Vermont Takes A Leap: First State To Pass Law To Combat Patent Trolling

Patent trolls have been in the spotlight of national attention in the past year, as President Obama addressed the problem in his Fireside Hangout and a White House report attempted to quantify the impact of abusive litigation. Officially known as Patent Assertion Entities, or PAEs, these companies purchase patents and bring patent infringement claims as a business model. The Federal Trade Commission (FTC) has recently announced a proposal to obtain more data on approximately 25 PAEs in order to better understand their impact on innovation and the economy. Meanwhile, Vermont has become the first state to take matters into its own hands with a state law to combat patent trolls. While it is not clear whether Vermont has the legal authority to regulate patent activities, its innovative “threats action” approach may prove to be successful enough to be adopted more widely.

Background: National Efforts To Prevent Patent Trolling        

On September 16, 2011, President Obama signed into law the Leahy-Smith America Invents Act (AIA), a major amendment to the 1952 Patent Act that has governed patent law for nearly sixty years.  While the primary purpose of the AIA was to encourage innovation by modernizing the patent application and review process, several provisions in the Act were aimed at patent trolls. Following the AIA, additional measures to combat patent trolling have been introduced in Congress. Three of the most high profile proposals are: (1) the Saving High-tech Innovators from Egregious Legal Disputes (SHILED) Act “forces patent trolls to financial responsibility for frivolous lawsuits”; (2) the Patent Quality Improvement Act expands the AIA by allowing more businesses to be covered under the transitional program for business method patents; and (3) the End Anonymous Patent Act, which requires the owner of patents to register with the UPSTO. While these proposals are being debated in Congress, Vermont has become the first state in the nation to pass its own law to combat patent trolls.

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Internet Governance in the Age of Surveillance

If the Internet international archives will register 2013 as the year of Edward Snowden and the disclosure of National Security Agency (NSA) surveillance programs by the media, 2012 was all about the mobilization against a United Nations (U.N.) attempt to take over the Internet. This post recaps the legal and policy debate around the negotiation of the International Telecommunications Regulations (ITRs) by the World Conference on International Telecommunications 2012 (WCIT-12) and offers some prediction on the Internet Governance (IG) agenda of 2014.

International Telecommunication Union

Based in Geneva, Switzerland, the International Telecommunications Union (ITU) dates back to the first agreements on international telegraph interconnections in the mid-nineteenth century, making it the oldest body of the U.N. system. Its main functions today include allocation of global radio spectrum and satellite orbits, development of technical standards for networks and technologies interconnection, and improvement of access to telecommunications worldwide. These activities are primarily led by its broad membership, which encompasses 193 Member States and over 700 private-sector companies and academic institutions that engage in consensus-based negotiations at the technical Study Groups of its Radiocommunication, Standardization and Development Sectors.

The ITU legal framework encompasses four international treaty-level instruments: Constitution, Convention, Radio Regulations, and International Telecommunication Regulations. The Plenipotentiary Conference, the Council, the General Secretariat and other four world conferences are the top political bodies that ultimately supervise ITU’s organic structure. Each one of them holds specific mandates in determining ITU’s general policies, evaluating its global activities and eventually amending the treaties.

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The Copyright Alert System After Its Roll-Out: First (Non)Reactions

The Copyright Alert System (CAS) was rolled out in late February 2013. CAS constitutes the United States realization of the international concept of “graduated response programs:” frameworks for media owners to address alleged online copyright infringements with computer users through their Internet Service Providers (ISPs). Key features of CAS – and other graduated response programs – are the monitoring of peer-to-peer (P2P) file sharing systems followed by electronic notifications of supposed violations to the user of the computer as well as measures against her that increase in severity with every instance. CAS is a private “six strikes” program based on an agreement between major media corporations and ISPs setting up the so-called Center for Copyright Information (CCI). The consortium’s website describes CAS’ features and emphasizes its educational nature, noting especially that no mandatory termination is built into the agreement and that commercial accounts are not meant to be affected. The Electronic Frontier Foundation, EFF, launched a FAQ of their own when CAS was initiated, however, and pointed out that vast amounts of local businesses are small and reliant on residential-type online access so that in fact “CAS will chill open Wi-Fi.”

Now, two months after the introduction of CAS, how has public access to the Internet already been affected? Where did this scheme come from – and where is it going?

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BTLJ Spring Patent Reform Roundup

With spring in the air, it is time to take another look at current news in the world of patent troll litigation. By now full-fledged media darlings, patent infringement lawsuits filed by non-practicing entities are everywhere you turn, garnering not just upvotes on Hackernews, retweets on Twitter, but time in the halls of Congress and the White House.

USPTO Hosts Silicon Valley Round Table

Patent trolls, otherwise known as non-practicing entities (“NPEs”) or patent-assertion entities (“PAEs”), are often vilified in legal scholarship and, lately, in the mainstream media as well. Without the USPTO granting slews of software patents, however, there would be fewer patents for these non-practicing entities to assert. Some of the current hand wringing over the epic rise in patent litigation of late focuses, as a result, on the USPTO. Accordingly, many were delighted when, last November, the USPTO announced its new director for the soon-to-open Silicon Valley satellite office. Michelle Lee, formerly a lawyer at Google, had scribed publically about the need for patent reform and specifically called out trolls. Consequently, her hire prompted much rejoicing.

Following this heralded move, the USPTO announced a “software partnership” roundtable session in Silicon Valley—ground zero for software innovation. At the meeting, held on February 12, stakeholders shared thoughts on software patents. The audio, for those inclined, is available here, here, and here. Colleen Chien, author of many groundbreaking studies on PAEs, explored the possibility of utilizing heightened application of 35 U.S.C. § 112(f) to construe patents as functional. Professor Chien analyzed several arguably functional patents including U.S. 5,930,474, which GeoTag asserted against 435 defendants in 115 lawsuits. The scope of patents like GeoTag’s would likely be “limited to the technology the patentee actually designed and equivalents known at the time the patent issued” in litigation should 112(f) be so constrained. According to proponents, such a limitation could profoundly affect many patents currently asserted in troll litigation.  Horacio Gutierrez, Corporate Vice President and Deputy General Counsel at Microsoft, also presented some thoughts about potentially limiting § 112(f). He noted that more rigorous enforcement of § 112(f) is “one part of the solution.” However, according to Mr. Gutierrez, this solution would not address issues such as inadequate notice and excessive breadth.

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Bitcoin: FBI and FinCEN Weigh In

Bitcoin, an anonymous currency imagined by a mysterious individual with a secret identity, is on everybody’s mind. The cryptographic digital currency, operating through a decentralized peer-to-peer network, is both an opportunity for criminals and entrepreneurial early adopters as well as a challenge for regulators. Since inception, bitcoin has captured headlines, gone on a roller coaster valuation ride, suffered security breaches and hacking attempts and, more recently, garnered interest from institutional investors. Last year, a leaked FBI report provided a snapshot into the government’s concern that bitcoin could become cybercriminals’ choice currency. In a surprise move this spring, the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”) provided interpretive guidance on how federal financial regulations implicate virtual currencies. Where will the bitcoin market, or its regulation, be in a year from now? Nobody knows, and that’s what makes it so exciting.

Bitcoin Genesis

Bitcoin’s origins are shrouded in mystery. Four years and twenty-five weeks ago, an entity named Satoshi Nakamoto posted a paper abstract to the Cryptogarphy Mailing List. Bitcoin: A Peer-to-Peer Electronic Cash System conceived of a currency that could be “sent directly from one party to another without going through a financial institution.” Instead of using a trusted third party to facilitate electronic transactions, Satoshi’s payment system would be based on the power of cryptography. Fraud would simply become “computationally impractical.” Through a process known as “mining,” anybody with a CPU powerful enough could generate, or discover, new bitcoins. Unlike centralized currencies where a central bank controlled the monetary base, bitcoin’s decentralized system algorithmically defined the number of bitcoins generated per block such that more than 21 million bitcoins would ever exist. On January 3rd, 2009 at 18:15 UTC, Satoshi Nakamoto—transforming his theoretical system into reality—created the first (genesis) block of bitcoins. Continue reading

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Design Patents in the Modern World

A recent conference at Stanford Law brought together intellectual property scholars, representatives from USPTO and WIPO, litigators, and in-house counsel for a rousing discussion of emerging issues in design patents.

EamesIn contrast to an ordinary utility patent, a design patent is granted to an inventor of a “new, original, and ornamental” design for an article of manufacture, and lasts for 14 years rather than 20.  35 U.S.C. 171, 173. A design patent contains only a single claim, and photographs or drawings that follow certain drafting conventions and PTO rules. 37 CFR 1.84, 37 CFR 1.152.

Recent cases affirm the “ordinary observer” standard – but application in context of prior art is inconsistent

Design patents began to get increasing attention in 2008, when the Federal Circuit issued a game-changing decision in Egyptian Goddess v. Swisa, 435 F.3d 665 (Fed. Cir. 2008), holding that the “ordinary observer” test is the sole test for design patent infringement. The court looked back to the standard first stated in Gorham Mfg. Co. v. White, 81 U.S. 511 (1871), but clarified that the test is to be conducted in the context of the prior art. The ruling did away with the “point of novelty” test, freed district courts from issuing detailed verbal descriptions of the design claims when verbal elaboration would not be helpful, and placed the burden of production of prior art for any affirmative defenses on the accused infringer. This has made it much easier to prove design patent infringement, and consequently made design patents much more valuable, as Paris Hilton recently discovered in launching her shoe line. Experts recommend that inventors obtain design patent protection for any product with novel and unique visual appearance.

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Network Copyright Wars: “The Hopper,” Ad-Skipping DVR, In and Out of Court

The embittered battle between Dish Network and American Broadcasting Companies has given a public face to the struggle between the entertainment and technology industries over the role of copyright in media.

In this battle, however, theoretical copyright interests are secondary to networks’ central business concern: profit. The future of advertising in major network television could seriously impact the bottom line.  The ad-skipping and mobility features of Dish Network’s product “The Hopper” are a challenge to both advertising revenue as well as the revenue from services such as Hulu Plus, which, unlike The Hopper, provide the networks with licensing fees for mobile services.

The Hopper

In March 2012, Dish rolled out the hopper with a slate of entertaining (if not widely-played) ads.  It received largely positive reviews in the ensuing year.  Hopper users can record and watch their shows as played on live television, the critical difference from most digital recording devices being that the Hopper skips advertisements automatically.  The Sling feature, “Primetime Anytime”, enables customers to simply plug in the Sling device to view recorded content on iPads, iPhones, and the like: the service much easier to use than other versions of Sling which are not integrated into dvr devices, at least according to one review.

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Online Gambling in America

Three states have recently passed legislation authorizing online gambling within their borders.  Proponents of online gambling are drafting similar legislation in other states and even in Congress.  In addition to examining these recent legalization efforts, this post takes a look at the complicated history of online gambling in the United States and speculates as to its future.

The History

In 1999, there were over 250 websites accepting money bets from US players on card games, sporting events, and lottery tickets.  Was any of it legal?  There isn’t a clear answer to this question.  These websites frequently advised players to check the laws in their jurisdiction to ascertain the legality of participation.  As of 1999, only two states had statutes explicitly forbidding online gambling.  Roughly half of the remaining states had laws—usually passed sometime before the invention of the light bulb—making it a crime to place a bet.  The most pertinent federal legislation was the Federal Wire Act of 1961.  This act banned interstate and foreign wagering with the use of a wire device like the telephone.  It was passed primarily to prevent bookies from getting the results of horse races before bettors.  Many believed the government might use this act to punish online gambling operators.

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2013 Symposium: “With Untired Spirits and Formal Constancy”: Berne-Compatibility of Formal Declaratory Measures to Enhance Title-Searching

BTLJ is excited to welcome Jane C. Ginsburg of Columbia Law School on April 18–19, 2013 to the 17th Annual BTLJ/BCLT Symposium: Reform(aliz)ing Copyright for the Internet Age?.

This is a summary of Professor Ginsburg’s topic of discussion and forthcoming article:


Copyright formalities are back in fashion, but their acolytes have divergent objectives.  While some celebrate formalities’ confiscatory consequences and would enlist them to populate the public domain, others would rather populate the public record.  Declaratory obligations like notice, registration and recordation inform the public of the author’s claims and, by facilitating rights-clearance, help the author disseminate and derive compensation from her work.

This paper addresses the Berne Convention’s prohibition of imposing “formalities” on the “enjoyment or exercise” of copyright, and the compatibility with that cornerstone norm of declaratory measures to enhance title-searching. Voluntary provision of title-searching information on a public register of works and transfers of rights is fully consistent with Berne, and should be encouraged.  But may a member State impose sanctions or disabilities on foreign authors for failure to supply that information?

The first Part of this paper establishes that “formalities” prerequisite to the initial attachment or persistence of protection, or limiting the scope of minimum rights or the availability of minimum remedies, violate the norms of Berne and subsequent multilateral instruments.  And while it may be permissible to condition “Berne+” subject matter protection, rights, or remedies on compliance with declaratory measures, that path risks descending into controversies of characterization and line-drawing.

The second Part of this paper suggests imposing declaratory measures going to ownership of rights under copyright as an alternative approach.  Because the Berne Convention generally does not address questions of copyright ownership, conditions on who may enjoy or exercise rights—including sanctions for failing to provide information about transfers of rights—should be Berne-compatible.  Thus, the paper proposes making the validity of copyright transfer depend on the transferee’s recordation with the Copyright Office of “a note or memorandum of the transfer” containing sufficient information to permit third parties to ascertain who owns what rights in the work.  The paper concludes by identifying and attempting to resolve practical problems that such an obligation might engender.

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2013 Symposium: Land Recording and Copyright Reform

BTLJ is excited to welcome Molly S. Van Houweling of Berkeley Law on April 18–19, 2013 to the 17th Annual BTLJ/BCLT Symposium: Reform(aliz)ing Copyright for the Internet Age?.

This is a summary of Professor Van Houweling’s topic of discussion and forthcoming article:


Intellectual property scholars often contrast tangible and intangible property schemes on the basis of how much information is readily available about the identity of property owners and the nature of their rights.  Typically, the comparison holds up tangible property—real property in particular—as the model of successful information provision.  Physical signs can provide clues that a piece of land is owned by someone (often the person in possession).  Public records indicate exactly who that someone is and reveal details about the physical dimensions of the parcel, how its ownership has changed over time, and whether express encumbrances (liens, servitudes, etc.) complicate ownership.  These sources of information help to prevent inadvertent trespass by those who wish to avoid invading private land; they facilitate consensual transactions for those who seek permission to use or buy it.

Intellectual property rights, by contrast, do not so neatly correspond either to physical things in the world or to public records signifying ownership and identifying owners.  Of course physical objects can embody intellectual works—a book can embody a copyrighted story, for example.  But ownership of the physical object does not necessarily (or even usually) correspond to ownership of the intellectual property right or vice versa.

Indeed, readily observable indicia of ownership of physical objects (possession of books, for example) are more likely to mislead than to inform about ownership of the embedded intangible rights.  And although some such objects are marked with signs of copyright or patent ownership, a practice which is encouraged by the relevant federal statutes in the United States, marking is not a prerequisite for protection.  In many cases neither the physical object nor any record to which it is expressly tied provides much indication about whether the intellectual work is owned or by whom.  A story embodied in a book may be copyrighted or it may be in the public domain; the copyright may be held by the author or by an employer, heir, devisee, or transferee; some elements of the story may be free and others owned (by the author or by someone else from whom the author copied with or without permission); etc.  In the patent realm there is at least a centralized record of all issued patents.  There is no comprehensive list of copyrights.

Anxiety about the inadequacy of information about intellectual property rights has increased in recent years due to statutory changes that have made the situation worse (e.g. the elimination of registration and notice as prerequisites for copyright protection), and technological changes that have raised the stakes and thickened thickets of (often hidden) rights.  In the copyright context this anxiety is manifest—for example—in policy debates about the status of “orphan works” whose owners cannot be identified and located, and the (related) fate of the Google Book Search project.  In the patent context critics are alarmed when innovators’ investments are jeopardized by allegations that they have infringed unclear and thus difficult-to-avoid patent claims—especially in the new-fangled realms of software and Internet business methods.  In both the copyright and patent contexts, informational inadequacies can contribute to inadvertent infringement and then to surprising and costly disputes; or fear of potential infringement—combined with the inability to identify, locate, and negotiate with relevant rights-holders—can chill productive endeavors.

Critics of this current state of affairs lament what they see as unnecessarily faulty information provision and suggest that intellectual property should aspire to replicate the superior informativeness of real property.  For example, copyright reformers have called for statutory changes modeled on the centralized ownership information provided by land recording systems and the title-clearing function performed by marketable title acts.  As for patents, although the public availability of issued patents (and of most applications 18 months after they are filed) already provides a relatively comprehensive centralized source of information, critics complain that vague patent claims do too little to clarify inventions’ “metes and bounds.”

I have explored various aspects of the comparison between the information infrastructures supporting intellectual property versus land in other work.  In this essay I will focus in particular on what copyright reformers can learn from land recording systems established in U.S. states and elsewhere.  Solicitude for both original owners and innocent subsequent investors has shaped the land law for centuries.  These competing interests are managed in part by the establishment of property information infrastructures that allow prior and later investors to identify each other and understand their rights.  While critics of U.S. copyright law’s abandonment of mandatory formalities lament that the copyright information infrastructure is less reliable, they are sometimes inattentive to the fact that the land law has also eschewed mandatory formalities that would result in forfeiture of unrecorded interests.  Recording is not generally required to establish interests in land—just as registration and recording are not required to establish copyright ownership.  Instead, land recording systems prioritize competing interests in ways that powerfully incentivize recording by landowners.  What are arguably the best of these systems condition their protections for innocent subsequent investors on their recording as well, thus incentivizing all actors to contribute to a formal information system that can avoid the most difficult fact-specific inquiries into actual notice and the like.  The best of the current proposals for copyright reform share this feature, and a better understanding of land law helps us to appreciate their strengths.

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