have construed Section 412 in a similar manner, finding that infringement commences for the purposes of § 412 when the first act in a series of acts constituting continuing infringement occurs. Accordingly, “the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one continuing infringement under § 412.”

The case highlights the importance of registering copyrights early.  One of the most frequent areas of copyright infringement we see involves software and content from websites (or entire websites themselves).  In these situations actual damages can be very difficult to prove, and the availability of attorneys fees and statutory damages greatly enhances your case, and ability to resolve these issues quickly and on favorable terms.

The 2008 PricewaterhouseCoopers Patent Litigation Study has been released.  Peter Zura's excellent 271 Patent Blog summarizes some highlights as follows:

Interestingly, with the alleged "explosion" in patent litigation, there were no identifiable increases in time-to-trial. In fact, since 2005, the median time-to-trial has dropped by more than 6 months.

Regarding the "Top Ten" Rocket Dockets, the breakdown is as follows, along with the median time-to-trial (in years):

1) ED Virginia - 0.88
2) WD Wisconsin - 0.91
3) CD California - 1.71
4) MD Florida - 1.71
5) ED Texas - 1.79
6) Delaware - 1.89
6) Kansas - 1.89
8) ED Pennsylvania - 1.91
9) SD Texas - 1.99
10) ED Michigan - 2.03

Some notable "Crawler" dockets include Massachusetts (3.76 years) and Connecticut (4.66 years).

The "Top Five" patent-friendly jurisdictions, along with overall success rates, include:

Click to read more ...

Let’s assume that you have an un-pickable lock on an impenetrable freezer in your basement, and assume further that freezer is full of body parts from your victims (these are assumptions – right?). The Feds think they know what's in there, but they can’t get in unless you unlock it. Can they legally compel you to open it, or can you avoid being so compelled by invoking your 5^th Amendment right to not incriminate yourself?

The equivalent of this scenario is playing out in child pornography cases around the country, where the alleged pornographers have used widely available public encryption products (which are very secure), to lock up the damning content on their computers. Without the magic words (or encryption key), law enforcement will, as a practical matter, never know what is on that drive. Law enforcement argues that where the intent is purely to hide evidence of a crime, there needs to be some way for the courts to allow law enforcement to access the evidence.  They are starting to ask the courts to compel the bad guys to cough up the passwords. 

Interestingly, in the case that is currently getting all of the attention on this, US v. Boucher, federal Magistrate Judge Jerome J. Niedermeier has addressed the “opening of the safe” analogy, concluding that if the safe requires a physical key, a suspect can be compelled to turn it over, but if it is a combination that exists in the persons head, disclosing that is tantamount to a “testimonial act” implicating the 5^th Amendment. Therefore, he ruled that requiring the suspect to enter his password would violate his right against self-incrimination. (So what if the combination is written down – is that writing the equivalent to a physical key? And even if it is the same as a physical key, isn’t the knowledge of the location of the writing in that person's head - the disclosure of which would involve a “testimonial act”, and on and on). The government has appealed, and the case is currently being investigated by a grand jury.

The case is unique to digital information, because the analogy that there is just no other way to get the evidence does not really hold up in the physical world. There is always some way to get into the safe. However, using widely available open source encryption software, such as PGP, it is virtually impossible to unencrypt files without the password. The only thing to do is to use automated guessing software, that systematically and repeatedly guesses at the password - a process that could take many years, even with a lot of computing power. The Feds are scared, because an adverse ruling here could create a safe harbor for information that would be essentially unreachable, potentially benefiting drug dealers, terrorists, and the child pornography industry. Civil Liberty groups such as the EFF say unbreakable encryption “is one of the few ways people can protect what they write, read and watch online,” and support the application of 5^th Amendment rights in cases such as these.  This will be interesting to follow.  It is definitely one where the new technology is creating some interesting challenges for the application of existing laws.

The Washington Post article on this topic is here.

Related New York Times article is here.

Photo complements of Colin Ashe under creative commons

The lists are starting to roll in.  Check out Pogo's Chronicles of Dissent: Top Ten Privacy Breaches of 2007, and Threat Level's look at the year 2007  from a privacy/security perspective.  The Metropolitan Counsel provides us with the Advertising, Marketing And Promotions Law Year In Review,   and the USPTO Announces it's year end results, touting "historic improvement in the quality of patent and trademark reviews and subsequently the quality of issued patents and registered trademarks."  Euclid Managers offers its Predictions for 2008 Security Threats, PatentlyO offers Ten Ways to Spend your Holiday Bonus (I got the Nuvi), the TTAB Blog reports that the Leo Stoller Blog Has Returned, and Chevy Chase reports that Generalissimo Francisco Franco is Still Dead. 

Happy Holidays, and Best Wishes for a prosperous 2008 from the TechKnowledgy Blog!

Updated Oct. 26, 2007  to add a link to the document - see:  Principles for User Generated Content Services

Several of the largest media companies have agreed to use technology to eliminate copyright-infringing content uploaded by Web users and to block any pirated material before it is publicly accessible.  That is part of a set of principles designed to "offer a road map for unlocking the enormous potential of online video and user-generated content," Disney Chief Executive Bob Iger said in a statement issued by the participating companies.

Some of the other companies involved are Viacom Inc, Walt Disney Co, Microsoft Corp, News Corp's Fox and MySpace units, CBS Corp, General Electric Co's NBC Universal, and online video services such as Veoh Networks and Dailymotion.  Notably absent was Google, owner of YouTube.

Essentially, the copyright holders in the group have agreed not to pursue Internet companies for infringement claims if their sites adhere to certain principles. Those principles include eliminating copyright-infringing content uploaded by users to Web sites, and blocking any infringing material before it is publicly accessible.  The pact reportedly is not legally binding, but more of a trust-building exercise among the companies, according to the Wall Street Journal report. 

That is how Raymond T. Nimmer explains a trio of decisions by that court that have been handed down in the last several months.  Collectively, the decisions strike down arbitration clauses, class action waivers, and choice of law/forum selection clauses in various agreements. 

In Nagrampa v. Mailcoups, Inc., the Ninth Circuit, focussing on the concept of procedural unconscionability, found a mandatory arbitration and forum selection clause included in a franchise agreement unconscionable.  The reason cited by the court was that the clause lacked mutuality where the franchisor could use the judicial process in some circumstances, but the franchisee could not.  Of course, according to that reasoning, presumably each and every contract clause would have to have mirror image mutuality.  Nimmer points out that this has never been a requirement of contract law.  The court also cited as a basis for its reasoning, the conclusion that the forum selection clause had "no justification other than as a means of maximizing an advantage over [Franchisees]."  Nimmer's take on that is basically…right-so the problem with that would be?

The next case in the trio is Douglas v. U.S. District Court, where the Ninth Circuit held that an amendment of an online agreement lacked assent.  The court went on to conclude that even if there had been assent, the terms for waiver of class action rights and mandatory arbitration were unconscionable.  In doing so, the Court noted the stance it had taken in Nagrampa that the mere fact that a customer has meaningful choices as to other service providers does not defeat a claim of procedural unconscionability.  In other words, the customer is free to shop around for other service providers who may have different contractual terms.  According to the Ninth Circuit, the customer need not do so, and it can simply ignore the terms with the service provider it chooses.

The last case is Davis v. O'Melveny & Myers.  In the Davis case, the Ninth Circuit held that an arbitration clause in an agreement with an employee was unconscionable.  Nimmer explains that the Davis court found the agreement "procedurally unconscionable because the law firm did not offer the employee the option of rejecting the clause and continuing as an employee with an unmodified contract."

I guess it might be helpful to back up a bit, and talk about when an agreement, or part of an agreement, can be disregarded as unconscionable.  Historically, courts have required both substantive and procedural unconscionability to exist before striking down an agreement. In general, substantive unconscionability exists when an agreement itself is so one-sided that it shocks the senses, while procedural unconscionability focuses on the bargaining process (or lack thereof) used to reach the final agreement. The current view is that these two elements must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability. 

In effect, the Ninth Circuit appears to be expanding the concept of procedural unconscionability to essentially eliminate the ability of companies to include mandatory arbitration, class action waivers, or forum selection clauses in any standard, non-negotiated contracts.  Under the views of the Ninth Circuit, companies do not have the option of presenting a take it or leave it contract to their customers (even though the customers could choose other service providers).  The Ninth Circuit, instead, is simply zapping those provisions out of standard contracts, which Nimmer argues is the kind of thing typically reserved to the legislature (and courts on the planet Xenon). 

Photo courtesy of David Darkmatter under Creative Commons

On Wednesday, a federal judge in California granted class-action status to a lawsuit against Target Corp. filed by the Baltimore-based National Federation for the Blind under the American's with Disabilities Act and two state law claims. 

"This is a tremendous step forward for blind people throughout the country who for too long have been denied equal access to the Internet economy," said Marc Maurer, president of the NFB. "All e-commerce businesses should take note of this decision and immediately take steps to open their doors to the blind."

This comes on the heels of the DOJ settlement with Sylvan Learning Centers, and bodes well for increased accessibility for blind web surfers.  Want to make your website more accessible?  Check out the World Wide Web Consortium Web Content Accessibility Guidelines.

Here's the E-Commerce Times Article with more details.

The TechLawJournal has two articles today that do an excellent job of summarizing the state of the law as it applies to web sites and the ADA, and the recent settlement agreement between the Department of Justice and Sylvan Learning Centers.  The settlement agreement imposes on Sylvan obligations of public accommodation under the Americans with Disabilities Act.  This is not necessarily consistent with the limited judicial precedent on the topic.  The articles are reproduced below with permission from the TLJ.  By the way, although much of it is subscription based, this type of excellent content is typical of what you will find at David Carney's TLJ.

Click to read more ...

This is a tremendous lecture from Randy Pausch, given as part of the "Last Lecture" series, where professors are asked to speak to their audience as if they were giving their last lecture, on the topics that are most important to them.   Pausch, a Carnegie Mellon University computer-science professor, had coincidentally just  been diagnosed with pancreatic cancer, and is expected to live just a few months, making his presentation particularly poignant.  This is one brilliant guy, and he provides his audience with an entertaining view of life's lessons, delivered in an upbeat presentation that will give you a fresh outlook on life, work, and personal fulfillment.  The talk is titled "How to Live Your Childhood Dreams".  Not your typical fare for the TechKnowledgy Blog, but the fact that Pausch is a virtual reality pioneer (visit Alice) was enough of an excuse to share this with you all.  It is a gem.

Here is a link where you can watch the complete lecture

Here is a link to the transcript

Time Management Slides from Randy Pausch

SlashDot on the lecture

You know the Video Professor - he's the guy on those infomercials that urges you to buy his computer education programs by trying them for free.  The company even encourages consumers to search for reviews online before buying.  Problem is, lots of consumers are complaining online that they were mislead as to the "free" part, or are otherwise unhappy with the product.  Perhaps in an effort to draw more attention to the negative reviews, the Video Professor has taken to suing the bastards who are saying these bad things. 

Do you suppose the Prof. is aware of the Streisand Effect?  Or the likelihood of succeeding in stifling anonymous criticism in light of the First Amendment rights involved and other available defenses?  In any event, right or wrong, the online world does not like bullies, and the backlash has begun (see below).

On a practical note, these links provide a good tutorial and resources (including forms) for those involved, or considering getting involved, in litigation to identify anonymous internet posters.

Video Professor sues anonymous griping posters, demands their identities

Video Professor Sues Anonymous Critics

Politicians, infomercial kings try to stifle anonymous Internet speech

Letter from Public Citizen Litigation Group

The Video Professor Sues His Unnamed Critics

-Photo courtesy of Llyod Doppler under Creative Commons

AltLaw is a web searchable database of federal court opinions.  Pretty handy.  Here's what it says about itself:

AltLaw is a joint project of Columbia Law School’s Program on Law and Technology, and the Silicon Flatirons Program at the University of Colorado Law School. AltLaw was written by Stuart Sierra and Paul Ohm, with help from Luis Villa, and produced by Tim Wu.

For most courts, opinions are available from mid 1990's to April of 2007, and recent opinions should be available soon.  Before long, the site expects to be able to offer opinions within 24 hours of publication by the courts.  More from the site:

The law is meant to belong to the people, but it can be surprisingly hard to find. Case reports, a major part of the laws of the United States, are hard to get at, and even when on the Internet, rarely searchable. To get full access you generally need either a library of law reports, or an expensive subscription to an online database, which can cost hundreds of dollars per hour.

AltLaw is a small effort to change that—to make the common law a bit more common. AltLaw provides the first free, full-text searchable database of Supreme Court and Federal Appellate case reports. It is a resource for attorneys, legal scholars, and the general public.

Features

• Full text search of the last decade or so of federal appellate and Supreme Court opinions.
• Advanced search options (proximity searching, Boolean, concentration, wildcards, etc.)
• Fast and free
• Updated daily (not yet, work in progress)

Limits

• Coverage, for most Circuits, limited to about the last 10 to 15 years.
• West Reporter Citations (i.e., 23 F.3d 178) not yet available (work in progress)
• As of yet, no state law or district court cases.

Watch out Westlaw and Lexis . . ..

The Appellate Court of Illinois recently denied a motion to dismiss filed by the online stock photo company Corbis, effectively preserving claims that Corbis violated Jame's Browns right of publicity by offereing to license photos of the the late singer.  The decision is here.  The case is interesting, because presumably there would be some uses of the photos that would not violate Brown's right of publicity, for fair use or first amendment reasons. Corbis would presumably license the photos to anyone who would pay the fee, and note that the photo comes without a publicity release, leaving it up to the licensee to use the photo in a lawful manner.  Nonetheless, the court is willing to entertain the claim that Corbis, by offering to license the photos, is thereby engaging in some commercial activity for which it may need the permission or consent of The Godfather of Soul.  Internet Cases has a good summary of the case.

The US District Court in Utah has ruled that "Novell is the owner of the UNIX and UnixWare copyrights" that are the subject of the dispute between Novell and SCO.  The opinion will undoubtedly impact SCO's suit against IBM.  The opinion is here.  The Court concluded:

"Therefore, Novell is entitled to a declaration of rights under its Fourth Claim for Relief that it was and is entitled, at its sole discretion, to direct SCO to waive its claims against IBM and Sequent, and SCO is obligated to recognize Novell's waiver of SCO's claims against IBM and Sequent. Accordingly, Novell's motion for partial summary judgment on its Fourth Claim for Relief for declaratory judgment is granted, and SCO's cross-motion for summary judgment on Novell's Fourth Claim for Relief is denied."

SCO responded in a statement that it "is obviously disappointed with the ruling", but that it is only a flesh wound, and that even though its arms and legs had been chopped off,  it could still butt IBM and Novell with its head.

Just finished my Journal of the Licensing Executive Society, which includes the results of their most recent member survey on licensing issues.  There were some interesting statistics that suggest some best practices to adopt in negotiating deals.  For example, when asked "thinking about licensing agreements entered into in the last twelve months, with the benefit of hindsight, which, if any of the following contract characteristics would you now restructure?"  The top three answers were as follows:

·        Field of use restrictions (43%)

·        Technical Milestones (40%)

·        Business Milestones (44%)

At the low end of the spectrum were clauses on most favored nation provisions and terms of use.  As a follow-up a question, the survey inquired "what are three most common reasons why you would restructure some of last years deals if you could?"  The top answers to that question were as follows:

·        The other side is not putting their promised effort into the product/technology. (53%)

·        Revised business strategy. (40%)

·        New Information has emerged about the market opportunity. (39%)

I think it is interesting to note that 28% responded that they would restructure some of last year's deals if they could, because they now realize that they made mistakes in negotiating.  Isn't that amazing?  Over one fourth of the respondents would restructure some of last year's deals, and mostly because the other side is not putting their promised effort into the product/technology. Even more amazing is the fact that among respondents that identified themselves in the university/government space, a whopping 71.8% complain that the reason for wanting to restructure would be the failure of the other side to put forth the promised effort.  

So what does all this mean?  The survey results would tend to suggest that when structuring and drafting license and development agreements, more focus should be placed on the technical and business milestones, and, to the extent possible, contractual provisions should be structured to provide some assurance that each party will, in fact, put forth the promised level of effort into the subject technology. Carefully crafted, detailed, technical and business milestones will clarify the party's expectations, duties, obligations, and assumptions on the front end of the deal, and considerably decrease the likelihood of any surprises in terms of the level of effort or achievement as the transaction proceeds.