COMPUTER HACKER'S EASY ACCESS TO GOVERNOR PALIN'S PERSONAL EMAIL ACCOUNT IS ALARMING; SECURITY EXPERTS ARE NOT SURPRISED

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COURT OF APPEALS FOR FEDERAL CIRCUIT RULES OPEN-SOURCE LICENSING PROVIDES COPYRIGHT HOLDERS SAME PROTECTIONS AS NON-PUBLIC LICENSING

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SECOND CIRCUIT COURT OF APPEALS RULES CABLEVISION'S DVR SYSTEM DOES NOT INFRINGE ON COPYRIGHT PROTECTIONS OF MOVIE STUDIOS AND TELEVISION PRODUCERS

On August 4, 2008, the US Second Circuit Court of Appeals, in a unanimous decision, reversed a federal district court's 2007 ruling, which held that Cablevision's DVR system constituted an illegal rebroadcast of copyrighted content owned by television and movie production companies. (Second Circuit Cablevision Opinion).

As Cablevision Chief Operating Officer Tom Rutledge suggests, this is a hugely-important ruling for Cablevision's DVR service and other prodigy services, "It couldn't be a bigger or more complete win... all aspects of the case were decided our way," Rutledge said to USAToday.

Cablevision's exuberance, however, may be short-lived. The ruling will almost certainly be appealed. In addition, many observers believe the Second Circuit Court of Appeals got this one wrong.

Central to the controversy is the "ad skipping" ability of the DVR system, which, of course, undermines a central principle of viability for Hollywood studios and TV networks.

Time Warner's Turner Broadcasting is leading the charge for Hollywood studios and TV networks. Time Warner and Turner Broadcasting will now need to re-tool its strategy, in its attempt to shut-down the growing use of DVR systems in America's TV-savvy homes.

Here is USAToday's article referenced above (Cablevision wins in ruling on remote-storage DVR), and an opinion on the decision from the LATimes blog (The Cablevision DVR ruling | Bit Player | Los Angeles Times).

SUPREME COURT'S 2006 eBAY "IRREPARABLE HARM" PATENT RULING NOW PLAYS OUT IN IMPORTANT APPELLATE COURT TRADEMARK AND COPYRIGHT CASES

Since the Supreme Court's 2006 eBay v. Merc Exchange decision, the question has been whether the presumption of "irreparable harm" is available to plaintiffs when considering injunctive relief in copyright and trademark cases.

No doubt, this is an important question for intellectual property litigators. The answer may also be, on the short-side, a few years away. [ARTICLE IN A MOMENT]

DISTRICT COURT FOR SOUTHERN DISTRICT OF NEW YORK SETS ASCAP ROYALTY RATE FOR MUSIC PLAYED ON THREE MAJOR INTERNET-PROVIDER SITES - APRIL 2008

On April 30, 2008, the US District Court for the Southern District of New York set the royalty rate that three major internet providers must pay ASCAP for the use of ASCAP composers' compositions.

The US District Court decided the royalty rate issue, in this instance, because the involved parties could not agree on a royalty rate under prior royalty rate guidelines, which were first established in 1941. The royalty rate for the use of music compositions is normally set by a rate board, unless the parties cannot agree on a fair, and consistent, royalty rate for the use of artist compositions.

AOL, Yahoo, Real Networks, and the royalty rate board could not agree on a fair rate in earlier negotiations over the previous three years. In turn, the court stepped-in and set the royalty rate that the three major internet providers must pay ASCAP, for the use of its artists' compositions, at 2.5%.

The 2.5% royalty rate is in-line with other rates paid by other users, in other mediums. Perhaps more importantly, the rate-setting district court decision establishes guidelines for the way internet providers will be treated by the royalty board in the near future. [MORE SHORTLY]

SUPREME COURT REFUSES TO HEAR FANTASY BASEBALL DISPUTE BETWEEN MAJOR LEAGUE BASEBALL AND A MISSOURI FANTASY BASEBALL COMPANY - JUNE 2008

On June 2, 2008, the Supreme Court denied writ of certiorari to Major League Baseball to hear its licensing dispute with the St. Louis-based fantasy baseball company, CBC Distribution.

Originally, the 2005 lawsuit was brought by CBC against MLB to protect its right to use MLB players' names and statistics in its fantasy baseball league, which MLB had moved to prevent.

In response to earlier difficulties securing revenues from the rapidly growing fantasy baseball market, MLB created its own fantasy baseball league, and then began informing outside companies, each could license the use of the new MLB fantasy league, but could not, effectively, run independent fantasy baseball leagues.

Without comment, the Supreme Court turned down the MLB appeal of the Eighth Circuit ruling, which affirmed an earlier district court ruling that CBC Distribution is not required to pay licensing fees to use MLB players' names and statistics in its fantasy baseball league (Eighth Circuit Opinion, Supreme Court Order).

The Federal Appeals Court in St. Louis held that, First Amendment guarantees outweigh the "right of publicity" that team owners and the players union had offered to support the argument that fantasy baseball leagues must pay licensing fees to use player names, statistics, and other public information.

In its ruling, the Eighth Circuit said, “the information used in CBC’s fantasy baseball games is all readily available in the public domain, and it would be strange law that a person would not have a First Amendment right to use information that is available to everyone.”

In its argument to the Supreme Court, MLB argued that its "right of publicity" outweighed CBC's First Amendment right to use information that is publicly available. The Supreme Court, however, agreed with the appellate court ruling, which affirmed that First Amendment rights are superior, under the circumstances.

This, effectively, ends MLB's attempt to gain control of the fantasy baseball market through licensing rights, which is an argument that has consistently been rejected by the courts.

It is an important ruling no doubt, as fantasy baseball has grown in to a $1.5 billion per year industry since its introduction in the mid-1980's. Now MLB will need to pursue other methods to gain its share of the fantasy baseball market, not its claim of licensing rights by way of "right of publicity."

Here is a Wall Street Journal article (Wall Street Journal), and a New York Times article (New York Times) on the Supreme Court ruling.

DISTRICT COURT JUDGE FOR MANHATTAN RULES eBAY IS NOT LIABLE FOR COUNTERFEIT ITEMS SOLD ON ITS AUCTION WEBSITE; POLICING IS DUTY OF INFRINGED COMPANY

On July 14, 2008, U.S. District Court Judge Richard Sullivan in New York ruled that eBay is not liable for counterfeit items sold on its online auction website. In fact, District Court Judge Sullivan held, a company, like Tiffany in this case, has the responsibility to do its own policing for counterfeiting and other trademark infringement issues relating to its products sold online.

eBay calls the ruling a "major victory for consumers." However, the ruling also comes on the heels of a French court ruling last month, which ordered eBay to pay Louis Vuitton $61 million for similar "knock-off" items sold on eBay that infringed on LV's trademark rights. eBay has appealed the French court ruling.

Regardless, the July 14, District Court Judge ruling is an important victory for eBay and its online competitors. As District Court Judge Richard Sullivan's 66-page opinion states, "Brand owners must be vigilant [in protecting trademark interests online]."

Separately, in a yet to be settled question of law, the district court judge also said that eBay could use the Tiffany name in its ads, both on its home-page and in sponsored links eBay buys on search engines such as Google and Yahoo. Important lawsuits still pend in the area of search engines and related internet advertising.

Here is one eBay press release on the favorable ruling for eBay (eBay-EBAY issues statement on Tiffany ruling) and a clip from the eBayInk Blog, on the company's victory (eBay Wins Tiffany Court Case).

U.S. DISTRICT COURT FOR NORTHERN DISTRICT OF GEORGIA RULES WAL-MART HAS NO ESTABLISHED TRADEMARK RIGHTS IN THE UBIGUITOUS, YELLOW SMILEY FACE

There is little dispute that the yellow "smiley face" has been in commercial existence since the early 1970's, if not before. However, the trademark rights to the ubiquitous and timeless image have yet to be established, some 35 years later.

Regardless, Wal-Mart, the mega-store retailer, argues that it has gained exclusive trademark protection for the well-recognized, yellow smiley face from its continued commercial use of the image in its mega-stores.

However, on March 20, 2008, the US District Court for the Southern District of Georgia ruled, in part, that Wal-Mart has established no current rights in the trademark.

The District Court ruling stems from a trademark infringement lawsuit Wal-Mart brought against a Georgia man, who was making and selling T-shirts, beer steins, and other items sporting various slogans parodying Wal-Mart.

What was not in dispute is the fact that Wal-Mart has trademark protection for "WALMART" "WAL-MART" AND "WAL*MART", and its registered word mark "ALWAYS LOW PRICES, ALWAYS." In dispute, however, was Wal-Mart's contention that it had acquired common law trademark rights in the smiley face under the principle of "secondary meaning." Here, the court strongly disagreed.

A mark, like the smiley face, that is not inherently distinctive, may acquire distinctiveness or secondary meaning by "becoming associated in the minds of the public with the products or services offered by the proprietor of the mark..." the court stated, quoting a 2007 Eleventh Circuit opinion.

However, Wal-Mart failed to establish this level of recognition, acceptance, or distinctiveness, the court concluded.

The District Court found that Wal-Mart presented little evidence to support its secondary meaning claim to the smiley face. In fact, the only evidence presented by Wal-Mart supporting its claim was a "conclusory" affidavit from a senior marketing manager who had been with the company since November 2006.

In turn, the District Court granted defendant's summary judgment motion on all Wal-Mart claims pertaining to the yellow smiley face.

Wal-Mart, however, continues to fight for trademark rights in the smiley face. The United States Patent and Trademark Office has still not ruled on a dispute over the rights to the smiley face between Wal-Mart and a French family that claims to have registered the design with French trademark authorities. The dispute began in 2005.

The 65 year-old French citizen, Franklin Loufrani, registered the smiley face in France in 1971. As Loufrani told the New York Times in 2006, "A prehistoric man probably invented the smiley face in some cave, but I certainly was the first to register it as a trademark." And, Loufrani says, "When it comes to commercial use, registration, is what counts."

The New York Times also reports that the most widely accepted claim for inventing the smiley face goes to Harvey Ball, for the smiley yellow button he designed for the State Mutual Life Assurance Company of America in 1963.

According to Ball's 2001 obituary in The Worcester Telegram & Gazette, the Times reports, Ball was paid $45 for designing the button intended to cheer up employees during a tough time for the company. Ball, however, never registered the mark or used the mark commercially.

Here is the New York Times article referenced above (Smiley Face Is Serious to Company) and another article from the Trademark Law Blog on Lexis/Nexis (Trademark Law Center: Trademark Infringement: No Smiley Face).

SUPREME COURT RULES IN FAVOR OF QUANTA IN IMPORTANT PATENT INFRINGEMENT CASE ADDRESSING THE DOCTRINE OF PATENT EXHAUSTION

On June 9, 2008, the Supreme Court, in a unanimous decision, ruled in favor of Quanta and against LG Electronics, holding that the doctrine of patent exhaustion applies to the authorized sale of components that “substantially embody” a process patent.

Patent exhaustion means that any single sale of the patented component to another manufacturer effectively ends the life of the component's patent protection.

The Supreme Court opinion (QUANTA COMPUTER, INC. v. LG ELECTRONICS, INC.), delivered by Justice Thomas, affirms the longstanding rule that “the right to vend is exhausted by a single, unconditional sale, the article sold being thereby carried outside the monopoly of the patent law and rendered free of every restriction which the vendor may attempt to put upon it.” Motion Picture Patents, 243 U. S. 502 (1917).

The ruling states that the "patent exhaustion doctrine provides that a patented item’s initial authorized sale terminates all patent rights to that item." See, e.g., Bloomer v. McQuewan, 14 How. 539. In the Court’s most recent discussion of the doctrine, United States v. Univis Lens Co., 316 U. S. 241.

In short, the patent exhaustion doctrine, also referred to as the "first sale" doctrine in patent and copyright case law, is alive and well.

The ruling, reversing the Federal Circuit, also states that, among other things, "...the doctrine of patent exhaustion applies to method patents, and because the License Agreement [between Intel (for LG) and Quanta] authorizes the sale of components that substantially embody the patents in suit, the exhaustion doctrine prevents LGE from further asserting its patent rights with respect to the patents substantially embodied by those products."

The decision, Patently-O suggests in a June 9 article, supports two patent dictates: (1) method claims can be subject to exhaustion and (2) sales of products that that do not fully practice the invention can still trigger exhaustion when the products include essential features of the patent and the “reasonable and intended use” of the product is important to the patent.

Here is the Patently-O article from June 9 (Supreme Court Decides Quanta v. LG ...) and another article from WallStreetJournal.com, with an interview with WSJ Supreme Court reporter Jess Bravin (Chipping Away at the Quanta v. LG Electronics ...).

APPLE COMPUTER WORKS HARD TO EXPAND ITS TRADEMARK PROTECTIONS AND BRANDING FOR THE ICONIC iPOD

On January 8, 2008, the U.S. Patent and Trademark Office granted Apple Computer a trademark for the three-dimensional shape of its iPod media player. Traditionally, trademark protections have applied primarily to names, images, logos, symbols and other two-dimensional aspects of trademarks.

More recently, however, the USPTO has granted non-traditional trademark protection for aspects of products such as color, scent, and shape. An excellent example of this, is the trademark protection provided Yamaha Motor Corp., for the arching water spray that is produced by its jet ski, as David Orozco and James Conley reported May 12, in a Wall Street Journal article on the iPod trademark.

Non-traditional trademark protection is difficult to obtain. Approval for protection, turns on convincing the USPTO that for the consumer, the three-dimensional design component is a key aspect to consumers' recognition of the product.

Accordingly, Apple needed to show that media player consumers, recognize the iPod specifically for its shape. This protection arises from the "likelihood of confusion" analysis, that trademark law embraces.

Trademark protection in this area is particularly important because trademarks can remain in effect in perpetuity, while utility and function patents expire, and may become fair-game for competitors.

In addition, trademark law allows a plaintiff like Apple to not only sue the manufacturer of an infringing product, but also the distributors of the product. This provides an additional deterrence, which may otherwise be ignored by competitors, particularly in the hugely-competitive market of mobile media players.

Here is the David Orozco/James Conley Wall Street Journal article referenced above (Shape of Things to Come) and a short article from engadget with links (Apple trademarks iPod's design).

US DISTRICT COURT FOR SOUTHERN DISTRICT OF NEW YORK RULES GOOGLE MUST PROVIDE VIACOM WITH YOUTUBE USER ID INFO INCLUDING IP ADDRESSES

As Electronic Frontier Foundation reported July 2, 2008 (Court Ruling Will Expose Viewing Habits of YouTube Users), the United States District Court for the Southern District of New York has ruled in favor of Viacom, and against Google/YouTube, in a hugely important internet privacy case.

The district court's ruling, among other things, instructs Google to provide Viacom with YouTube user log-in information, including the user IP address (internet protocol address - your computer address), which has previously been held private.

The ruling, EFF and others suggest, is a major rebuke of the Video Privacy Protection Act (VPPA) (18 U.S.C. § 2710). The court, however, states that it dismissed Google's VPPA argument, because Google cited "no authority" to bar such disclosure of log-in information in civil proceedings.

Regardless, the NY district court ruling applies broadly to YouTube users. Quoting the district court opinion, EFF reports that the ruling applies to:

"all data from the Logging database concerning each time a YouTube video has been viewed on the YouTube website or through embedding on a third-party website."

In other words, Google must provide all log-in ID information, for all YouTube users, which includes the IP address of the user. This also includes the content, time, and duration of all video views.

Here are court documents pertaining to the case, courtesy of justia.com (Viacom v. Google litigation), as well as the July 1 order from the District Court/Southern District of New York (ordered). An appeal is certain.

ELEVENTH CIRCUIT RULES IN FAVOR OF NATIONAL GEOGRAPHIC IN IMPORTANT COPYRIGHT ROYALTY CASE AFTER A DECADE OF LITIGATION

For over a decade, the National Geographic Society has fought photographers and writers over whether it must pay additional royalties associated with the sale of its Complete National Geographic digital archive series, which it markets through its usual channels.

On Monday, June 30th, the Eleventh Circuit, in a sharply divided 7-4 decision, ruled in favor of National Geographic and against a Florida photographer whose work appeared in National Geographic magazine.

As law.com reports, 17 U.S.C. § 201(c) is the copyright statute at issue. The ruling turns on what constitutes an acceptable revision and what constitutes a new work in light of a 2001 Supreme Court landmark copyright ruling, New York Times v. Tasini.

The Court in Tasini held that publishers, like Lexis/Nexis, must get copyright permission to reprint freelance writer's articles on its database. The Eleventh Circuit ruling, distinguishes between reproduction of freelance works for a company's database and works that are reproduced in CD-ROM or DVD format.

Back-to-back rulings by the Second Circuit and now the Eleventh Circuit, favoring the National Geographic Society, will allow magazine and newspaper publishers to market their archived publications in CD-Rom and DVD format without being required to pay royalties to writers and photographers whose work appeared originally in magazine or newspaper format.

Here is the law.com article referenced above (Law.com - Legal News, Legal Technology) and the majority opinion follows ( Jerry Greenberg v. National Geographic Society).

HEAVY SANCTIONS LEVIED FOR DISCOVERY ABUSE IN THE QUALCOMM V. BROADCOM PATENT INFRINGEMENT CASE; LITIGATORS AND LAW FIRMS TAKE NOTE

In Sanctions Order of January 8, 2007, Magistrate Barbara Major ordered Qualcomm to pay $8.5 million for "monumental" discovery abuses in its patent infringement suit against Broadcom. While that order has been vacated and a new trial ordered, the order is only vacated as to six of Qualcomm's outside attorneys who were also sanctioned but not financially penalized Order dated March 5, 2007. Qualcomm's appeal of the earlier order is still pending, and Qualcomm has challenged the trial court's jurisdiction in the case.

Late in trial, a Qualcomm witness revealed that hundreds of thousands of Qualcomm emails, key to Broadcom's waiver defense, had been withheld from the defense, in what the court characterized as blatant, purposeful, and egregious discovery abuse.

While the six outside attorneys maintain their position of non-involvement, litigators and law firms have heard another wake-up call in the area of e-discovery and Rule 37 sanctions.

Central to the discovery problem in Qualcomm, and other major discovery abuse cases, is the precarious relationship between the big corporate client, its in-house counsel, and the outside attorneys working on the case. Particularly problematic, is electronic discovery. and control and communication issues in gathering requested electronic information.

Here are a few pertinent articles on Qualcomm sanctions and the ongoing litigation. Heavy Sanctions Loom Against Attorneys for e-Discovery; Legal Technology - Qualcomm Case Sends Tremors Nationwide; and IPToday.com - Intellectual Property Today - Qualcomm v. Broadcom.

NINTH CIRCUIT COURT OF APPEALS RULES AGAINST ROOMMATES.COM IN IMPORTANT INTERNET DISCRIMINATION CASE - APRIL 2008

In Fair Housing Council of San Fernando Valley v. Roommates.com, 08 C.D.O.S. 3857, the Ninth Circuit, in an 8-3 ruling, found that Roommates.com, an internet roommate matching site, did not warrant immunity under the Communication Decency Act. The ruling is an important dictate on how internet websites must handle outreach to customers in a group setting.

The Ninth Circuit, Chief Judge Alex Kozinski opinion, attempts to distinguish between discrimination liability for "passive" websites, and those that actively manage content and related interaction.

In particular, the majority opinion explains, because roommates.com not only requested gender and sexual preference information upon registration, but its matching service users used this information in the roommate selection process, roommates.com was in violation of federal housing discrimination laws.

Effectively, it is the nuanced difference between content and content control, that carried the Ninth Circuit 8-3 decision.

Here is one article on the Ninth Circuit decision (Law.com - 9th Circuit: No Immunity for Roommates.com), and Judge Alex Kozinski's majority opinion can be accessed within.