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This Week in Law 249
Denise Howell: We've got a real treat coming up on This Week in Law. We've got Orrick Herrington's Neel Chatterjee, he's a patent expert and we're going to talk about patent reform, the Supreme Court's recent intellectual property fascination, let a thousand Flappy Birds bloom, betting Getty Images and much more next on This Week in Law.
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Denise: This is TWiL, This Week in Law with Denise Howell and Evan Brown, episode #249, recorded March 7, 2014
Release the Flappy Kraken
Denise: Hey folks I'm Denise Howell and you're joining us for This Week in Law. We're thrilled you've joined us this week. We've got an excellent guest, he is Neel Chatterjee, the co-chair of one of the most renowned Silicon Valley law firms, Orrick Herrington. Great to have you here, Neel.
Neel Chatterjee: Hey thanks for having me, this is very very cool.
Denise: It's very very cool to have you, Neel is mostly a patent lawyer, but as co-chair of the IP department at his firm, I'm sure Neel, you have your hands in all sorts of different tech and IP kinds of issues.
Neel: I do, I do all kinds of weird internet stuff, I do trade secrets disputes, for instance, I'll step in after one company loses another and then loses a whole bunch of employees to the other company. I've litigated the question of “Can you sell a duck on eBay?” All sorts of different weird things like that. When someone says something that another person doesn't like online, I often get pulled in to have to deal with that. I've even dealt with problems associated with kids posting stuff and ending up in juvenile hall.
Denise: Wow, yeah. We want to run through some of your Internet Greatest Hits cases in a minute, but first I want to introduce my co-host Evan Brown. Hello Evan!
Evan Brown: Hey Denise, hope your Friday's going well. It's good to be here. Neel, nice to meet you, really looking forward to our conversation.
Neel: Nice to meet you Evan.
Denise: So tell us about ducks on eBay. It seems like that would have been a Terms of Service violation that someone was engaged in.
Neel: So, I've been doing internet stuff since 1993, before they named the Internet “The Internet” formally, and this was in the very early days of eBay, 1997-98 time frame. And back then, nobody knew about these Terms of Service rules, nobody knew what people could do online or not do online, and eBay was becoming really popular. It was started because a guy wanted to sell Pez dispensers for his wife, and then everyone started selling everything. People were trying to sell votes online, they were trying to sell their virginity online, they were selling all kinds of things through eBay… And I happened to be down there, they had one and a half lawyers, a person who worked part-time and a person who had just been hired. And one of those guys – he looked kind of like a Canadian mountie – he kind of walked in, and he was from the US Fish and Wildlife Service, and he handed a subpoena and said “Someone’s selling a duck on eBay and I'm not sure that people can do that.” And everyone back then kind of shrugs their shoulders… “I don't know what people can sell on eBay and what they can't.” And so now the Terms of Service are pretty clearly defined, and whether a company like eBay would be liable, is pretty well defined, but back then nobody really knew. So we dealt with a lot of lawsuits early in eBay's history about what are kind of the rules of the road. A lot of the early rules about what people should or should not sell on eBay were actually, they were drafted by eBay, but we played a pretty big role in helping come up with those rules of the road. Today they have a huge in-house legal department that does all of that stuff but in the early days, it was trying to figure it out as we went along.
Denise: Was Jay Monahan there for the duck?
Neel: Yeah, and actually Jay is a really close friend of mine. No, he was not there for the duck, he was hired about two years later. Jay became a very good friend of mine through working with eBay, and has remained a very good friend of mine, even in his retirement, when he's decided to become a sommelier in Paris or something.
Denise: Yes, I enjoy following his Facebook lately because he looks like he's having a heck of a time. He's been on our show before. Maybe sometime we can have you both on, that would be a good fun way to have you guys tell war stories from back in the day.
Neel: Yeah, that'd be cool, that’d be cool. I miss Jay, actually.
Denise: Yeah. So, it's interesting that eBay went through all of that, and now I guess people just, if they had a duck for sale they would put it on Craigslist.
Neel: Probably, or maybe there's a livestock business-to-business commerce website or something.
Neel: But, I'm sure there are lots of places where one can buy livestock today online.
Evan: Yeah, that's more of a “dark web” kind of thing. You really got to go way underground to get your livestock, depending on what your predilections are. But I would imagine there's something out there, right?
Neel: Stay away from the guy looking for goats aggressively.
Denise: [laughing] Good advice all around. You were telling us before the show that your profile pic on LinkedIn has you in a Viking helmet with a huge can of Spam. Tell us about what prompted that picture.
Neel: Yeah, so a number of years ago, I was dealing with a lot of online spam activities. One of the weird Internet things that I do is getting involved in digital crime and digital activity that’s of the sketchy variety. One thing that a lot of clients hire me for is to stop spammers, or people who are kind of abusing their computer systems. We had one guy who has basically come up with a spam campaign on Facebook, and we were able to secure an $860 million judgment against him, and at the time it was a really, really big decision. So, when I was doing this spam work, a local newspaper said they were going to write an article about some of the interesting things that I was doing (one of the legal newspapers). And typically, when people take pictures of lawyers, they all kind of have the same dark suit, and they cross their arms and try and do the camera looking up, so they look ominous into it. I, instead, said “You know, I’m kind of an irreverent guy…” So I got a can of Spam and a Viking hat, and on the cover of this newspaper was a picture of me, looking absolutely stunned, and looking at the Spam can, and they took a picture and put it on the cover of the newspaper. So I took that picture, and I put it on my LinkedIn page.
Denise: Love it. It’s great when lawyers don’t take themselves too seriously, and it seems like – much as I’ve got to say I have this prejudice against big firms sometimes, where I think that in order to make “equity partner,” or certainly co-chair of the Intellectual Property Department at a firm like Orrick, you might have to have a good dose of Frank Underwood in you, but I think you’re changing my mind about that, Neel, so that’s great.
Neel: Yeah. So, Denise, I don’t know… I don’t think you’re a friend of mine on Facebook. I friend almost anyone who friends me, so I lose a little bit of track. But I actually have a section on my Facebook page (in the Notes section) for the Maximum Awesomeness Practice group, or the MAPG. We have our guiding principles, and they include important things like “Eat as much bacon as you can.” So, in your group, a little bit of irreverence is key.
Denise: Yeah, absolutely. Alright, well, let’s get into what’s going on in the world of patent, your specialty, because it’s super interesting right now, both in Washington and the Supreme Court. Things are kind of heating up.
[Segment intro music plays]
Denise: So, let’s talk about some bills that are pending. Patent reform has obviously been on many people’s minds. There is a bill that’s been pending in the Senate; a new one was just introduced. Can you bring us up to speed there, and what’s your best guess on where the Senate bills are going.
Neel: I think the message of the day is that “change is a-comin’,” but we just don’t know from where. There are a number of key components that are being debated in the Senate (in the House, in the courts, in the FTC, in the U.S. Patent and Trademark Office, in the White House) that are all directed at solving aspects of the same problems. The most recent bill that’s been introduced is really to improve the transparency. What people are really getting at is: patent trolls, normally, are shell companies. They don’t have any employees, they’re often just a name on the door, and nothing more than that. And then, they’re held by people that hide in the shadows in the background, because they don’t want to be tagged as being patent trolls, necessarily, and they also want to insulate themselves from liability. So one of the things that people are trying to do is say “Look, if you want to form a shell company, that’s fine, but you’re not allowed to hide your identity. Because if you’re s scumbag, or a very bad person, or just a shakedown artist, the world is entitled to know who you are.” This is important, because there are some companies who will find themselves literally hundreds of patent-troll lawsuits, and if they knew who’s pulling the strings in the background, they might decide to fight – or not fight – depending on who the people in the background really are. Because sometimes you want to send a message, and sometimes you just want a problem to go away and avoid expense. But that transparency is becoming a very important issue. Once you have that transparency, you then start being faced with the question of “Well, should I put those people on the hook too, if they’re just bringing meritless claims to shake people down?” That’s really what some of the new stuff is getting at – really to improve the transparency of who’s shaking who down, how are they doing it, constraining what they can say (and requiring them to say certain things), and really trying to make sure there’s a little more accountability in the process.
Denise: So this is Senator McCaskill’s bill, co-sponsored by Senator Rockefeller, and one of the things it would do – as you’ve been discussing, Neel – is to allow the FTC more leeway to require, when folks are sending out Demand letters, that they’re going to have to disclose more about themselves. Can you outline how you see that playing out?
Neel: Yeah. So there are a couple things that the bill requires. The first thing is, you can’t just say—people do this all the time, they send hundreds of letters out saying “I have a patent. Give me a pile of money.” And now it’s requiring people to be much more specific in what their accusation is, to say who are the patent’s owners and where are they located? (How can you find them?) What’s going on with respect to the patent (because really the goal is to make it much more transparent)? And then, if people are really bending the rules too much – and I forgot to mention this earlier – it’s putting some hammers in place, where there can be fines for not being precise or clear enough, there can be Attorney General actions that are now in place that can be authorized to let state Attorneys General target this kind of behavior. It’s really to deal with the very specific aspect of patent trolling, which is sending out lots of letters to create fear, uncertainty and doubt in the marketplace.
Denise: Right. So, you think that, if people are required to disclose that they’re a non-practicing entity – or that they are basically a P.O. Box in east Texas somewhere – that people might be inclined to not roll over when they see these letters?
Neel: Either not roll over—I would say that’s one piece of the information, because that’s one piece that they have to give, but what it does is it makes the patent troll (if it is a patent troll) have to work much harder in setting forth a credible theory of infringement, with really strong consequences if they’re just trying to shake people down. Also, it will help people know what’s the nature of this troll, and what’s going on with these patents in a way that will try and create more accountability, so some people can think twice. Because, like any kind of legal dispute… for companies that receive thousands of these letters, they’re trying to figure out “What’s the threat matrix on this? Is this a big deal? Is it a small deal? Or it is someone just trying to shake me down?” This type of information will make that a lot more accessible.
Denise: Well it seems like a good idea to me. It also seems kind of unprecedented. Evan, can you think of another area of the law where someone sending out a Cease and Desist (or Demand) letter has various FTC-compelled disclosures they have to make? Or other federal agency-compelled disclosures?
Evan: Well, no, nothing precisely on point like this, but we do see plaintiffs being regulated at a consumer level (I’m thinking of the Fair Debt Collection Practices Act, I’m sure we could map over a few points where there are similarities there to protect the recipients of mean letters). It’s an interesting phenomenon, though, what we see here, because a lot of the justifications for the changes that are going on here – the increase in transparency, the requirements that patent assertion entities come up with more information – this seems something very specific to the litigation phenomenon, or at least the Invitation to License phenomenon, that we’re seeing here. It’s hard to figure out how it has a basis or a justification from the intellectual property perspective – the underlying intellectual property law that’s looking to be addressed here, whether the claims be meritorious or not. That’s what seems to be the most interesting thing to me about it: how we’ve seen trolls behave badly, so there’s this response here, based on the ideology that patent trolling is bad, managing the way that plaintiffs and senders of these letters are supposed to be. It’s interesting, isn’t it, to think that it really doesn’t relate to the intellectual property issue, it’s just the practice that has risen up around it. That’s what’s interesting to me.
Neel: There is one—
Denise: Neel, do you—
Neel: Oh, go ahead.
Denise: Sorry, one quick question: Do you think it’s going to be—I mean obviously, they’re not going to have to put a whole complaint into a letter that is calculated to do away with the need to file a complaint, but they’re going to have to come up with some kind of legal substance in these letters, should this bill pass.
Neel: Yeah, they’re going to have to come up with some articulatible basis to assert infringement – more than just saying “You have a product that’s on the Internet,” or something like that.
Neel: I think there probably will be some fights that happen if this bill is passed, about what’s the level of specificity required, what actually has to go in there, what kind of investigation needs to go into writing such a letter… None of those things are really defined right now. I did want to make one comment about your previous question, which is: we do have one instance that I can think of where there’s something kind of like this. The instance is notifications under the DMCA (the Digital Millennium Copyright Act). Because, in those instances, you have somebody that’s sending a letter to an Internet service provider saying “Hey, some of my copyright stuff is on your system, and you need to block it, or take it down.”
Neel: And the way that the case law is developing in that area is they’re saying “Look, when you’re a copyright holder, you actually have to do things like analysis of fair use, and you have to make sure that you have a good-faith basis to send some kind of a DMCA request.” Otherwise, there are dire consequences, not to the FTC or state Attorney General, but for sending an incorrect DMCA notice. So, it’s a little bit different, but it does have some degree of similarity.
Denise: So, in keeping with our theme of “patent as political football these days,” the White House has its own proposals that it’s putting forth. Can you tell us about those?
Neel: Yeah. The White House is doing a bunch of different things, and like I said, there are all these different people that all agree that patent trolling is a problem, and they’re all struggling to figure out what’s the right way to go, and they’re all kind of racing on how to deal with things. The first thing – and I think this is by far the most interesting thing – is the crowdsourcing idea, where they are talking about allowing crowdsourcing for searching for prior art (the kind of technical information that would predate a patent, that would invalidate it).They’re talking about doing some executive functions that are adjustments to the USPTO that would allow for that kind of activity. I think that’s the big one. That’s a really, really creative idea. It’s similar to what Adam Carolla is trying to do, but on a governmental level, which is interesting. The nest thing that they’re doing is that they’re increasing the training in the USPTO as it relates to what’s called “functional claiming.” “Functional claiming” is a way to write a patent claim based upon what something does, rather than what it is. There’s a big debate in the law about when and how it’s appropriate to do functional claiming, and a lot of patent troll activity is really driven by functional claiming. So the White House is trying to put in place some measures to really make it a much more restrictive approach, to make sure people aren’t gaming the system to draft these very broad, functionally-written claims. The next… I’m trying to think what all the different criteria are… Those are the two that I can think of off the top of my head. I’m sure there are a couple other major ones, but those are the ones that get the most attention: really cracking on functional claiming, and the crowdsourcing idea. I can’t remember, off the top of my head, if the Executive Order also included having more transparency also, with respect to patent troll letters and the like.
Evan: It sounds like the natural effect of both of those things – the crowdsourcing to presumably find more prior art that wouldn’t be discovered otherwise, and this emphasis on functional claiming – it seems like the end result would be fewer patents issued. Is that too simple of an extrapolation to make from this?
Neel: I wouldn’t say it would necessarily mean fewer patents being issued. It might mean that people are going to be held to the fire a little bit more to draft more specific claims, or more specific claims directed towards how something is actually built, rather than its market utility, in some ways. But it is directed towards curbing some of the types of claims that seem to be the biggest problems in the patent troll world, so it could reduce the number. I think it’s more likely to narrow the scope of them.
Evan: I see.
Denise: So, a couple of other aspects of the White House’s approach here is they have… I’m not sure if this is the White House, or the Patent Office… The EFF is reporting on the White House changes, though, and talking about the Patent Office now having a toolkit that’s called “Been Sued or Gotten a Demand Letter?” that has a bunch of best practices and resources for businesses and individuals who are facing a threat of patent suit, perhaps from a patent troll. The other things the EFF highlights are that the Patent Office personnel will have more training for the examiners, and also more educational tools for people who have been sued, pro bono , and pro se assistance, giving people resources to seek free counsel and have more resources if they want to represent themselves to become educated about patent claims. That’s a pretty tough road, especially given that the patent bar has its own bar exam that people pass in order to practice in that area. It’s not something that a pro se litigant should take on lightly, is it, Neel?
Neel: There are two kinds of pro se activities. One is activities in front of the Patent Office, and the activities in front of the Patent Office... you have to pass the patent bar, there’s a lot of really complicated rules, and you have to have a very specialized understanding. The other one, if you’re just going into court, it can be any practicing lawyer, and you can represent yourself. But again, there’s a lot of highly specialized rules when you’re going into a court that – even though you don’t have a patent bar license, and people do the patent litigation (I do that, and I’m not patent-bar certified) – it’s still really complicated; a very foreign process. I guess my issue with that piece of it – I think it’s always good for the government to give more information and guidance to people – is I just don’t think people will necessarily know where to find that information. When someone’s sued in a lawsuit, I’m not sure it would be their first instinct to say “Hey, I was just sued in a lawsuit, I’m going to go to the Patent Office.” And so these educational resources are great, and I really encourage them. I’m not sure they’ll be as impactful as some of the other things that the White House is doing.
Evan: I guess it just depends on how good the federal government is with the SEO, right? Because most people just do a Google search on this stuff, and if the Patent Office stuff comes up high, it will be a resource.
Neel: Right. It might be nice if the local court systems that are seeing a lot of these patent cases – like the eastern district of Texas, or Delaware, or something – had a link on their web site, because people do tend to go look at the local court’s web site when they’ve been sued someplace, and that might drive more traffic and let the information get out better.
Denise: Let’s talk about the crowdfunding, or crowdsourcing, piece for a moment. We’re talking about letting people contribute their ideas and their insights to finding prior art on patents. There have been a couple of projects that have gone that way in the past, but never something institutionalized by the Patent Office, is that right?
Neel: Yeah, I've never seen anything institutionalized like this.
Denise: So that seems like a great idea. Then I said a moment ago crowd funding instead of crowd sourcing. Is there a piece of that too or is it more sort of tapping the communities knowledge?
Neel: I don't know the answer to that. I think it is mainly crowd sourcing with various types of rewards built in. But the thing that Corolla is doing which is outside of the government obviously, is more crowd funding and there is an element that is crowd sourcing. I think there is some element of going to the community and having a a reward. But I don't know exactly how that funding plays out. I am not sure there is a definitive decision on that.
Denise: Right. You were on is show back what was it November or December last year?
Neel: Something like that, yeah.
Denise: Something like that, talking about the litigation he is facing in east Texas, he and his show, his company. On this so called pod-casting patent. Do you know if there have been any developments there?
Neel: There hasn't been a lot. I kind of follow it just kind of like everybody else does. It is just kind of an interesting thing and if you listen to the show it’s something that is clearly on his mind. You know these cases very little happens for long periods of time. In the eastern district of Texas you typically show up for a status conference. There is very little that happens in court until there is a specific hearing where the judge tries to explain what the meaning of particular patent claim terms are called Marknum Hearing. I don't think there has been any major developments there. I know there was a reexamination request filed and I have not checked on the status of that lately. I know that the Corolla shows been running this fund to try and get some money to develop an evidentuary record or some sort of record to kill these patents.
Denise: Right, as someone involved with the network who is involved in the same type of activities that Adam is. This is near and dear to our heart. I wasn't able to quickly find, I know he wanted to get a legal defense kind of fund going. I'm not quickly coming up with the link to where that is. So if anyone IRC can point me to that we'll mention it here on the show before we get to much further on. Let’s talk about Keurig for a second. This seems to be a patent related issue. If anyone, you know I don't know if coffee purists out there if these Keurig things are just kind of to convenient and awful to tolerate. But they are certainly successful and they are certainly easy a fast. In my opinion make a fine cup of coffee. I am particularly a fan of their espresso machine. That they came out with not to long ago. But hearkening back to some cases in the past about printer cartridges, printer ink and garage door openers. It seems like Green Mountain who has the license to make these Keurig K cups doesn't want people in that game. The expiration of the patent back in 2012 seems to have allowed the flourishing of these various competitors to Green Mountain K cup field. But now Green Mountain is trying to lock that down. Do you have any take on this at all Neel?
Neel: Yeah so these are what are called Razor, Razor blade industries, right. You can talk about it in terms of printers and cartridges, razors, razor blades. Now it looks like coffee and K cups. You know I think this is an interesting case. You know I don't, it is escaping me at the moment, I don't remember how all, there were a number of HP cases that were around. They went very very, I think they may have went down to the supreme court, around the printer ink cartridges. I think this one is a little bit of a tough unfair competition market because unfair competition or any trust claim. Because really people could go and buy a different device or they could just use a normal coffee maker in their house. The big issue to me is, I've bought a lot of coffee makers over the years where they had some specialized filter of some sort. I think that it was pretty common that you would go to the store and there would be 4 or 5 different kinds of filters and there would also be the generic ones. That never really seemed to present much of an anti-trust or competitiveness problem. The fact that they are now putting in some sort of DRM to make sure it is an authorized one. You know I don't see why they’re not allowed to do that as long as they notify consumers that is what they are doing.
Denise: Right, it will be interesting to see this play out. Because I know there is a lot of competition in this field. But Evan you’re just too busy drinking the gourmet Tonks coffee to worry about any of this are you?
Evan Brown: That's right I am much too high-brow. But I can peer over to see what the proletariat are doing with their K cups and examine all this. What a lightning rod issue we have here. It's like come on Kureg, you get everybody hooked on your product and really you know fortify the caffeine addiction that everybody has and then you go and pull a stunt like this. Using DRM like I said what a lightning rod issue here. So what a great scenario factual context to reinvigorate people talking about DRM. By extension the DMCA section 1201, section 1202 you know the anti-circumvention provisions. This hearkens to the, like we were talking about. I think Neel you said HP maybe you’re thinking of the Lexmark cases. I don't know the relationship between Lexmark and HP if there is one. But I know down in Kentucky in the 6th circuit there's been litigation, think may even be still ongoing on some issues. It’s been going on probably 10 years or more about whether or not it is appropriate for microchip technology to allow certain printer cartridges to be used in certain models of printers. There was some litigation about 10 years ago involving Chamberlain the garage door opener technology here in the 7th circuit and it evaluated some similar issues. So I think what is lurking behind all of these discussions is this question of, is the new form of liability. By new I say since 1998, we're looking at the long view of history here. The new form of liability that came about when the anti-circumvention provisions of the DMCA were enacted. Is this the scenario that is appropriate for that liability to be put in place here because ostensibly the idea was that the anti-circumvention provisions were geared to protect means of access and means of copying of copyright protected works. So I guess the theory is here that the DRM, and here is where I am extrapolating, I haven't looked into the particulars of what Keurig has to do here. But conceivably the remedy for circumventing or hacking your new Keurig machine so it didn't work here. The remedy would be among other things, a violation of the anti-circumvention provisions of the DMCA. So the question then becomes is that how we want things to be governed? Is that mechanism? Is it really copyright that should step in and serve as a set of remedies, to provide a set of remedies and impose obligations on the consumer in this context. So with a popular brand like Keurig and a popular consumer product like coffee, if this thing goes forward as what we are hearing, it could really lead to some provocative discussions about anti-circumvention and the DRM and the DMCA in general.
Neel: I think you can also look at it as in addition to the DMCA section 1201 issues as based in some of these computer trespassed statutes. Computer fraud abuse act or California penal code 502C or various things that are really directed towards stopping hacking types of activity. But you know the issue there is would someone have bought a coffee maker think that Kureg still had a proprietary interest in controlling the stuff that was going on their coffee makers. How do you navigate that as far as ensuring licenses and restrictions on use are somehow meaningfully understood.
Evan: That plays into the assumption most people have is when you buy something e.g. a coffee maker it's yours. And you should be free to do with it as you want. There is a certain real hard wired disdain that people seem to have towards that. At least last time I checked that seems to kind of a public sentiment. Maybe folks in IRC can correct me if now we are all good with you know having locked down products that we use and have no real freedom to tinker. As the expression goes and Ed Felton's blog title goes in there. It really seems to touch a nerve.
Denise: Let me look that up on my iPad and I will get back to you on that Evan.
Evan: You’re going to use Firefox on your iPad or something like that.
Denise: Exactly. I do think your both raising excellent points on this and it will be interesting to see where this goes. Like you say Neel, it is just sort of the latest in a long standing theme of people attempting to keep intellectual property control over aspects of their product. That I think the general public thinks should be more open and interactive. So given that we have so many interesting IP issues to discuss even just in this first part of the show. I think that it is interesting to point out and Neel pointed out to me before the show that, what was the stat you sent over? That the United States Supreme Court has more intellectual property cases on its docket this year than it’s ever had in one term since the 19th century. So that's definitely indicative of the political nature and the high profile nature of IP issues just in the public awareness these days. Neel you want to bring us up to speed as to what some of those cases are?
Neel: So one of them actually ties in pretty closely to one of the legislative reforms on patent law that's underway. The real question is, is at what point do you look at a case and say you know this case was really was meritless and the court will say I am going to award attorney’s fees. The case that is at the Supreme Court is actually a trademark case. But the way the legal analysis applies is the same for both trademark and patent cases. The bar was really really high for these sorts of cases to find something exceptional and to award attorney’s fees. What the legislation underway is to really create bigger hammers on fee shifting. What the Supreme Court was confronted with was really what is the right standard that one should apply in order to determine when an award of attorney’s fees is warranted. That's the first case and it is a big one because if the Supreme Court reduces the burden on a defendant for example on seeking an award of attorney’s fees. That's a big hammer discourage patent trolls from going forward or other people from launching meritless patent claims. Because you can get an attorney’s fees award. The next case that's going up there is the lime light case. The lime light case is interesting because many people would argue that the Federal Circuit which is the Appellate Court handling patent disputes. Created a new cause of action for indirect infringement. The way that indirect infringement works is I may not infringe a patent but I might teach someone else to infringe a patent. If I teach someone else to infringe a patent then when I do that I am inducing their behavior. The question the Federal Circuit was confronted with was if there is no indication that someone has actually done the direct infringement. They haven't actually conducted thing in a way where actual direct infringement was occurring, could someone still be on the hook for teaching someone to do it. So to make a metaphor to our normal daily lives, if I were to write a book about how to kill somebody but nobody actually read that book and acted upon it, would I still be liable for some sort of crime just because I wrote a book about how to kill somebody? The Federal Circuit said you can have a claim for indirect infringement, induced infringement, even if there is no indication of direct infringement. They actually skirted over the issues that were originally presented to them. This was considered a really big deal in the patent world. That is was creating essentially a new cause of action. The Supreme Courts addressing whether the law actually requires an indication that somebodies actually done the so called bad dead that would cause infringement or would it not. Or can you just be liable for this indirect theory? In the patent troll context this is a really big deal because many patent trolls sue based upon internet activity. Where you have a client and a server talking to each other and that indirect infringement claim being a very significant part of the litigation. There's some additional bells and whistles around how you find infringement there but fundamentally that kind of what they you know what that case is about. I am trying to pull up my list right now on the other several cases there's one that I can't talk about because we have some involvement in it, called Nautilus. Which gets at some of these functional claiming issues that we chatted about.
Denise: Right, I got your list here. We've got the Highmark and Octane Fitness cases, Lime Light you mentioned, Nautilus you just mentioned. We've got Area which we will talk about in a little while here.
Neel: Octane is the attorney's fees.
Denise: Palm Wonderful LLC that's whether the FDA, whether the Food, Drug and Cosmetics act precludes certain claims under the Lanham act. Alice Corp. which is about patent eligibility of software related patent claims. That sounds fascinating.
Neel: Yeah that's a big one. So the Alice Corp one is there's a big debate over what is actually patentable. When does something move from just being an idea to actually be something concrete. It is implemented in a way that the government should award a patent right to people. It’s called a section 101 problem. Because section 101 of the patent act specifies what you can and cannot patent. The CLS appeal is really directed towards a particular type of computer implemented and whether or not just implementing things that someone could do with a pen and a paper, could be considered patentable. Where someone can get a patent and assert it against other people. This is a really big deal in then patent troll community because section 101 fights are now happening almost as a matter of course in these cases. Last time the Supreme Court was confronted with the question it was a case called In Re Bilski. In Re Bilski they issued an opinion and said sure the Federal Circuit as a test and that test is one useful test but we're not going to give a whole lot of guidance as to whether that is the only useful test as to whether certain kinds of software patents are patentable. Instead we will leave it to appellate courts or the Federal Circuit to decide. Since then you have Federal Circuit cases that come out all over the map on what are the ground rules for these business method kind of types of patent claims. CLS is now trying to come up with a better frame work for what's able to be protected and what's not on these Section 101 grounds. It’s a big anti patent troll case. Tons of people have submitted amicus briefs.
Denise: Right so we will keep an eye on that one and the rest of this flurry of IP cases on the Supreme Court’s docket this term. Let’s see, It's me in our IRC discussion came up with a good comment: Would not all teaching give skills which are capable of infringing patents? So there's a policy discussion that we could throw in that we can't allow patent trolls to shut down the entire education system. We did learn from IRC, thank you whoever gave me this link. Where Adam Corollas crowd fund effort is, it is at fundanything.com/patenttroll. They've raised 77,577 dollars to date, that's really impressive. If you head on over there you can learn more about that campaign. I think now would be a good time to drop in a mcle pass phrase for this episode of This week in Law, let’s make it K cups in honor of our discussion of those fine creations. We drop these pass phrases into the show if you’re listening for continuing legal education credit in your jurisdiction and someone wants you to demonstrate that you actually listened to or watched the show. You can tell them yep I know the secret phrases. The first one for this episode is K cups. If you want more information about getting continuing legal education or other professional credit for listening to or watching This week in Law head on over to TWIT wiki at wikii.Twit.tv and we've got a bunch of information there. With your permission gentleman lets shift gears and talk about some copyright issues.
Neel: I am cool with that.
Evan: Yeah. Same here.
Denise: Good, good. So about a month ago was when we went through all the drama with flappy bird getting pulled from the Android and iTunes app stores. About a month down the road here it’s kind of ironic you know it was never really 100% confirmed that it was some sort of Nintendo pressure on the app creator that because the game resembled Mario Brothers with its green pipes. That urged him to back down and not continue to market the game or even make the game available. I think the owner claims he never marketed the game at all it just became very virally popular. But whether or not there was some sort of Nintendo pressure coming to bear. What was one game that had a vague resemblance to Mario Brothers is now more than 800 flappy bird clones, still out there. I know what I am seeing just sort of anecdotally as I watch kids play is you know how fun it is to find their favorite flappy bird clone. They share it with each other, have you tried this one? No, here try this one. So there has been a flourishing of flappy bird clones that if in fact there was some sort of Nintendo bias against the game. This hasn't improved the situation. There are more green pipes out there than ever. Although a lot of the games I've noticed are getting away from the green pipe motif and finding something else for the little protagonist in the game to fly over. So it’s sort of perhaps Streisand effect example because where there was one flappy bird now we've got going on a 1,000 of them. Neel what do you make of all this?
Neel: Well you know game cloning especially in the app world there's nothing new there, right. I mean there's always going to be new fun game mechanics and when someone finds something cool There is always going to be 10,000 versions I mean you see that even in the movie industry, right. I saw a movie with vampire teenagers come out and all of sudden you have 15 other movies with vampire teenagers. You know I think the issues associated with copycat games is really really challenging. The reason that it is challenging is it's hard to draw the line between what is actually copyrightable and what is a game mechanic. You know Flappy Bird has a couple attributes to it that make it highly addictive games. But that really isn't creative expression that's really a functional characteristic of the game. I think it’s really interesting that once people lock onto a functional characteristic that's really fun. Everyone is going to try and replicate different versions of the same sort of mechanics. How you protect that and how you deal with it is a pretty controversial thing going back 30 years. Back to the days of video games like Frogger.
Denise: Law Wall in IRC throws the comment: Trade dress into the situation do you think that comes into play here when we are talking about games?
Neel: You k ow I've asserted trade dress claims in cases like this before, I think you have to look at how confusingly similar the imagery is in the trade dress claims. So I will give an example just using the Frogger one. In the Frogger game, in the original Frogger game you had a frog crossing the road and all these cars and other things going across different lanes. At the same time in another part of the world someone came up with a game about a chicken crossing a road. It was a chicken with different looking cars and different looking things kind of getting in the way on the road but the chicken was still trying to cross the road. Now while a frog may taste like chicken there is really no other similarity between those games other than the pure mechanic of trying to cross a road with a number of moving obstacles. I don't think that one would have had a trade dress claim because people wouldn't look at the game and say wow that looks a lot like the Frogger game from a visual perspective just a mechanical perspective. If you do that you could say Burger King and McDonald's both make hamburgers and because I can buy fast food hamburgers from both places there's a trade dress problem. That wouldn't work under the law.
Denise: Evan what do you think about all these clones out there?
Evan: Well it gets us down to this really, either it gets us down there or gets us up to this difficult metaphysical question that is presented in copyright of idea expression dichotomy. What is something that is going to be protectable by copyright in as much that it is actually a creative expression of something. Rather than just the ideas of the method and process that's underlining it. A lot of this seems to have to do with how its articulated it's probably has a lot to do with good advocacy whether or not one can convince finder of fact that something truly is an expression rather than just the idea underlying it. It's hard certainly by taking a survey over the body of case law that has developed over this stuff over the last several however many years. Then going even further back into the history of copyright law with all copyright scholars know of cases like Baker vs. Veldon. You know the Blank forms doctrine and those types of things going well back into the 19th Century. It’s hard to really draw bright lines where to separate those 2 elements in the dichotomy the idea vs. the expression. We've got wacky things like the decision that came out in 2012 involving Tetris. There was some litigation over a Tetris clone. If my recollection is right Tetris was found in that instance to have remedies against the clone in that situation. But you know Tetris was copying really the functional aspects of it. So anytime we get into situations like this. Anytime the factual context puts us into the idea of expression dichotomy it’s one of those things where you really got to think, really approach it from an abstract point of view, and really expect to challenge yourself mentally. Getting into the question of what is an expression that will be protected by copyright and what is mirror idea that is going to belong to the general human intellectual heritage rather than someone in particular.
Denise: Just sort of hypothetically thinking this through Neel if Dong Win the creator of Flappy Bird decides that he made a mistake here or maybe this was some sort of strategic decision all along to encourage clones of his popular game to go out there. If he decided all of a sudden that he wanted to get litigious about this do you think you know in a game that was clearly trying to be true to the original Flappy Bird duplicated as closely as possible, do you think he would have a claim?
Neel: I think some creative lawyers could probably come up with a claim and it would really be driven by how similar does the imagery look in the two games. The pure game mechanic from experience is very hard to protect. But the closer that you get to the expressiveness, the kind of artistry of the game the stronger your claims get.
Denise: Right, then maybe Nintendo jumps in as some sort of interested party at some point. Someone in IRC said: Is a clone of a clone of a clone of a clone still a clone of the original? I don't know.
Evan: Wasn't there a Michael Keeton movie about that in the 80's or 90's? I forget.
Denise: Yeah, yeah. It was the one where he's the house Dad.
Evan: I forget what that was called, but it was a good show.
Denise: Let us move on, speaking of good show. Oops, Goodness gracious what did I just launch.
Evan: Sounds like a good show.
Denise: Oh, I know what it is. I clicked over to a new tab and Googles little animation that they have up today in honor of International Woman's day started playing. That is a good one if you haven't checked it out yet.
Evan: Thanks Alex. Multiplicity was the film we were talking about.
Denise: Multiplicity, yes. Getty images did something pretty smart. They obviously have a business model designed around having people pay them in order to use their vast library of stock photography. But they have also decided, I guess they acquired one of these, it's call pic scout. It is one of these web tracking applications that allows you to find your images when they appear online. Rather than trying to use that to go after everyone who is making use in an unauthorized way of Getty Images. What they found, Craig Peters a senior Vice president at Getty is reported to tell Bloomberg Business week. They've found 10's of millions of unauthorized Getty photos and instead of looking at an issue they've decided to look at it as an opportunity. Their making an imbed tool available. So just like you can imbed a Youtube video and there are ways doing that is commercially lucrative to the person who made the video and posted it up. Whether it has just the effect of spreading the word or whether there's actually advertising imbedded. That's the route that Getty is headed down. They’re going to go ahead let people imbed Getty Images for non-commercial purposes and take advantage of this rather than try and put an end to it. In fact this same article at Bloomberg Business week points out that Getty has only filed 7 copyright infringement lawsuits in the past 5 years. Out of those 5 were filed just this January. Presumably they're going after unauthorized commercial use of their images since they seem to think non-commercial use is okay. So Neel do you like this strategy?
Neel: Yeah I do. I do like this strategy. I think, I call these kind of DRM although its not exactly. But you know this sort of technology is really helpful. I think it allows people work in ways that are more collaborative and less shake down feeling. And it opens up a whole raft of new monetization options that kind of align copyright holders more with the internet. Because you know historically they've been quite hateful of each other.
Denise: Right, it's great to see something like this come along obviously imbedding photos is nothing new. Flicker has been doing it for a long time. Also Flicker integrates with Creative Comments. But to a big commercial entity like Getty decide this is the way to go means there is something to this business model, I think. You agree Evan?
Evan: Well it could be there is something to it or it could just be it is less expensive than the alternative of sort of being the more formalized copyright troll that Getty has been for years. Denise you may have ran into this situation, Neel maybe you as well, a lot of. You know Getty has sent a lot of cease and desist letters and demand letters over however long. I have dealt with a lot of clients who have received them. Wanting a modest settlement fee which usually is in about the same dollar range as what Prenda Law would demand for trading a movie by a bit torn. So it is a nice little economic threshold where it’s going to be cheaper to settle than it is to try and fight it. Especially given the heavy handed remedies that statutory damages afford someone. So you know, it’s easy. There is some currency in it for Getty to look progressive and that they understand and they are adopting the way that the technology is the way that people want to use to share images and that is fine. I’m sure they don’t not intend to look good and with it. But at the same time it’s clearly going to be something that was motivated by their bottom line. And I suspect that it just had more to do with recognizing that being as aggressive as it was toward non-commercial use wasn’t paying off and so here is something to fill the void of no longer doing that.
Denise: One of the ways that is may get Getty more business is pointed out in this Bloomberg Business Week article by Joshua Bruenstien, who hones in on the non-commercial use aspect and how murky that can get and speculates that perhaps if you’re in one of those grey areas you would cough up and pay for the images just to buy that certainty. He says, “In an internet chock full of self-promotion, obscurity can turn to fame in a matter of moments, what happens when an individual brand or blog becomes a business in and of itself. Unclear.” Neel, do you think that non-commercial distinction is going to be difficult to pin down?
Neel: I think it is always difficult to pin down. I think it is always difficult to pin down particularly in the way that our digital lives are developing, where we have iPhones that are scrambled between work related stuff and personal stuff. I have lots of work colleagues are friends of mine on FaceBook as well as people that I would never in a million years work with. How do you define when something is transcending from commercial to non-commercial? Sometimes I’ll put up information in an status update of something that I’m proud of but I don’t want my friends to see it because they are my friends, but I want my clients to see it because they are my clients. It is hard to say whether that is a commercial or non-commercial use.
Denise: Do you think this is going to be troublesome for folks using these imbeds, Evan?
Evan: Well, yeah. I mean there’s not something that is going to be unique to this situation. We talked about this before. What does it mean for something to be commercial and something to be non-commercial? That is just a consequence of the way that the means of publication on the web, the means of expression. You know, social media, the category of things in which social media fall. The tools that we have. It just makes it difficult to draw that distinction. There is not a real distinct change in status when you are at work versus not at work anymore. I think it is a cultural shift and a technological shift as well. There could be some interesting factual pursing to be done. It does play into the recent decision, I notice in our show notes and I don’t want to take this in a direction that you don’t want to go, Denise, but it is relevant to a recent decision of the US District Court here in the Northern District of Illinois talking about the protect ability under the Lanham Act for a person’s personal brand. There was a recent decision where the court threw out an Lanham Act claim where an employee had claimed that her employer wrongfully accessed her FaceBook and Twitter account and she claimed that messed up her personal brand and the court said, “Yeah. There is a protectable interest in your brand here and we’re not going to let your Lanham Act claim survive because you haven’t shown the right kind of damages”. But on that issue of whether or not there is this sense of an individual and their online activity, having a commercial value, courts, at least one court and I’m sure there’s other in different contexts are willing to recognize that as a principle.
Denise: Yeah, that is a fascinating case. You wrote it up at your blog Internet net cases seven. I think it's got a lot of nuances to it. Maremont versus Susan Fredman Design Group. One of the things that comes up for me it's what happened here is that the plaintiff was out from work, she had a brain injury that she suffered in a work related car accident so we're getting all kinds of personal versus work crossover here, as she is out in the hospital. And then for some reason, and maybe you can shed some light on why the employer decided it was a good idea to access and Post to her Facebook and Twitter accounts? Was she engaged in posting things that were related to the company and they didn't want that to lapse while she was out or what was going on here?
Well, I think that’s probably something that’s been within the scope of those things that are genuine issues of material fact that allowed the stored communications act to continue to trial. Of course this happened in 2009, almost 5 years ago now, and we've gained familiarity to social media now and have an easier hand at talking about these things now. But back in 2009 it was a much more of novel idea of what is a business’s… what opportunities do businesses have to capitalize on social media. So there appear to be some disputed facts as to whether or not the employer asked her to set up the Facebook and Twitter accounts. Another thing that makes the facts disputed, or something that a finder or fact needs to wort out on a summary of judgement, is that she had her usernames and passwords on a spreadsheet that she said was hidden on the computer somewhere and certainly not intended for everybody to use, and I think also printed out in a locked drawer. So, there is this question of whether or not the employer was authorized to do that. The employer, of course, says this was our thing, we were directing the employee to do this. So on this layer of discussion about the interface between the employees social media activity and the employers social media activity, it sounds a little bit like the issue with Noah Kravitz, remember we had him on the show a couple of years ago. I forgot what his twitter handle was. This whole issue involved trade secrets, it involved the monetary value of a particular Twitter following, the rights of publicity. It is really surprising that there haven't been more disputes about the employer employee interface over this. This one from the Northern District of Illinois has been percolating for several years and there has been a round of some summary judgment motions. But we still don’t have a whole lot more clarity on that. So as long as there is going to be this non-understanding of what the relationship is between the employees activity and how much that is supposed to inure to the benefit of the company.
Denise: Right, he is Noah Kravitz, with an I, on Twitter. He was sued by his former employer, he was working for a site called PhoneDog and was blogging for them. He was sued by his former employer, contending that his Twitter followers were worth $2.50 each and that he should pay the company that amount for taking them with him when he left or something like that. So yes, dig into the TWIL archives and find out more about Noah if you are so inclined. We have a bunch of updates and one new night circuit decision to discuss on the Hollywood and entertainment front. One of them is the Aereo case we alluded to earlier, one of the many pending before the Supreme Court this term, set for oral argument the end of next month. The update in the Aereo case, not that anything has been forthcoming from the Supreme Court yet, but people are finally seeking briefs and that the partisan issues in this case are lining up. April 22 is when the oral argument is, I'm sure that will be a well-attended one. But the update is that if you are in Denver or Salt Lake, which were two markets that were being serviced by Aereo, your Aereo service is now no longer available thanks to a District Judge in Utah, who lined up on the side that Aereo’s re-transmission was a copyright infringement. So, the 10th Circuit now joins those parts of the US where Aereo is not available and that will remain the case unless the Supreme Court comes in and says otherwise. Neil, have you been following this Aereo case and do you have any thoughts as it winds towards oral argument in the Supreme Court?
Neil: Yeah, you know this is one where we actually, I just learned this shortly before the show, we've submitted an amicus brief so I probably shouldn't comment on this one. All that I will say is Aereo is on the right of truth and justice everywhere.
Denise: Okay well that pretty much sums it up. Evan?
Evan: Well we can temporarily find what value from this injunction that affects those jurisdictions in the 10th Circuit. I trust that, I mean I think it's safe to say, when will the decision from the Aereo come out, I mean if the arguments are in April the decision will probably come out sometime in the fall, right? So it seems at that point whatever has happened here in the District Court is going to be here irrelevant. But, it underscores, though the trickiness of this task of figuring out what the transmit clause means, you know the whole definition of publicly performed a work. You have some really really smart people disagreeing on what that means. I suppose a big reason for that is that when it was drafted many moons before the technology that affords us to even envision things like Aereo, it was long before that existed. So it is no mystery that there ought to be some difficulty in seeing how the transmit clause, that definition in the copyright act should apply here. I always think there will be consequences one way or the other, regardless of how the Supreme Court ultimately comes out here. It could be the end of over the air broadcasting as we see it if the networks hold true to their threats of pulling content away from open access like this, or there could be some legislative activity to clarify what this means, what the transmit clause means. I don't say this lightly and I try, at least nine times out of 10, to say that something is not of much consequence, but I think that we can say there could be something watershed that ultimately happens from the way the whole Aereo situation turns out because of this anachronism we’re seeing with this law and the way technology stretches it.
Denise: According to the Supreme Court, and I had to look this up too Evan, they don't have a set time period in which the Justices must reach a decision unlike some other appellate courts around the country. So after oral argument they are sort of in a limbo state, they say on their site no one knows exactly when a decision will be handed down by the Court in an argued case. But they do say that all cases argued during a term of court are decided before the summer recess begins, usually by the end of June. So that would be a pretty quick turnaround if they are arguing the case on April 22. We will have to keep an eye on that and see what happens.
Evan: Maybe they already know what they're going to say and the clerk already has a draft of an opinion because it is sort of weird that they took this in the first place. And it was weird that Aereo argued to go up there so who knows maybe we shouldn't try to read many tea leaves at all based on the past as to what it will look like.
Denise: Okay, a couple more updates on things we've been following related to copyright law in the entertainment arena. Six Stripes, the copyright alert system turned one last month. We really don't know too much about it, people on the CCI side say it's doing a great job against piracy. If you go over and read the torrent freak story on it says we're not seeing any evidence that there is more revenue being being generated by the entertainment Industry now that this is in place. So it's kind of a wash. But we do know that sever hundred thousand notices have been sent out at least by one of the ISPs so we’re still waiting for eta to be able to analyze the efficacy of the CCI. But it's one-year-old. Neil do you have any take on it?
Neil: I haven't had a lot of clients come and talk to me about receiving these sorts of notices and how they deal with it. I think it's a reasonably good idea and I'm all for figuring out ways to have people get along when it comes to online activity, given the difficulty. Beyond that, if it seems to be working then I think people should keep doing it. But it isn't a situation where I hear a lot of clients saying, to me at least, that this is over-the-top, this is killing business and making us do a lot of stuff.
Denise: Well that's good to know. Evan, have you ever had a client come to you with a copyright alert system notice?
Evan: No. Nor have all the torrenting I do from home gotten one for myself.
Denise: That’s good.
Evan: I’m just kidding about that. Of course CCI is going to say that it's been a good thing because to say otherwise would be an extenential threat to it if it's ineffective after a whole year, what is the whole reason for being. So I guess we can step back and look at that and stones at it and pick nits at it however much we want to but really we're probably just rehashing the same fundamental objections that we may have to it or the fundamental supports that we may have for it, absent of what CCI is going to say about its own efforts. From one perspective it's better than the litigation that the content industry was engaged in 10 or 11 years ago. You know the mass lawsuits against individuals accused of trading content through peer-to-peer networks online. It's better than that. Then there are things we don't like about it but again these are just the criticisms and the commentary we would have regardless of what they're saying. We could see why the content industry may like it and the reason for consumers not to like it because the content industry is getting a real boom here to have some of the expenses of these administrative costs, some enforcement and monitoring and policing shifted over to the ISPs. And who’s paying for that? I've got some news for you. You know who's paying for that. It always comes down to the consumer. So those are just the same critiques we can have and I think what we have an announcement from CCI as to its success, without any real data to go on we just go okay fine whatever and we just rehearse the same commentary we have about it that we've had about it from first hearing about it a couple years ago.
Denise: Right I'm still very anxious to find in the wild and talk to you or read about somebody who has gone through the appeal system. You know where they had mandatory arbitration if you're challenging a notice. I anecdotally have not heard of anyone who has done that yet. So if you’re that person or…
Evan: You can't afford the 35 bucks.
Denise: So I'd like to hear how that is working. If it's working.
Neil: No one has actually had to deal with responding to one of these, or investigating or handling one of them. That’s often the people who can claim the most success, right?
Denise: Right. Okay another quick update on something that we covered last year. And that is, remember Professor Lessig’s open video where he’s showing all the clips of people mimicking a scene from The Breakfast Club to the song Lisztomania, and he uses that to illustrate a point in his lecture that he actually was sued for that by the Australian entity that holds the rights to that particular song, Lisztomania. He got EFF on his side and litigated it and fought it and was arguing in the case an interesting aspect with with this case was a section 512 S case where they were claiming that the DMCA takedown notice was not, as Neil was talking about earlier, well thought through. And that as a result under the statute some penalties shall apply. The update there is that Professor Lessig and liberation media, is the Australian music label that owns the rights, to that Phoenix song, Lisztomania. The parties have amicably settled this case. The settlement is, I don't think the amount has been disclosed, but some of the terms have. Liberation is updating their copyright policies with respect of fair use, EFF is getting some money that it’s going to dedicate to supporting its work on open access.
Neil: I think it was $100 billion.
Denise: I don't think it was that much! I wanted to bring you up to speed on that in case you missed it. I think we were much amused by the fact that someone would send a DMCA takedown notice to Professor Lessig and expect him not to fight it to the fullest extent possible. Neil, any thoughts on this?
Neil: I’ve always kind of wondered if maybe it was a set up. They wanted to get an issue out there. But that's the conspiracy theorist coming out in me.
Denise: Who doesn't love a good conspiracy theory? Let's see I think that's all our updates on this Hollywood entertainment section. What we haven't talked about yet and I'd like to especially because it kind of plays in, at least within IRC comment, to the Getty story we discussed. Somebody in IRC asked if Getty had gone ahead and gotten releases from all the stock photography models, which is another issue that we talked about on the show before when that has come up. This Innocence of Muslim’s film has that kind of issue involved and resulted in a very strange Ninth Circuit decision that I have yet to sort of square up in my own mind and come to terms with. The impact here, the Ninth Circuit decided that an actress in the Innocence of Muslim’s film had the wool pulled over her eyes. I want to say it was kind of a fraud in the inducement kind of problem here where she thought she was acting in one film, her name in the case is Cindy Lee Garcia, she believed she was acting in a film called Desert Warrior and not this very offensive film that became the finished product, and has raised a lot of ire around the world. So what the Court found was that she never validly gave a release or consent to being in this film. So she therefore retains a copyright interest in her performance, and could validly send a DMCA take down notice and have the film removed. Now, Google is very up in arms about this and filed an emergency motion, I believe was denied although they did get confirmation from the court that if they edited out the plaintiffs performance then they could repost what was previously on YouTube. Have you guys taken a look at this and Neil have you managed to wrap your head around it yet?
Neil: It is one of those cases of bad facts makes unbelievably bad law. I can hardly think of it any other way. I think there were some real troublesome facts in this case that drove an outcome but I I can't imagine the broad reaching legal principles that people are holding it out for will ultimately stand up. The entertainment law firms around here that are doing transactional work they are alI really excited and happy because it means they are going to generate a lot of billings by having to go out and get new documentation on releases.
Denise: Yeah, exactly. A little cottage industry there. And I know Professor Goldman thinks this is one of the worst things to come out of Ninth Circuit in a very long time. It is authored by Chief Judge Kaczynski who’s is usually kind of spot on in his analysis or at least entertaining to read. I think this was a struggle for him though. You have any take on this?
Evan: I think we all need to be a little bit careful about our indignation that comes out of this and we need to be critical about the indignation of others when we are talking about this case. You know immediately everybody was saying, “Oh this is awful, terrible miscarriage of justice, blah blah blah, Judge Kaczynski made a big error” and all this. I really think that if we're going to be angry with anybody in this situation where bad facts made bad law, we don’t want to be angry at the Judge, or be angry at the Court, the Ninth Circuit. I think that the Ninth Circuit might very well have come to the right conclusion here. You know, let’s not be so quick to join in with Google’s indignation about this because you know, sure, Google is awesome and all that, and Fred is our friend. The copyright boy over there and all that. But at the end of the day, Google doesn’t give a rats behind about copyright issues. But except to the extent that it is going to affect their bottom line. They don’t want to be troubled with having to deal with the administrate of actually police taking down a greater number of audio visual works that what they have to already, based on claims like this one that we see here where it is one participant in a work. There is this question of whether or not it was a joint work, whether or not she can claim authorship in the whole thing. The person we need to be angry about here, and this isn’t the only context in which I guess people have been angry at him, is the Director or Producer, whoever it was that failed to go through the formalities of doing it the right way. Of playing by the rules of the game to make it clear that the copyrights rights are transferred from the participant to the Producer, the one who is actually going to be trying to exploit those rights. So, sure we can lament this, it’s lamentable. But we need to be careful in articulating why it is lamentable and unlike many other commentators, I don’t think it is lamentable because of what the Court did. I think the Court did the best it could. Judge Kaczynski, I can’t point to where he was wrong in his analysis. Shouldn’t be angry at the actress, you know she has, whether we like it or not, we have intellectual property rights in this country. I think most reasonable people would do the same thing if they were receiving death threats. We can kind of be skeptical of Google’s motives and all of its hand waving and hand wringing in all this, but let’s keep in perspective why they are doing that and ultimately their interests are the same as ours and let’s not let that cloud our real judgement as to how we should think about the substitive copyright issues.
Denise: Neel, do you think that before the cottage industry of making sure releases are more ironclad than they maybe have been in the past, takes hold for the body of films that exist today. Do you really see that this case is going to result in a flood gate opening of plaintiffs saying, “Hey that film didn’t quite come out the way that I thought that it would and so I’m going to assert my copyright interest as well”.
Neel: Right. Anyone who has ever won a Raspberry award for making the crappiest film of the year all of a sudden wants to take it offline right? So, I think Evan is right. You know at some level there is also going to be a whole group of people that are going to go and look through whatever their agreements are and see if they have the same problems that the agreements here had. And maybe they do, maybe they don’t but it does seem like there is going be some studying of “Can I even assert a claim here in light of what I’ve already given up for the deal”? And I don’t think there is going to be a floodgate of thousands and thousands of cases but there will probably be some. You might see a slight uptake of the number of DMCA notices sent out and things like that. But I’m not a fan of the decision. I think it overstates some of the law. I think that it’s going to be limited to its facts at some point. But I don’t think that we’re going to all of a sudden see thousands and thousands of new claims raised under the somewhat scurried fact pattern.
Denise: What is Google’s argument to the Supreme Court for cert going to look like since we don’t have a Circuit Slip?
Neel: You know, I don’t represent Google so I can talk about this. I think Google’s cert petition is going to look something like, at what point is somebody’s contributions merely a contribution and you’re looking at the copyright work as a whole. And where does the proprietary interests of an individual in these much larger compilations? These sorts of issues have garnered some interest, they actually started when people started talking about things like music sampling and rights, existed music sampling when you might have 300 samples of different songs in a particular song of some sort. But I’m not sure the Supreme Court has really been confronted with that question before, you know, how is it that compilations work and you have an actor whose performances only being recorded in tangible medium by somebody else who has a proprietary interest. How does that work? It is something that the Supreme Court could find interesting as far as where is the copyright interest begin and who holds it?
Denise: Alright. Well, a couple of fun little things here at the end. I know from having listened to you on Adam Carolla, Neel, that you were involved in the FaceBook litigation against the Vinkle Vi, I thought it might be fun to check in with them and reconfirm that their faith in BitCoin is strong despite the Mt. Gox bankruptcy and folding, etc.. that happened. I understand too that they are buying tickets to space with BitCoin.
Neel: I read that story too. I personally and you know, I’ll just say this. I always thought they were kind of out in space, but you know, BitCoin is going to have it’s roller coaster ride, right? I mean it is an unregulated thing and some people are going all in on it, I think the Vinkle Vi have more or less gone all in on it. I can’t say I really understand BitCoin but it is a pretty awesome thing that they can use BitCoin to buy tickets to space. I can’t say it any other way. It’s a pretty cool thing.
Denise: The internet exploded at that point.
Neel: Right. My head exploded too. That is for sure.
Denise: But the other thing that I loved just about this duo of stories is the whole, I don’t know if you guys saw John Stewart on Mt. Gox when it began to fold, but he did a hysterical segment on it, and pointed out that Mt. Gox actually started life as the magic, the gathering, online exchange. So, it did a little pivot there into training in BitCoin. We’ve got drones that a judge had ruled legal, commercial drones. Sort of leap frogging the FAA who doesn’t plan to promulgate rules on that until 2015. There is a story on that by Adrian Jeffries over at the Verge, talking about the dismissal of a $10,000 fine levied by the FAA against a Swiss drone operator who used a camera drone at the University of Virginia campus for commercial purposes apparently. Getting back to our commercial versus noncommercial difficulty. So there is that that perhaps Courts are going to undo FAA regulations against these ,things. Here we at least have one Judge that feels a fine should at least be tossed out. Evan can I call up Pizza and get it delivered by done tonight?
Evan: I mean if you can’t even deliver beer to ice fisherman, I think we’ve got a few more hurdles to cross in this. I was a little confused about what was going on and whether this was a story or a non-story because the whole thing of the court was what FAA regulations were in place at the time of the incident. I didn’t go ahead and get to the bottom of it but I got the suspicion that this was more an alignment of timing and what was there and it wasn’t necessarily tantamount to a repeal of the FAA’s orders. I should just leave it at that and not perpetuate anyone else to have any misunderstandings about it. I get the sense that there is a little bit of a technicality here that is maybe not going to make this as breathtaking as we hoped it would be.
Denise: Yeah, I have the feeling you’re right. And Neel, you’re right there at Start Up Central in Menlo Park do you get a lot of people coming in to the office saying, “I really want to start delivering things by drone, when can I do this?”
Neel: So there is this one company I love. It is a company called Any Bot, I don’t know if you guys have ever talked about them online before but they have these little drones that act as this Receptionist for offices and so when you walk into the office it has a face but the face has a screen with a person’s face on it that is like some really, really far location away and this, I call it a drone, but I’m not exactly sure what you would call it. But it greets you with this face of a person who, God knows where, and it escorts you through the office wherever you’re going to go. My immediate reaction when I saw that was, “I really need one of those”.
Denise: Did you see the episode of Big Bang Theory where Sheldon had a ShelBot? He hung out in his bedroom and sent it to work, etc…
Neel: You know there are a lot of people trying to come up with new and better ways to facilitate localized delivery. Whether it is through drones or, I heard a rumor that Uber was now having an ice-cream delivery service, I don’t know if that is true or not. But basically the Uber drivers when they are not doing anything they can pick up ice cream and bring it to your house. I don’t know if that is true but that is what I heard.
Denise: If it is not true, then they must do it. That is just the best idea I’ve ever heard!
Neel: It is pretty awesome. And so we hear lots of people talking about these sorts of things. I’m not sure that I’ve seen a whole lot that is ready quite yet.
Denise: One other California decision that I’ve been meaning to point out because we point out a lot of driving technology, whether you can drive with Google Glass and other things. A California Appellate Court has held that someone looking at the maps on their phone that that was okay, that didn’t violate the distracted driving laws in California. Now California has a separate, you can’t text and drive law. But the Court seemed to think that these laws were in acted before phones were able to do all of these other functions besides simply making phone calls. And here is the poll quote: “Had the legislature intended to prohibit drivers from holding the telephone and using it for all purposes it would not have limited the telephones design and configuration to hand free listening and talking, but would’ve used broader language. Such as hands free operation, or hands free use”. So it went on to conclude that you're needing to navigate by looking at a map on your phone, at least according to this California Appellate Court that is okay in our state. So I thought that was interesting because we seem to see more and more a move for Courts and legislatures to want to keep people away from their phones in the car and this seemed to be a loosening of that. Neel did you take a look at this?
Neel: I did and I kind of thought of it as some old guy in his car saying, “Well what is the difference between me using a map on my phone and just using the navigation system in my car”? And it seems to be over-reaching to say that you can’t pull out a device that you might mount in your car. I thought there was an element of that in the analysis. Oh please people use navigation systems in all sorts of different hand held devices, what is so magical about a phone that makes us want to transform and stop people from talking on the phone whether it is through typing or actually talking live. In the way that they are distracted in a utility that exists in cars today and has since before these phone functionalities existed.
Denise: Do you think this is just an example of California being crazy and we shouldn’t encourage people to be distracted?
Evan: Yeah, thanks for just going ahead and saying it for me. If I got into the nuances of every little crazy little thing in you all in California in your legislature, it would be way more messed up than life is already for me. It is a situation where the laws have to continue keep pace with technology enact definitions and restrictions that are meaningful in terms of how things are advancing and the more gadgets we have, I can do more things.
Denise: So we’ll make California crazy. We’ve got a telepresence Bot roaming around the studio!
Leo Bot: Hey, what is your name?
Josh: Josh! I work here!
Leo Bot: My name is Leo Bot.
Josh: It looks like you are actually right here!
Leo Bot: Yeah! What are you doing?
Josh: I’m just hanging out, you know. Editing.
Leo Bot: Show me your editing booth.
Denise: Was there an echo because he was just right over in his office as the Bot was rolling around, Alex?
Alex: Yeah, that was it!
Denise: Yeah, that was it.
Neel: I need one of those to go to Court for me sometimes!
Denise: Yeah! Maybe someday, you never know. California crazy will be second MCLE pass rase for this episode of This Week In Law. And we will move on to our tips and resources of the week. Evan, we’re going to make the tip another of your posts on internet cases having to do with confidential settlements and what one should do after one has been entered it a confidential settlement, that is. And having one’s daughter go on social media and say, “We won, so suck it” is probably not what you want to do.
Evan: No. This is one of those stories about social medial that people love hearing and seeing the misfortune of others. There is going to be some interesting family dynamics to work out here. But as you were saying, long story short version of it is that Dad reached a settlement in a lawsuit that had a confidentiality provision that allowed him to disclose to his spouse and if he violated the confidentially provision he has to forfeit $80,000 of the settlement money. Well within a week of the settlement agreement was signed the language of the court was, the ink hadn’t even dried on the settlement agreement yet, the college age daughter posted something like, “Momma and Papa won big against Defendant so Defendant is paying for my European vacation this summer, so suck it” and so they saw that and you know, the Defendant brought that to the attention of the court. I guess the way it got to the court is that the Defendant refused to pay so the Plaintiff then brought it to the court trying to enforce the settlement agreement and the court said, “You violated the confidentiality provision and we’re siding with the Defendant here”. So the iteration of the headline is FaceBook post costs Dad $80,000. People love that stuff! It’s even gotten some attention in the mainstream media. So the tip is, keep your mouth shut.
Denise: Kids in social media. What are we going to do with them? You said you’ve handled cases Neel, where folks have wound up in Juvenile Hall for their social media posts?
Neel: Yeah, I probably shouldn’t talk about the Juvenile cases but certainly it’s amazing how social media posts are thought to be confidential and they are not.
Denise: It is just a recurring theme on the show, it comes up over and over again.
Neel: I think it is just a very ironic thing that when folks are taking pictures on their phone and putting them online somehow they think they are not taking pictures of themselves and putting them online!
Denise: Right. The resource of the week that I pulled out is from our friends from the EFF, it is there legislative solutions for patent reform. It’s a whole sort of premier if you are someone who is interested in patent reform it is things they think are a good idea. Things that show up in various ways in the transparency bill that we discussed on today’s show, also in the innovation act things like fee shifting and user immunity, transparency, disclosure, effective post grant review of patents and functional claiming, which Neel was discussing. So if you want to learn more about what those things are and why they are a good idea as far as patent reform is concerned, EFF has a nice guide to that. Neel, anything to add?
Neel: Yeah, just one thing to add to is that you know there are a lot of really good blogs out there about various things going on in the IP world. For people that follow these sorts of things. The EFF obviously has a lot of resources for their advocacy that are terrific, Patent Leo is another one that is really popular. There are a couple other really good ones that are particular jurisdictions like the Eastern District of Texas and Delaware. My firm runs a Trade Secrets blog as well as an IP specific blog for the Northern District of California, which is where we live, as well as Central District which is Los Angeles. Those are other helpful resources in addition to some of the stuff that the EFF has out there.
Denise: Right. Interesting that you say
that someone would do a blog on just the Eastern District of Texas but there’s
at least one of those the one and I’m sure probably a
few more covering that particular hotbed of patent litigation. Keep an eye on
that. For the EFF guide and all the other stories that we’ve talked about
today, our list of those things for you to come back and refer to is at . And with that we are going to
go ahead and wrap up this show. It’s been great having this wonderful and wide
reaching discussion with you, Neil Chatterjee. Tell us what is going on at
Orrick and in your practice group these days that you might want people to know
more about. We’ve got your Trade Secrets blog, anything else?
Neel: Well, yeah. We’ve got two other blogs that we run. The Northern California blog and the Central District of California which are really reporting on IP decisions out of our area, or one of our areas which is Northern California and Southern California. I appreciate the opportunity to be on the show today. It’s really been a lot of fun and it’s always fun to talk about internet stuff and patent law stuff. We are doing some of the stuff on the forefront of patent law and internet law so there is a lot of interesting things coming down the pike. I could tell you about it, but I’d have to kill you. So stayed tuned and hopefully you see us in the news!
Denise: We’ll look for you in your Viking helmet and your Spam can and/or hammer to light the way for us!
Neel: You can find me on Facebook too, as I do view that as a competition so I always welcome new friends!
Denise: Do you get special dispensation that you can have as many friends as you’d like?
Neel: They don’t give me special dispensation but I still have a ways to go on the cap unfortunately, I think it is because I just don’t have as many friends as I’d like!
Denise: Aw. We’ll try and do something about that! And you can make up for Evan who’s not on FaceBook at all. So you can have all his friends.
Evan: You can think of me driving my horse and buggy while your’e on FaceBook!
Denise: Yahoo! And not looking at your phone for directions at the time!
Denise: So great chatting with you Evan, as usual. Anything going on with you these days that we should know about?
Evan: Just you know, thawing out, getting ready for spring here. Got a couple of conferences and events at the Chicago Bar Association. Assuming the Mt. Gox doesn’t do away with BitCoin altogether, I’m going to be speaking on BitCoin in June so I’m getting my foundation set for that. So other than that, just kind of you know, spending a lot of time in the salt mines trying to help clients and all around doing the right thing. It’s a good life.
Denise: Yes, toiling in the vineyards of justice, as one of my old partners used to say!
Evan: I like that better. Little different connotation than the salt mine.
Denise: Keep stomping the grapes and we will be back here next week, Evan and I, with new guests for you to become edified from. That’s going to be at 11:00 Pacific time, 1800 UTC. That is when we record the show live. If you can’t join us live, don’t worry about it. You can go to twit.tv/twil and you can find the episode that we are recording here today and all of our past episodes there in the archives. If you are a YouTube person you can find our YouTube channel at . You can subscribe to us in iTunes and in any other way that you like to consume this kind of entertainment. And what else? We definitely love for you to get in touch with us between the shows, that is how we learn about new and interesting thing people who Evan and I might not be acquainted with already, who we should have on the show. We love your suggestions for guests and we love your suggestions for topics and your feedback and critique of things that we have already discussed on the show. So either email us. I’m and Evan is or go on over to FaceBook where you can friend the This Week In Law show at the same time that you are joining the Neil Chatterjee posse, we’ve got a page over there also on GooglePlus where we hash out issues before the shows. So, we really appreciate your joining us today and every week on This Week In Law. We have a blast looking at all these issues that just never seem to go away. Technology throws a wrench into the law and vice versa. It is our great pleasure to try and make heads or tails of it. so we are glad you’ve joined us here today doing that. We’ll see you next week! Take care.