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.

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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In July, the terms of the recent agreement on royalty payments reached between performers and record labels, on the one hand, and "pureplay" webcasters, on the other hand, were published in the Federal Register (the publication in which federal regulations are documented).  This marks the beginning of a 30-day period in which webcasters can opt-in to participate in this deal, as opposed to pay the rates for webcasters established by the Copyright Royalty Board.  This news drives home the fact that a clear regime is being established to compensate labels and artists for playing their recordings on digital services, while there is no such payment regime for playing the recordings on broadcast radio.  There is currently proposed legislation, called the Performance Rights Act, to change this by requiring broadcasters to pay a royalty for playing records.  Webcasters, labels and a number of artist representative groups (like SoundExchange, which represents labels and performers) are for it.  Radio broadcasters are against it.  Looking at the blogs out there, a lot of people appear to think this is yet another money grab by the labels that will put small radio stations out of business.

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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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I’d like you to take a trip back with me to the early 1990’s -- a time when the high tech industry was exploding with new and innovative hardware and software in the form of business applications, games, and much more.  Unfortunately, with these new innovations came rampant copyright violations.  Adults and kids were beginning to copy software, almost without thinking about it.  Some were doing so knowingly.  While others were simply not aware that their actions were illegal.

As any good trade association would do, SIIA (then known as SPA, the Software Publishers Association) jumped in and took immediate action.  We decided to embark on a broad education campaign to enlighten the public at large – particularly focusing on school kids.  Our message was simple – to teach kids the importance of copyright protection as a means for encouraging innovation and creativity and the dangers of software piracy.

The result of our efforts was the VERY popular video called “Don’t Copy That Floppy!”  

The video was a huge success in the schools in the 90’s.  Year after year, the video – along with the copyright lesson plans – were used by thousands of teachers across the country to educate their students to respect copyright and to not copy software illegally

Now, lets fast-forward to 2009.  Floppies are long gone.  SPA is now SIIA.  And people generally know much more about copyright -- thanks in large part to the likes of Napster, YouTube and John Doe lawsuits brought by the recording industry.

But, as they say, the more things change, the more they stay the same.  The high-tech industry continues to explode with new and innovative hardware and software in the form of business applications and games.  And, just like in the 90’s, if not more so, copyright violations continue to be rampant.  In fact, today it’s not just software that’s being pirated.  It’s music, movies and, of course, digital content (like newspaper and magazine articles, books, and test materials).

Even though floppies no longer exist and the video is very outdated, it continues to be as popular as ever.  You can find groups devoted to the video on facebook, discussion groups and various websites (where you can even buy your very own "DCTF thong!).  There are close to 100 versions of the video posted on YouTube. When you search for the video on Google you get tens of thousands of hits.  Perhaps, most importantly, despite being quite outdated, Don’t Copy That Floppy continues to be shown to students throughout the country.

Even now – 17 years after it was first launched --  the Don’t Copy That Floppy video is easily the most successful and most popular copyright educational video of all time.  If you don’t believe me just ask yourself – when was the last time someone actually copied a floppy. (insert laugh track here).

So, 17 years after we first released the original Don’t Copy That Floppy, after being swamped with requests, we have decided to make a sequel, aptly named Don’t Copy That Too (DCT2).  Even though the video won't be released until next month you can check out a preview of the new video.

As reported previously in this blog, late last year President Bush signed into law, S. 3325, “the Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008.”  The bill creates an IP Enforcement Coordinator (IPEC) within the Executive Office of the President.  The IPEC – which is often referred to as the “IP Czar” – is to be appointed by the President and confirmed by the Senate. 

Last week, Senate Judiciary Chairman Patrick Leahy, ranking member Arlen Specter, and Senators Evan Bayh, and George Voinovich – all whom were strong advocates for the PRO-IP bill – sent a letter to President Obama urging him to promptly nominate an IP enforcement coordinator.  Earlier this year the U.S. Chamber of Commerce had drafted a similar letter urging that the IP Czar be appointed within the first 100 days of the Obama Administration.

Late last year and early this year, as is typical in DC, there were rumors swirling about several potential candidates for the position. After two months of mostly silence, those winds seemed to have settled on just a few, with the apparent leading candidates being Victoria Espinel, former assistant trade representative for intellectual property at the office of the U.S. Trade Representative and law professor at George Mason School of Law in Virginia, and Shira Perlmutter, formerly head of the office of Policy and International Affairs at the U.S. Copyright Office and law professor at The Catholic University of America in Washington, D.C.

Under the PRO-IP Bill, whomever the new IPEC is will be tasked with drafting a joint strategic plan for combating infringement and counterfeiting, including cooperation with foreign government agencies.  Once the IPEC is confirmed the National Intellectual Property Law Enforcement Coordination Council (NIPLECC) would be abolished and replaced with another interagency advisory committee under the control of the IPEC.

Recent articles in Outdustry and CNET announced the pirating of iTunes gift cards in China.   Apparently, hackers in China have figured out a way to generate keycode numbers for iTunes gift cards and then sell counterfeit $200 iTunes gift cards using these numbers for less than $3.  People can then buy these cards and use them to buy songs etc. on iTunes just as anyone else would do with a legitimate iTunes gift card.

The obvious victim here is Apple, who's out the money that it would normally get from selling the card to a consumer.  Not only do they lose that revenue, but they also have to turn around and pay a royalty to whomever owns the rights to the downloaded songs. 

So why should you care about this?  Maybe you don't care if Apple loses a few million dollars to piracy.  Maybe you shouldn't.  That's a discussion for another day.

What you should care about is the "other" victim here -- perhaps, the "real" victim.  This is about the honest person who buys a legitimate iTunes gift card only to find out that their card is invalid because some pirate in China stole his or her keycode number and already used it on iTunes.

For those who think piracy is a victimless crime -- think again.  The victim here, as in most cases of piracy, are the millions of honest people who play by the rules and who buy legitimate software, movies and music.  It's these honest people who are suffering the consequences of piracy.  More...

On February 17th, in Associated Press v. All Headline News Corp., the U.S. District Court for the Southern District of New York denied defendants motion to dismiss several of AP’s claims, most significantly AP’s claim that defendant AHN was liable for “hot news” misappropriation and for violating the copyright management information protections provided under Section 1202 of the Digital Millennium Copyright Act (DMCA).  For those who have been living in a cave and are not familiar with the Associated Press (AP) -- it's an organization that --  through its employees, affiliates and subsidiaries --  engages in significant effort and expense to get access to news and to gather, report, package and transmit news stories throughout the world.  As stated in the court decision, All Headline News (AHN) scours the Internet for news stories and then either copies them or rewrites them for publication under the AHN banner.  Even though the stories are original AP content, AHN markets them as their own by, among other things, removing or altering the identification of the AP as author or copyright holder of the articles.  AP sued AHN for these activities and AHN moved to dismiss all the AP claims except the copyright infringement claim.  Although AHN prevailed in getting the trademark infringement and the Federal (but not state) unfair competition claims dismissed, the court refused to dismiss:  (1) AP’s claims of hot news misappropriation – holding that “[a] cause of action for misappropriation of hot news remains viable under New York law, and the Second Circuit has unambiguously held that it is not preempted by federal law;” and (2) AP’s claim that AHN violated Section 1202 of the DMCA by removing and/or altering copyright-management information – holding that there is no support for AHN’s position that this prohibition is limited to “the technological measures of automated systems” because no such requirement appears in the statute. More...

The President recently signed into law, S. 3325, “the Prioritizing Resources and Organization for Intellectual Property (PRO IP) Act of 2008.”  The bill had been passed bby the U.S. House by a suspension vote of 381-41.  (Those opposing included Reps. Boucher, Kucinich and Lofgren.  The vote was bipartisan, with Democrats voting 205-22 and Republicans voting 176-19.)  What was supposed to be a non-roll call vote on Saturday the 27th ended up being a roll call vote on Sunday, when a couple of members of Congress insisted on an up-and-down vote.  Being on the suspension calendar, S. 3325 needed a 2/3 vote to pass, and it did so easily.  Two days earlier the bill had passed by the Senate by voice vote. 

The final version of the bill would, among other things:More...

On May 13th, in Pearson Education v. Liao, the U.S. District Court for the Southern District of New York held defendants liable for copyright infringement for their sale of 166 copyrighted educational textbooks that were manufactured and purchased by defendants outside the United States and then resold by them in the United States. Defendants sold the foreign editions of books on Internet bookselling sites without plaintiffs' permission. The foreign editions were manufactured and intended for sale outside the United States by the plaintiff publishers (SIIA members Pearson and McGraw-Hill, joined by Cengage and John Wiley & Sons). Because of this, the foreign editions were substantially identical to the U.S. editions, but were produced using inferior ink, paper and binding material. Defendant argued that reselling of the books was permitted by the first sale defense in section 109 of the Copyright Act. The court disagreed, explaining that "the first sale doctrine does not necessarily protect persons who purchase copies of copyrighted works outside the United States and then import them in to the United States for resale." To hold otherwise "would vitiate section 602(a)" of the Copyright Act, which provides that "[i]mportation into the United States … of copies of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies…" Accordingly, the court concluded that the first sale defense does not allow resale in the United States of copies manufactured outside the United States and awarded plaintiffs $124,500 in statutory damages.

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