Texas Jury Finds that Eolas Technologies Does Not Own the World Wide Web
Eolas Patent, Fig. 2
On February 8, 2012, an eight-member federal jury, comprised of laypersons from the Eastern District of Texas, invalidated two internet patents. In the suit filed by co-plaintiffs Eolas Technologies (“Eolas”) and the University of California (“UC”), the plaintiffs alleged that co-defendants, including some of the world’s largest internet-based companies, infringed the two patents in question. This decision has many parties that operate over internet-based technologies and public-domain advocates breathing a sigh of relief. The invalidation of the two patents mitigates potential future liability of infringement for parties that operate interactive websites.
Eolas, which biologist and company founder Michael Doyle named after the Gaelic term for knowledge, is a patent holding and licensing company that has successfully obtained royalty payments from large parties operating over the internet, including Microsoft in a famous 2007 case (for an undisclosed settlement amount reported to be in excess of $100 M USD). In recent years, Eolas relocated its headquarters from Chicago to the small town of Tyler, Texas, which houses the federal courthouse where many patent infringement cases are tried. Many plaintiffs choose the Eastern District of Texas for patent infringement cases because patent holders believe that the jury pool found in and around Tyler is extremely patentee friendly. Because of these actions, many commentators and parties participating in internet-based business transactions have characterized Eolas as a “Patent Troll.” (more…)
Europe Paves the way for Enhanced Online Privacy Protection
Source: Wikipedia
Last month, the European Commission proposed a new directive to enhance Internet privacy rights by regulating the access, collection, and use of personal data online. The proposed regulation would require Internet-based companies to obtain consumers’ express consent before using their personal data, and would also require those companies to delete user data upon request. The new directive would protect information ranging from e-mail and IP addresses to bank records and posts on social networking sites.
Notably, the proposed directive will not exempt American-based companies doing business in the European Union. Rather, the new regulation would require companies that offer services to EU citizens to provide the same protections for personal data handled outside the EU. This could be a potential blow – or at least an administrative hurdle – for global companies like Facebook, which has already been subject to multiple lawsuits involving users’ privacy rights in the United States.
While U.S. legislators may eventually follow the EU’s lead and enact statutes to broaden the right to online privacy, the United States has historically lagged behind Europe when it comes to privacy protection. In fact, the EU Charter of Fundamental Rights expressly guarantees the right to “protection of personal data.” Still, if the new EU regulation passes parliament this year, American Internet giants like Amazon and Facebook may have to revise their privacy policies for European Union consumers. This should at least prompt Congress to consider whether American Internet users deserve the same protections.
Twitter to Begin Balancing Free Expression with Legal Compliance
Source: http://flavorwire.com/253808/
On January 26, Twitter announced that it will remove Tweets on a country-by-country basis. Recognizing that freedom of expression is a “human right,” Twitter also acknowledged the “responsibilities” and “limits” that accompany such a right, especially in countries such as France or Germany, where pro-Nazi content is banned by law. Previously, Twitter could only implement global bans – no matter where the Tweet was posted, no one in the world could see the Tweet if it was taken down. Now, only persons from the originating country will be blocked, while the rest of the world can still see an offending Tweet. This country-by-country policy would help Twitter comply with laws that vary by country. The New York Times observed that the majority of Twitter’s 100 million users live overseas, and that Twitter was confronting the complexities of being both a free speech tool and commercial venture.
Unsurprisingly, the revised policy has sparked considerable controversy, resulting in an immediate “Twitter Blackout” on January 28. But others have remarked that Twitter is balancing the values behind free speech with necessary compliance with foreign and local laws. One commentator remarked how Twitter was the only company to fight the United States government over the Wikileaks case, and Twitter informed users when it lost. The policy has also been praised for its transparency, as users are notified when infringing Tweets are removed, and Twitter will post updates relating to notices on the “Chilling Effects” website, http://chillingeffects.org/twitter. (more…)
Supreme Court Upholds Fourth Amendment Rights In GPS Tracking Case
On Monday, the Supreme Court released its highly anticipated decision in the Fourth Amendment case Unites States v. Jones. The decision, unanimous in favor of respondent Jones, upheld the D.C. Circuit’s reversal of his drug-related convictions.
Jones came under suspicion of trafficking in narcotics in 2004. He was made a target of an investigation that included attaching a GPS tracking device to the car he frequently used. As implemented by law enforcement, the use of this tracking device fell outside the scope of any warrant police had obtained. The device was used to track the vehicle’s location for 28 days and collected more than 2,000 pages of data.
The Supreme Court agreed with the D.C. Circuit that this investigative behavior, outside the scope of a search warrant, was a violation of Jones’ Fourth Amendment right to be secure in his effects against unreasonable searches. The majority position, written by Justice Antonin Scalia, stated that the Court had “no doubt that such a physical intrusion would have been considered a ‘search’ within the meaning of the Fourth Amendment when it was adopted,” citing to, among other authorities, an English case from 1765. (more…)
Second Chance for Blogger Rights
In December, the U.S. District Court for the District of Oregon declined blogger Crystal Cox the protection of an Oregon reporter shield law and First Amendment case law, holding that both applied only to institutional media. See Obsidian Finance Group v. Cox, 2011 WL 5999334, CV-11-57-HZ (D. Or. Nov. 30, 2011). Now she might get a second chance to challenge the defamation claim against her. Cox filed a motion for a new trial Jan. 4, this time with the aid of two attorneys, one of them First Amendment scholar Eugene Volokh – a stark contrast to her previous pro se representation.
The Seattle Weekly provides a concise background of the case, but the gist is that Cox was sued for defamation by investment firm Obsidian Finance Group after writing several blog posts that were critical of the firm and its co-founder. Allegations regarding all but one post were dismissed. Cox admitted that the final post at issue was factual in nature, declining her ability to argue it was protected opinion. But she refused to name the source of the information, claiming Oregon’s Shield Law, Or. Rev. Stat. §44.510 et seq., offered her protection. Cox further asserted that the plaintiff failed to prove negligence or actual malice under the Gertz standard for defamation. See Obsidian Finance, 2011 WL 5999334 at *5 (citing Gertz v. Robert Welch, Inc., 418 U.S. 323, 347 (1974)). While Cox claimed to be an investigative journalist, U.S. District Judge Marco A. Hernandez found her not to be a “journalist” within the parameters of the statute, declining to offer her its protection. He also deemed that Gertz, which requires a showing of negligence when a private speaker is defamed, only applied to journalists, not bloggers. Without these defenses, a jury imposed a $2.5 million verdict against her. (more…)
Isolated Transcription Errors and Tax Preparation Software
Last September, the LTA blog discussed a line of Tax Court cases in which taxpayers unsuccessfully attempted to defend themselves from I.R.S. penalties by arguing that their reliance on tax preparation software amounted to reasonable cause and good faith. After this line of consistent taxpayer defeats, the Tax Court recently ruled in favor of a taxpayer who used tax preparation software to self-prepare his tax return and mistakenly omitted a large amount of trust fund income from his taxable income. See Olsen v. Commissioner. T.C. Summ. Op. 2011-131. While Olsen is notable because a taxpayer who relied on a tax return preparation program was able to assert a successful defense against I.R.S. penalties, it is especially interesting because the successful taxpayer argument in this case was more nuanced than those in previous cases.
Generally, when a taxpayer substantially understates his tax liability by more than $5,000, the I.R.S. asserts a substantial omission penalty against the taxpayer. I.R.C. §6662(b)(2), I.R.C. §6662(d). When faced with this substantial omission penalty, a taxpayer may argue that he qualifies for an exception to the penalty because he had a reasonable cause for the understatement and he acted with good faith. I.R.C. §6664(c). In determining whether a taxpayer acted with reasonable cause and good faith, a court will look at all the pertinent facts and circumstances. Treas. Reg. § 1.6664-1(b)(1).
In the past, taxpayers who relied on software programs to help them prepare their tax returns had a hard time proving reasonable cause and good faith and the Tax Court upheld the penalty, reasoning that tax return preparation software is only as good as the information a taxpayer puts into it. See e.g. Bunney v. Commissioner, 114 T.C. 259, 267 (2000), Lam v. Commissioner, T.C. Memo 2010-82, Anyika v. Commissioner, T.C. Memo 2011-69.
Carrier IQ Litigation: Does Data Gathering on Phones violate Federal Wiretapping Laws?
Recently, Carrier IQ has come under scrutiny for the vast amounts of data it gathers from cell phone users. A cell phone analytics company, Carrier IQ claims it’s software is installed on over 141 million devices. Apparently, the software is mostly on phones from AT&T, Sprint, and T-Mobile. This software has the ability to gather vast amounts of data from users, including logging keystrokes, user location, and telephone calls. For example, the software can track what websites a person visits, as well as the usernames and passwords used on those sites. Since this information is tracked directly from the phone or mobile device, it does not matter if the device is used over wi-fi networks or cellular networks, or if the website itself is encrypted. The potential for invasion of privacy is enormous.
Carrier IQ has responded, saying “While we look at many aspects of a device’s performance, we are counting and summarizing performance, not recording keystrokes or providing tracking tools.” (more…)
LTA Journal Publishes Fall 2011 Issue
The University of Washington School of Law on Monday published the Fall 2011 issue of the Washington Journal of Law, Technology & Arts, the nation’s first student-run electronic law journal focusing on technology, commerce, and artistic innovation. The Washington Journal of Law, Technology & Arts publishes concise legal analysis aimed at practicing attorneys on a quarterly basis. This quarter’s edition includes four articles by current students of the Law School and two articles authored by external contributors.
This issue’s lead article, “Ninth Circuit Unmasks Anonymous Internet Users and Lowers the Bar for Disclosure of Online Speakers,” is written by Articles Editor Mallory Allen. The article surveys the prevalent online defamation cases, summarizing the three primary judicial tests applied by state courts in determining whether a plaintiff may compel disclosure of an online commentator. The article posits that the federal circuit courts likely will adopt the reasoning set forth in the July 2010 Ninth Circuit decision In re Anonymous Online Speakers. (more…)
Got Confusion? “Chikin” v. “Kale” and Trademark Protection for Parodies in the Form of Products
Perhaps you have seen the TV commercials for fast-food restaurant chain Chick-fil-A during Saturday college football games: apparently semi-illiterate cows unveil banners urging consumers to “Eat Mor Chikin”[®]. A Vermont artist’s spoof of the restaurant’s trademarked phrase instructs people to munch on more of a leafier substance—kale. Bo Muller-Moore has printed the phrase “Eat More Kale” on merchandise such as apparel and bumper stickers (which have found their way onto Washington State cars), reportedly since 2000. He claims the phrase is meant to promote local agriculture (kale is a type of cabbage). His recent attempt to register “Eat More Kale” with the United States Patent & Trademark Office (USPTO), however, irked Georgia-based Chick-fil-A, which sent him a cease-and-desist letter claiming the marks are confusingly similar, according to press accounts.
Chick-fil-A appears to have an aggressive trademark-enforcement strategy. The letter reportedly alludes to the company’s many successful efforts to rebuff cooptation of the phrase (evidenced by the company’s activity before the Trademark Trial & Appeal Board (TTAB)). Muller-Moore apparently has enlisted the assistance of an IP professor to resist Chick-fil-A’s pressure to cease use of the similar mark. But is the law on Muller-Moore’s side? His case raises two interesting questions: (1) whether Muller-Moore can register the mark, and (2) whether Chick-fil-A can prevent him from using the phrase in commerce on products. Much of the resulting legal analysis probably turns on the likelihood that consumers would confuse the source of goods bearing the respective phrases. This kale conundrum also implicates the broader issue of parodies on products vis-à-vis trademark law. (more…)
The Supreme Court Will Revisit the Boundaries of Patent Eligibility
For the second time in less than two years, the Supreme Court will decide on the patent eligibility of method claims. In June of this year, the Court granted Mayo’s petition for certiorari in Prometheus Laboratories, Inc. v. Mayo Collaborative Services. Oral arguments before the Court are scheduled for December 7, 2011. The case involves the patent eligibility of personalized medicine (PM) technologies. PM refers to the customization of health care for an individual patient. PM can take into account a patient’s genetics and other individualized information to optimize therapeutic and preventive care in accordance with the patient’s specific biology and medical conditions. Examples of PM include genetic screening, engineering of a drug’s molecular structure, or dosage as a function of patient biomarkers. Given the significant current and future potential benefits of PM, as well as the large capital requirements for medical research, the Court’s ultimate holding will have far-reaching consequences.
The case involves method claims in two issued patents: U.S. Patent No. 6,355,623 and U.S. Patent No. 6,680,302. Prometheus holds exclusive licenses for both patents. The patents cover methods for determining optimal dosage, individualized to a particular patient, of a drug used to treat stomach disease. Claim 1 in the ‘623 patent recites a method for optimizing therapeutic efficacy for treatment comprising (a) administering a drug to a subject and (b) determining levels of metabolites present in the subject. The determined levels of metabolites correlate with the drug’s toxicity to the subject. The claim further recites, using a wherein clause, to either increase or decrease the amount of administered drug as a function of the determined levels of metabolites. Other claims in the patent cover similar, albeit different, methods. (more…)
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