Published By: Maxwell S. Kennerly, Esquire

Intellectual Property

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It’s no secret that patent infringement is one of the hottest areas in which to practice law these days.  The inventor-friendly principles that governed the original United States Patent Office back when Thomas Jefferson ran it (though he personally wasn’t too much a fan of patents) are still the law today, even though the scope of prior art in most industries has expanded far beyond the point where any patent examiner could reasonably review it, much less ensure an inventor in an ex parte proceeding fairly describes it.

These days, if an inventor has enough determination, or enough funds to pay for his or her patent registration attorneys to go the whole nine yards, then they can likely obtain a patent even if their invention is at beast only arguably novel or useful. Once granted, the patent has immense value, and is protected against all but the strongest invalidity challenges thanks to the Supreme Court’s opinion in Microsoft v. i4i last summer.

As a matter of law, from the plaintiff’s perspective patent infringement claims are a sweet deal (assuming your claims aren’t totally meritless, in which case the sanctions can be quite severe). Patent infringement cases are less of an uphill climb than, say, anti-trust, drug or medical device product liability, or any claims dependent upon a class action, all of which have been under attack by the Supreme Court for years.  It’s no surprise that defendants facing patent infringement claims often run scared to large corporate defense firms, asking them to pull out all the stops to defend them.

As a practical matter, though, patent infringement cases are a little more complicated than that. 
Continue Reading The Patent Troll Lawyer Business Model

[UPDATE, February 3, 2012: Adam Reid points out via Twitter that Apple has substantially re-written their EULA addressing the concerns raised in my post. (Reid characterizes them as merely “clarifying” the EULA). Now, the EULA asserts that “If you want to charge a fee for a work that includes files in the .ibooks format generated using iBooks Author, you may only sell or distribute such work through Apple, and such distribution will be subject to a separate agreement with Apple.” That puts Apple on far steadier ground — they no longer claim an exclusive license to author’s works at all, but rather restrict use of iBooks-formatted files.]

It seems Dan Wineman was the first to sound the alarm, with Ed Bott using his soapbox at ZDNet to shout it from the rooftops: Apple’s new “free” iBooks Author program, which allows authors to create their own professional layouts while they write books, includes an astonishingly greedy and overbearing clause in its end-user license agreement (“EULA”):

B. Distribution of your Work. As a condition of this License and provided you are in compliance with its terms, your Work may be distributed as follows:

  •  (i) if your Work is provided for free (at no charge), you may distribute the Work by any available means;
  • (ii) if your Work is provided for a fee (including as part of any subscription-based product or
    service), you may only distribute the Work through Apple and such distribution is subject to the following limitations and conditions: (a) you will be required to enter into a separate written agreement with Apple (or an Apple affiliate or subsidiary) before any commercial distribution of your Work may take place; and (b) Apple may determine for any reason and in its sole discretion not to select your Work for distribution.
Apple will not be responsible for any costs, expenses, damages, losses (including without limitation lost business opportunities or lost profits) or other liabilities you may incur as a result of your use of this Apple Software, including without limitation the fact that your Work may not be selected for distribution by Apple.

As Bott explains, “The nightmare scenario under this agreement? You create a great work of staggering literary genius that you think you can sell for 5 or 10 bucks per copy. You craft it carefully in iBooks Author. You submit it to Apple. They reject it. Under this license agreement, you are out of luck. They won’t sell it, and you can’t legally sell it elsewhere. You can give it away, but you can’t sell it.”

Jason Gilbert at Huffington Post considers the problems in enforcing the EULA as a “contract of adhesion” (because it’s included in the license and you have no ability to negotiate it) and as including “unconscionable” terms (a rare legal doctrine that courts virtually never apply). But there’s a more fundamental problem: the terms are unenforceable under the Copyright Act.
Continue Reading Is Apple’s Dismal iBooks Author Software License Even Enforceable?

Yesterday, many of the largest and most influential websites on the Internet exercised their power in our attention economy by either going entirely dark (like Wikipedia and reddit) or by prominently displaying calls to action that recommended users contact their representatives and senators about the Stop Online Piracy Act (“SOPA”) in the House and the Protect IP Act (“PIPA”) in the Senate.  The effort apparently worked, with support for both bills collapsing, particularly in the Senate, where even seven of the former co-sponsors of the bill renounced their support. Of course, there’s a good chance some of the more dubious provisions of both will come back at some point.

There is of course no doubt that the SOPA and PIPA bills were bad laws, little more than major media and content companies buying from elected representatives more power to enforce private copyright interests than your local county District Attorney or United States Attorney has to prosecute violent crime.  The bills astonishingly allowed private companies to take down entire websites, and force other websites to change their entire business practices, upon nothing more than a vague allegation of copyright infringement.  As Donny Shaw at OpenCongress described it more than a month ago:

Back in the old days, Congress was a branch of the federal government, separate from corporations, that wrote and passed laws to defend the general welfare of the United State. These days, however, that work is being outsourced to private interests while the actual members of Congress, quaint as they are, spend their time fundraising for their next re-election campaign.

Obviously Congress bears most of the blame for allowing such an absurd piece of special interest legislation to even make it to the floor, and SOPA/PIPA are certainly not the only examples of Congress granting special privileges to content companies under the guise of copyright law, but let’s not forget another party responsible for this set of affairs: the United States Supreme Court.
Continue Reading Blame The Supreme Court, Too, For SOPA and PIPA

There’s an interesting dichotomy in artistic fields like photography and music in which the audience often describes art as having ineffable qualities arising from inspiration, creativity, and talent, while artists describe art like work as being the product of persistence, experimentation, and drive. Great art looks effortless but never is.

Erica Simone is a photographer…

[Update: the America Invents Act passed. Interesting passage from one of the reports: “Companies like Google, Dell, IBM, Apple, Cisco, and others also applauded the bill’s passage.  Innovation Alliance, which represents smaller tech companies, was more muted in its response. The bill was criticized by some in Congress for favoring larger businesses.” Indeed. The primary change to “first to file” and the secondary change allowing more administrative appeals benefits large companies with large budgets for patent filings. It doesn’t do anything at all to help small businesses; it puts them at a competitive disadvantage.

Update II: Freakonomics has a post about a recent study indicating that, when Canada passed the same change to “first to file,” individual inventors were disadvantaged. That’s consistent with my analysis below.]

Patent trolls, particularly software patent holding companies, are back in the news again with an excellent This American Life broadcast, “When Patents Attack”, examining Nathan Myhrvold’s company, Intellectual Ventures:

We told Intellectual Ventures that Chris Sacca compared their business to a mafia shakedown and in an e-mail, Peter Detkin called that ridiculous and offensive. He then reiterated some of the arguments you’ve heard about how IV protects inventors and went on to say, “We’re a disruptive company that’s providing a way for patent-holders to recognize value.” (By “recognize value,” he means “make money.”) “That wasn’t available before we came on the scene, and we are making a big impact on the market. That obviously makes people uncomfortable. But no amount of name-calling changes the fact that ideas have value.”

David E. Martin, Chairman of M·CAM Inc. (which has various patent analysis services), told NPR that ‘30 percent of U.S. patents are essentially for things that have already been invented.’

That’s a problem. Software patents have fallen under particular criticism because of their ability to frustrate the fast pace (and sometimes shoestring budgets) of internet startup companies. Smart folks who know about software and startups like Paul Graham and Marco Arment have differing views on whether software should even be eligible for patent protection.

Where ever one falls on it — I represent plaintiffs (in this context, inventors or their assignees) so am generally favorable to them, though at the moment I’m defending a infringement suit, too — there are obviously numerous problems with our patent prosecution and patent infringement litigation systems. In sum, patents are granted too easily and then patent infringement suits are too expensive to defend.Continue Reading The America Invents Act’s Patent Reform Might Strengthen Patent Trolls

[Update: January 12, 2013. RIP, Aaron Swartz. He was 26. His family has released a statement describing his death as “the product of a criminal justice system rife with intimidation and prosecutorial overreach.” Eulogies from Cory Doctorow and Rick Perlstein. 

I wrote the post below back in July 2011, when the indictment was filed (then updated it once in Sepetember 2012). I thought from the onset the prosecution was dubious; after Swartz’s death, the expert who was going to testify on his behalf posted his conclusions, conclusions that to me are damning to the U.S. Attorney’s office. MIT’s network was extraordinarily open by design:

Aaron Swartz was not the super hacker breathlessly described in the Government’s indictment and forensic reports, and his actions did not pose a real danger to JSTOR, MIT or the public. He was an intelligent young man who found a loophole that would allow him to download a lot of documents quickly. This loophole was created intentionally by MIT and JSTOR, and was codified contractually in the piles of paperwork turned over during discovery.

In light of the expert’s disclosures — which suggest that Swartz did have “authorization” to obtain the articles, due to the structure of MIT’s network and the various JSTOR agreements — it seems that the prosecution was even weaker than it appeared on the surface. An AP article notes that JSTOR’s attorney, Mary Jo White, the former top federal prosecutor in Manhattan, had called Stephen Heymann, the lead Assistant U.S. Attorney on the case, to ask him to drop the prosecution; instead, the U.S. Attorney’s office continued to demand Swartz plead guilty to all charges. 

I think the circumstances demand an explanation from U.S. Attorney Carmen Ortiz about what she sought to accomplish with this prosecution (and what transpired between her and Heymann), as well as a statement from the White House as to whether they will continue these “exceeding authorization” prosecutions in the future. Arguably breaching a Terms of Service should not even arguably be a crime. For further reading on the abuse of prosecutorial discretion in light of the consequences here, see Lessig’s “prosecutor as bully.” Dan Gillmor has thoughts about how to remember him by continuing his work. 

Update: January 14, 2013. Back in late 2011, Aaron wrote to me about this post. My recollection here.]

The New York Times reports:

Aaron Swartz, a 24-year-old programmer and online political activist, has been indicted in Boston on charges that he stole more than four million documents from the Massachusetts Institute of Technology and JSTOR, an archive of scientific journals and academic papers. (Read the full indictment below.)

Mr. Swartz was indicted last Thursday by the United States Attorney for the District of Massachusetts, Carmen M. Ortiz, and the indictment was unsealed Tuesday. The charges could result in up to 35 years in prison and a $1 million fine.

JSTOR’s press statement is here. One of Swartz’s companies, Infogami, was funded by Y Combinator and acquired by reddit, so this is big news in the tech world. Demand Progress, a non-profit Swartz founded, is understandably upset:

Cambridge, MA –  Moments ago, Aaron Swartz, former executive director and founder of Demand Progress, was indicted by the US government. As best as we can tell, he is being charged with allegedly downloading too many scholarly journal articles from the Web. The government contends that downloading said articles is actually felony computer hacking and should be punished with time in prison.

“This makes no sense,” said Demand Progress Executive Director David Segal; “it’s like trying to put someone in jail for allegedly checking too many books out of the library.”

“It’s even more strange because JSTOR has settled any claims against Aaron, explained they’ve suffered no loss or damage, and asked the government not to prosecute,” Segal added.

There’s an interesting discussion (mostly about JSTOR) at Y Combinator. The commentators at reddit aren’t impressed either:

Good thing he didn’t rape or murder someone or he’d be facing 15 years.

* * *

Hell, if he was a Wall Street CEO they’d just give him a bonus.

Indeed. Let’s look at the indictment. He’s charged with:

  • 18 U.S.C. § 1343 (Wire Fraud)
  • 18 U.S.C. § 1030(a)(4) (Computer Fraud)
  • 18 U.S.C. § 1030(a)(2), (c)(2)(B)(iii)(Unlawfully Obtaining Information from a Protected Computer)
  • 18 U.S.C. § 1030(a)(5)(B), (c)(4)(A)(i)(I),(VI)(Recklessly Damaging a Protected Computer)
  • 18 U.S.C. § 2 (Aiding and Abetting)
  • 18 U.S.C. § 981(a)(1)(C), 28 U.S.C. § 2461(c),and 18 U.S.C. §982(a)(2)(B) (Criminal Forfeiture)

18 U.S.C. § 1030 is better known as the Computer Fraud and Abuse Act, which I’ve written a little bit about here. As I wrote there, “If the Circuit Courts and the Supreme Court interpret the CFAA the same way they’ve interpreted the RICO Act, we’ll see a lot more of these claims in the future,” and it sure seems like given how the Swartz indictment is primarily based on CFAA violations.

[Update: September 12, 2012. Seth Finkelstein notes that a superseding indictment was entered. As far as I can tell, the charges aren’t really different, there’s just more factual detail supplied. Wired explains. As I mentioned in my original post, even if we assume the prosecutor can prove every word of the indictment, it is by no means clear that Swartz has actually violated the Computer Fraud and Abuse Act.]

But there are a few problems, one democratic (little “d”) problem and a couple legal problems.Continue Reading Examining The Outrageous Aaron Swartz Indictment For Computer Fraud

It’s old hat to blog about the problems of copyright law (e.g., here’s some of my thoughts on copyright trolls). There are over a quarter million pages discussing Lawrence Lessig’s “Free Culture” idea. Summed up in a quote:

There has never been a time in history when more of our ‘culture’ was as ‘owned’

…

One of the nice things about the being a Justice of the United States Supreme Court is that you never have to explain yourself. You don’t have to ask questions at oral argument. You don’t have to read the briefs filed by the parties, not really, because you can interpret the facts stated and arguments…

It was quite funny, if you’re into dark humor. Yesterday a group affiliated with the prankster Yes Men set up a “Coal Cares” website which, while falsely claiming affiliation with the very real coal company Peabody Coal, offered free children’s-themed asthma inhalers to any family living within a 200 mile radius of a

…

[Update, December 2012: as predicted, case dismissed, and dismissal just affirmed by the Second Circuit. The court didn’t even reach the class action issue, it just denied it on the merits. “[P]laintiffs were perfectly aware that The Huffington Post was a forprofit enterprise, which derived revenues from their submissions through advertising. Perhaps most importantly,…