How much copyright infringement have you done today?

riaa

A former colleague and a friend of mine, John Tehranina has written a nice article on the absurdities of some of the copyright laws.

You can read the whole article here, but the gist is that we have become an “Infringement Nation.” In a typical day, just by engaging in average activities, unwittingly, we infringe copyrights of others.

By following a typical day in a law professor’s life, he shows that even without using P2P, or downloading a single mp3, he has committed 83 acts of distinct infringement.

By the end of the day, John has infringed the copyrights of twenty emails, three legal articles, an architectural rendering, a poem, five photographs, an animated character, a musical composition, a painting, and fifty notes and drawings. All told, he has committed at least eighty-three acts of infringement and faces liability in the amount of $12.45 million.

… barring last minute salvation from the notoriously ambiguous fair
use defense, he would be liable for a mind-boggling $4.544 billion in potential damages each year. And, surprisingly, he has not even committed a single act of infringement through P2P file sharing.

His conclusions are:

Such an outcome flies in the face of our basic sense of justice. Indeed, one must either irrationally conclude that John is a criminal infringer — a veritable grand larcenist — or blithely surmise that copyright law must not mean what it appears to say. Something is clearly amiss. Moreover, the troublesome gap between copyright law and norms has grown only wider in recent years.

Of course, his examples do not take in to account the established boundaries set by the “fair use” law and “implied license” laws, but the point is well taken.

One could argue that this is not really specific to copyright law, by driving over 65 MPH on the highway, John (John, the hypothetical law professor, not John Tehranian) probably breaks the law everyday.

I would go even further that by using his internet explorer, and by visiting a website and possibly joining the Facebok social network, he is probably infringing on several patents too.

Is that a reflection on how IP laws generally are and there is no inherent way to write them so that the line of infringement and non-infringement is clear?

I don’t think so, I think one generally relies on the laws and the judicially created exceptions to the laws to conduct one’s daily lives (in the case of copyright law - the doctrine of fair use) and interpret the scope and the boundaries established by the law. The exceptions to the written laws are, very often, created precisely to address the issues of the kind John points out.

I do not think that he infringed a copyright on emails sent to him by others by quoting the emails back to them. It would a be fair use and there may also be an implied license granted by the e-mail authors to John to use that email. One can analyze each one of his examples and I believe that most of them will fall within the fair-use and/or implied license and/or education purposes license realm.

But I can not agree with him more, in terms of the need for clarity in the law, and more importantly in the perception of the scope of the applicable law.

Via Slashdot .



Amazon One Click Patent is alive and clicking away - the saga continues.

amazon_one_clickWhen the patent office rejected all the claims of Amazon’s One Click Patent last month, the blogosphere rejoiced. But I knew better.

As an IP attorney, I know that when the patent office rejects a claim, that is just the starting point. You start from what the Patent Office rejected, review the reasons for the rejections and come up with creative way to rewrite your claims to get around the issues raised by the examiner. In fact, in my view, if the examiner doesn’t reject your claims, then your application was deficient, because it means that your claims weren’t broad enough.

In this case, the issues were even simpler. During the re-examination procedure, the patent office reviewed a lot of references and many old systems (referred to as Prior art) to find if the Amazon’s one-click was novel or not. The patent office found that some older systems had “one click” type features, and hence the Amazon claims, as written, were invalid.

However, when the Amazon’s claims for the One Click Patent were rejected, the patent examiner specifically said that if Amazon clarified the language of the claims, and very slightly narrowed them, the claims will be allowable and the patent will be reissued. And it seems Amazon did exactly that.

Here is the relevant part of the from the examiner’s comments (10/9/07):

uspto_amazon_one_click

And in response, Amazon modified the claims to (11/15/07):

new_claim_amazon

Which essentially says that:

  • your system needs to have a shopping cart module; and

  • a one click module; and

  • if somebody pushes the one-click buy button,

  • the system has to complete the transaction

  • without the use of the shopping cart module.

Before this change, the claim was a bit fuzzy. The examiner, appropriately, left an “out” by saying that a new search will need to be performed (11/15/07).

further search amazon_patent

So the saga continues; the patent is not dead - it is alive and clicking away.

Generally at this point, the patent office will typically grant the patent (or as in this case, finalize the re-examination proceedings) but this is not a typical patent. Even though I understand the reasons why the patent office allowed this patent, I equally understand the outrage this patent has generated.

What happens next? The reexamination request will continue within the patent office and at some point the patent office may issue another office action accepting the changes and reissuing the patent with a new number (typically starting with REXXXX) or the office may find additional references that have both shopping cart and one click systems to show that the patent is not-novel or it is obvious and may reject the claims of the patent. In that case, Amazon can appeal to the Board of Patent Appeals and then to the Court of Appeals for Fed. Cir.

Can Amazon sue other website operators in the mean time? Absolutely yes. Once the patent goes through the reexamination process, it may lose some of its breadth but whatever remains is stronger and harder to attack. And of course, it is still a valid patent while it is going through this re-examination procedures.

After reviewing some of the documents, I am not as puzzled as to how this patent was granted. Even after extensive search and even a bounty of $40k+, there is nothing out there which shows a system where you can buy something with one click AND buy something using a shopping cart within the same system (the AND part is important).

Recently the Supreme Court came up with a broad definition of when an invention is “obvious” and not patentable. I expected the patent office to reject the One Click patent based on the new definition of obviousness, perhaps in the next office action!

I recently wrote about the patent auctions that raised $10M+. A couple of the patents sold of $1M+. So despite these esoteric patent office proceedings, the patents continue to have a real value, some times it comes from the underlying technology, sometimes it comes from being able to prevent your competitor from doing something, and other times the patents provide a perception of strength to others.

Happy thanksgiving. Let’s all just click away and get our Christmas shopping done.



Now RIAA wants Universities to get campus wide Napster subscription or “lose all federal financial aid”

ImageWhy am I angry? The new Higher Education Bill (HEA §494) requires that the Universities stop all P2P downloads that RIAA doesn’t like AND buy Napster or Rhapsody subscriptions for every student on the campus or lose all federal financial aid.

I am an IP attorney; I understand copyright laws way too well. I know what RIAA is trying to do here; these tactics are underhanded and really infuriate me.

RIAA has been phenomenally successfully in using the copyright laws to prosecute selected students at various Universities - sort of like a sniper attack on a select few. Now they want to go nuclear - they want to cut off federal financial aid to the University, if the University doesn’t effectively police the P2P downloads.

The massive Higher Education bill is about 750 pages, (or you can view just the relevant Sections 487 and 494 here, if you prefer). The Section 494, titled “CAMPUS-BASED DIGITAL THEFT PREVENTION”, in its simplified version, says the following.

Sec. 494 Each eligible institution participating in the federal aid program shall:

  • provide annual disclosure/warnings to the students applying for or receiving financial aid, stating that:
    • P2P file sharing may subject them to civil and criminal liability;
    • summary of penalty for violation of copyright laws;
    • University’s policy of disciplinary action for using university’s IT for unauthorized downloads; and
    • the actions that the University takes to detect such activities;
  • develop plans for offering alternative to illegal downloading or P2P distribution; and
  • develop plans to deter illegal downloading.

copyright_policeEssentially, this means that the Universities will have to become the Copyright cops. Additionally, the Universities will have no choice but to provide some sort of subscription service for music and videos to ALL students. What are the options that are out there? Campus wide Napster or Rhapsody subscription? Either that, or risk losing the financial aid.

What really bothers me is that the copyright holders (essentially RIAA and MPAA) are private parties - why are they being given these extraordinary powers?

Next, MPAA would go to the federal government and say “there are a lot of bootleg copies of movies being sold in downtown LA. In the Highway funding bill, please add an amendment - City of Los Angeles has to provide an alternative to these cheap DVDs, and No more highway funding for LA until they fix the DVD bootlegging problem.” That’s exactly what RIAA and MPAA are doing to the Universities.

This is like Visa going to the University and saying that “a lot of students are not paying their bills on time. Mr. Dean of the University, you have to make sure that nobody is late in their payment, and if they can’t pay on time, you should make the minimum payment on their behalf. And if you don’t, we will take away all financial aid for the University!” How absurd is that!

William Patry, senior Copyright Counsel to Google and the author of highly regarded 7 volume treatises on copyright has this to say:

With these efforts to deprive universities of federal funds, it is difficult to conclude there is a low beyond which content owners will not go. What’s next, an amendment to Sarbanes Oxley that requires the CEO of companies to certify no employee infringes copyright? Or, how about a requirement that before we can receive U.S. mail, each of us has to certify to the Post Office that we don’t infringe copyright?…The concept that the federal government will use coercive force through unrelated laws to enforce the rights of private individuals more than capable of enforcing their own rights is unprecedented, unnecessary, and unprincipled.

Ars Technica has been following this closely. RIAA tried to pull something similar in July when it black listed 25 Universities and colleges and sponsored an amendment to the Education bill that would keep all education funds hostage until the copyright violations were corrected. That amendment died a quiet death.

The Association of American Universities (AAU) has let its displeasure be known. Last week, in a letter to Rep. Miller, AAU urged the legislators to remove the P2P provision (Sec. 494) in the Higher Education bill.

The proposal would mandate a completely inappropriate role for the Secretary of Education to single out individual institutions based on information under the control of the entertainment industry, force institutions to seek an unachievable goal of preventing illegal P2P file sharing, and risk the loss of student aid for countless students innocent of any illegal file sharing activity.

ImageI have no issues with RIAA and MPAA aggressively enforcing their rights, but don’t jeopardize financial aid to the University or to a student who has personally done nothing wrong, just because it is convenient for RIAA and MPAA to do so.

The bill is being cosponsored by Rep. George Miller (D-CA) email George.Miller@mail.house.gov, and Rep. Ruben Hinojosa (D-TX) ( he prefers not to provide his email address, if you want to fill out the form to send online message click here; select Compose own letter at the bottom). His phone number is (202) 225-2531.



Patent Auction - $2M bid fails to meet reserve, several sold for $1M+

patent

I have written about the value of a patent portfolio to a company before (see here and here); some of the value comes from the inherent technology, some of it comes from being able to block your competitor from doing something, and at times the value of the patent comes from the perceived advantage it gives the company. All of them are valid reasons to acquire and build a decent patent portfolio.

Lately, a lot of people have cautioned that in their opinion, patents are not worth as much. Some recent changes in the Patent Law have provided additional reasons for people to argue that the inherent value of the patent is going down.

I do not agree with that assertion; at least not completely. There may be some valuation variance that will happen because of the recent changes in the patent law, but going forward, the patents will continue to provide strong offensive and defensive tools to succeed in the market place.

ocean_tomo

An easiest and clearest way to establish the real value of something is to examine some recent transactions, especially when the transactions are “clean” and not encumbered by fuzzy relationships between the parties, and the agreements are not entered into under duress of a lawsuit, and are not undertaken for tax mitigation reasons. An open auction provides such a valuation tool, and is a superb guide to establish the real value of an asset.

There is no Ebay for patents, but there are several companies that specialize in the IP brokerage business. I have dealt with most of them in one capacity of other.

Yesterday, Ocean Tomo, one of the major IP asset brokers, held an open auction in Chicago. There were about 400 patents and applications spread out amongst roughly 70 lots.

Highlights:

  • One of the lots, which has 3 patents and several other pending applications related to GPS location based system and logistics, got a bid of $2M+ but failed to sell because it did not meet the reserve price. The auctioneer’s estimate was about $5M.
  • Online ticketing system patent went for $1.00M (estimate was $2.2M)
  • Digital Media System and management patent went for $1.75M
  • Computer interface device patent went for $750k.
  • Several others sold for $500k+
  • About 50% of the patents sold, which is typical.

Generally, after the auction is over, and for patents that did not meet the reserve price, there is some negotiation between the patent owners and the interested parties; so the total revenue realized from this patent auction will exceed the previous auction amount of $10M.

While the overall perceived value of patents might see some reduction because of the change in the patent law, there is still a healthy demand for innovative technologies and the competitive advantages they can provide in the marketplace.



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