Monthly Archives: November 2012

Statutory Damage Awards in High Profile Song-Sharing Cases

Posted on November 16, 2012 by Nazli Saka under The Bolt

The individual defendants in two high profile peer to peer song sharing cases, Capitol v. Thomas-Rasset and Sony v. Tenenbaum, recently faced major defeats in challenges over high statutory damages awarded against them. This raises questions as to the roles of judges and juries in determining the fairness and proportionality of statutory damages in copyright infringement cases. These litigation sagas have been closely watched in copyright circles, and it is important to trace their development throughout the years to appreciate the importance of the current decisions.

Let’s first start with Capitol v. Thomas. Jammie Thomas-Rasset, a single mom of four children from Minnesota, downloaded and shared 24 songs through the now-defunct Kazaa. In 2006, six major recording companies filed a complaint against Thomas alleging copyright infringement. In 2007, a jury found Thomas guilty of willful infringement, and awarded $222,000 in damages ($9,250 per song). Thomas then filed for and was granted a new trial. After a second trial in 2009, a jury again found Thomas guilty of willful infringement and awarded statutory damages of $1,920,000 ($80,000 per song).

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John Wiley and Sons v. Kirtsaeng: Textbooks, Copyright, and Universal Exhaustion

Posted on November 12, 2012 by Damion Jurrens under The Bolt

On the eve of the arrival of Superstorm Sandy, the Supreme Court of the United States heard oral arguments in John Wiley and Sons v. Kirtsaeng, a case involving the international reach of the First Sale Doctrine.  The impending storm provided a fittingly overwrought metaphor for the Court’s attempt to interpret the Copyright Act as it pertains to so-called “gray-market” works published outside the U.S. and imported for sale.  Though similar issues were tackled in the 2010 Omega S.A. v. Costco Wholesale Corp. case, the Court’s 4-4 decision left the gray market in an unsatisfying state of suspended jurisprudence.  With all nine justices weighing in on Kirtsaeng, the Court has an opportunity to establish precedent in a case that is sure to affect many U.S. retailers and their customers.

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The Long Road to a Supranational Patent System in the European Union

Posted on November 6, 2012 by Nathalie David under The Bolt

On June 29, 2012, Mr. Herman Van Rompuy, the President of the European Council, announced that twenty-five of the twenty-seven Member States of the European Union (EU) finally reached an agreement concerning the creation of a unitary patent system. Anticipated for more than thirty years, the announcement legitimately raised enthusiasm on the part of European authorities, inventors and entrepreneurs. Unfortunately, hope did not last. The day before the European Parliament was to debate and vote on the proposed regulations, the European Council removed three key articles from the draft agreement. In protest, the Parliament cancelled the debating and voting sessions. Today questions remain whether the agreement will be reviewed and adopted any time soon, or if national egos, political pressures, the interests of lobby groups and procedural complexities will keep impeding EU competitiveness.

The EU has no unified patent system. In order to secure EU-wide protection, an inventor must obtain a patent from the European Patent Office (EPO). Then, he must seek validation of his patent in each Member State. Most Member States require the patent to be translated in their official language(s). This generates large translation costs which increase the cost of patenting.  According to the Danish Prime Minister, it can cost up to €20,000 to obtain coverage in just thirteen Member States. Approximately €14,000 of that total comes from translation costs alone. The absence of a unified patent system generates administrative complexities but also legal uncertainties, because the courts of each Member State can rule differently on the same issue within the same patent. This situation does not only impede the competitiveness of individual European companies (especially small- and medium-sized enterprises), but it also hampers EU competitiveness and economic growth in general.

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The Curious Case of Design Patents

Posted on November 6, 2012 by Nazli Saka under The Bolt

Design patents have not received much press until recently. However, the smartphone industry and fashion houses are increasingly turning to patent law to protect their designs. Recent disputes between Apple and Samsung as well as Lululemon and Calvin Klein illustrate an increased reliance on design patents for market domination. Will this become a trend, encouraging design patent applications and enforcement? How could design patent protection help or harm innovation in the future, both for large and small companies?

35 U.S.C. § 171 provides that “whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title.” Ornamentality is determined by the aesthetic, eye-pleasing features of the article not dictated by functional considerations. See Trimble Products, Inc. v. W. T. Grant Co. The purpose behind design patent protection is to advance the decorative arts. See Forestek Plating & Mfg. Co. v. Knapp-Monarch Co. Utility patents afford protection to useful processes and products, but design patents are mainly concerned with the visual characteristics of an article. Holders of utility patents enjoy a 20-year monopoly, whereas design patent holders only have a 14-year monopoly.

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The Uncertain Future of Divided Patent Infringement

Posted on November 1, 2012 by Michael Liu Su under The Bolt

The law of patent infringement is governed by 35 U.S.C. § 271. In particular, § 271(a) describes what constitutes infringement:

Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. § 271(a).

On the other hand, § 271(b) governs liability when an entity induces another to infringe a patent:

Whoever actively induces infringement of a patent shall be liable as an infringer. § 271(b).

According to the current joint infringement rule under BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007), courts construe the term “whoever” in § 271(a) as encompassing multiple entities, but only when one of them exerts “direction or control” over the others, so they can be viewed as one collective single entity. This is the so-called “single-entity rule.”

However, this rule poses a problem for innovative technologies, such as cloud computing and personalized medicine, which necessarily require collaborative effort by multiple parties for their implementation. For example, a personalized diagnostic technique may require a biotech company that performs the analysis, a pharmaceutical company that manufactures the drug, and a physician that collects data and provides treatment. Under such circumstances, it is often necessary to include all these steps performed by multiple parties in a patent claim to make it patentable. However, under the single-entity rule, a patent holder may be left remediless when multiple entities collusively perform all the steps in a claim, but no single entity performs all of the steps or exerts direction or control over the other entities.

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