Amicus Briefs Filed in Bilski Case Regarding Business Method Patent

The case of Bilski v. Doll, set for oral argument in the U.S. Supreme Court on November 9, may be one of the more significant patent cases in recent memory.  At issue is the scope of subject matter that is eligible for patent protection, governed by section 101 of the Patent Act.  The petitioner Bilski is seeking to patent a “business method,” an allegedly novel process for hedging risk in commodities trading.  His claims were rejected as unpatentable by the Patent and Trademark Office, and by the Federal Circuit appellate court.  The Federal Circuit held that a process must (1) be tied to a machine, or (2) transform matter to a different state or thing, in order to be patentable.  Bilski challenges that ruling and asserts that pure methods can be patentable.

Friday, October 2 saw the latest round of amicus (non-party, “friend of court”) briefs filed in the case, among them a brief by the Software & Information Industry Association.  The SIIA agreed with the results in the lower court, arguing that Bilski’s method is unpatentable.  The SIIA, however, urged the Court not to go “too far” and call into question the patentability of computer software.  The SIIA explained that software inventions have long been treated as patentable by the courts and the Patent and Trademark Office, and that the software and information industries have thrived with the availability of patents.  The promise of patent exclusivity is one factor that leads to investment in the industry.

Over 30 amicus briefs have been filed in the case, with many more still pouring in.  Further updates will follow after oral argument in the case.

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What Does Free Speech Have to do With Software Piracy? DC Court Takes Up the Issue

The long-running case of Solers, Inc. v. Doe in the District of Columbia raises the interesting dilemma of balancing significant free speech rights with the interest of an alleged "victim" to pursue claims against an alleged anonymous defamer.  Usually, this issue arises in the context of an online message board poster's public diatribe against someone or something, made under a pseudonym.  The alleged victim then sues the poster under the name "John Doe" and immediately subpoenas the web site host or publisher to try to discover the real identity of the poster.  Thus far, courts have acknowledged the transcendental importance of free speech and, for the most part, blocked disclosure of the posters' identities.  A collection of some of those cases is described here.  In Solers, there is a twist.  An informant ("whistleblower") made a private report to the SIIA via a piracy reporting link on the SIIA's web site, and Solers subsequently embarked on a quest to unmask that informant.  The latest appellate ruling in the case is a mixed bag for Solers, establishing significant hurdles that make it unlikely for Solers to acquire the identity of the informant, but giving Solers one more shot to try.  More significantly, the decision adds to a body of case law addressing when an alleged claim of wrongdoing may overcome the First Amendment right to make anonymous speech.

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Cablevision Case Portends Battles to Come

As noted earlier in this blog, two weeks ago the Supreme Court denied cert in the case of Cable News Network, Inc. v. CSC Holdings, Inc. (“Cablevision”).  That order leaves in place Cablevision’s appellate victory, allowing it (for now) to continue offering its “remote DVR” service to cable customers, without payment of additional royalties for the storage and delivery of that programming.  The result was somewhat surprising to experts, and many had expected the Supreme Court to hear the case.  But more than anything else, the result signals a looming battle over secondary liability principles – principles that the plaintiffs chose not to put into play in the Cablevision case – and how the landmark Universal Pictures v. Sony (“Betamax”) case will be applied to similar digital services.


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Supreme Court Agrees to Hear Appeal in Important Business Method Patent Case

The United States Supreme Court issued an order yesterday granting certiorari in Bilski v. Doll, a case that tests the limits of patenting business methods and other processes, including some software-related inventions. The order comes as a surprise to many experts in the patent law and technology communities, and the Bilski case will be one of the more closely watched IP cases in the Supreme Court in recent memory.

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Iowa Tile Design Firm, Creative Edge Master Shop, Learns The Hard Way That Piracy Is Not A Cost Cutting Measure

Creative Edge Master Shop of Fairfield, Iowa, and its affiliate, Flex Kits LLC, were recently targeted by SIIA and five of its member software companies, following a confidential tip that Creative Edge and Flex Kits were using illegally-installed (unlicensed) copies of software in their business operations.  A lawsuit was filed after the alleged infringers failed to resolve the case through SIIA’s voluntary audit program.  It has now been announced that the case has settled.  In addition to requiring Creative Edge and Flex Kits to update their licenses to adequately cover the software use, and to implement new internal compliance measure, the settlement included a “six figure payment” by Creative Edge to SIIA and its members, according to a press release announcing the settlement.  

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Notorious "Pirate Bay" Founders Sentenced to Prison

In one of the more significant statements against piracy in recent memory, four founders of one of the world's most notorious "pirate" sites, the Pirate Bay web site created in Sweden, were sentenced on Friday to a year in prison and ordered to pay a $3.6 million fine by a Swedish court.  Sweden had long been considered somewhat of a "safe haven" for Internet pirates to operate in, and is known for a culture (especially among its younger citizens) that not only widely accepted, but promoted, piracy of copyrighted materials.  There is even a political party in Sweden, the "Pirate Party," whose primary agenda is making copyrighted materials freely available.  Copyright owners in the United States and other countries, along with their governments, had been working with the Swedish government to step up enforcement of copyright laws and change the perception of Sweden as a lawless territory when it comes to intellectual property.

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Auction Litigation Continues

SIIA and other organizations have well documented the problem of copyright infringement on auction and resale sites such as eBay, Amazon, Craigslist, iOffer and other similar sites.  SIIA and its members monitor these sites and perform test purchases looking for infringing content, and sometimes file lawsuits against the offending sellers.  The tide of these cases has not stemmed in 2009, as the need to maintain an effective deterrent presence continues -- both to protect the intellectual property interest of its members, and to protect their consumers against fraudulent attempts to pass off substandard goods as the "real thing."

SIIA has settled dozens of cases in the past year on behalf of its software and content members, some of which will be described in an upcoming SIIA press release.  The results have ranged from substantial financial penalties, to seller bankruptcies, and in some cases even jail time.  Dozens of more cases are on the way.  In tandem with SIIA's other educational efforts, the litigation programs aim to discourage careless or illegitimate online sellers attempting to make a "quick buck" by reselling copyrighted works (often obtained from unknown or suspicious sources), and encourage buyers only to use known, verified sites and sellers to make purchases.
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Ask Before You Act: Clip Art

Vector-based graphics, or “clip art,” seems to be ubiquitous on the Internet.  Some users mistakenly believe that most or all clip art they see online is in the “public domain” and can be freely copied and used.  And some web sites perpetuate that belief by repackaging and selling clip art on CDs or other media for cut-rate prices, touting the “convenience” of having a wide variety of clip art images compiled (sometimes by theme) on a single source.

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Federal Circuit Takes Spree out of Forum Shopping

“Patent reform” is one of the hottest topics in intellectual property today.  Many industries and trade associations have been advocating key revisions to the U.S. Patent Act for the past five to ten years.  The last substantial revisions occurred in 1952.  Thus, many argue, we are operating a “digital economy” with an “industrial” patent law.   More...

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No Piracy Safe Haven on iOffer and Amazon

About two years ago, SIIA developed the first eBay auction enforcement program in the software industry.  Later, the program was expanded to include other content.  SIIA staff monitors eBay for infringing goods, and also receives reports from member companies and eBay buyers.  Many dozens of illegal sellers have been sued and paid thousands of dollars in damages (and penalty).  Some knew full well what they were doing and paid a substantial penalty – included jail time in some cases, bankruptcy in others.  Other sellers simply thought they had stumbled upon an easy way to make a quick buck, and did not sufficiently investigate the source of the goods they sold.  Unfortunately, copyright infringement is a strict liability offense (no intent needed) so even the simply careless sellers are held legally responsible.

The greatest indication of SIIA’s auction enforcement success is that pirate sellers have now begun to migrate to other auction sites and similar consumer sites, such as iOffer, Amazon, and Craigslist.  That is not to say that piracy has been eliminated from eBay; it has not.  But while eBay once stood out as the most obvious forum to obtain pirated software and other illegal goods, its competitors now pose a similar threat to consumers and copyright owners.  

Thus, SIIA and its members have begun targeting some of the other auction sites for “clean up.”  The first infringement suits against sellers on Amazon and iOffer were filed last week.  iOffer has offered its cooperation, understanding that infringing goods harms the reputation of its site and undermines consumer confidence.  Soon, lawsuits will likely follow on Craigslist and similar services.

The upshot is that consumers need to be careful what they are buying not only on eBay, but all similar sites.  Many of the sellers are either intentionally selling counterfeit goods, or “drop shipping” the product, i.e. ordering shipment directly from a foreign country such as China and never inspecting the goods.  Read the product listing closely.  Compare the price to “off the shelf” items in retail stores or other trusted sources, such as the software publisher itself.  If an online store is listing a work at a price that seems to good to be true, it probably is.  And if you receive a product that turns out to be counterfeit, contact the software publisher or SIIA.  We probably cannot get your money back, but we can help stop the infringer from harming other consumers.
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