IPPro The Internet issue 85 by IPPro The Internet

ISSUE085

16.02.2016

w w w. i p p r o t h e i n t e r n e t . c o m

The primary source of global intellectual property internet news and analysis

Federal Circuit nips it in the Rosebud Adobe Systems is not liable for preissuance damages because it had no notice of a competitor’s patent, the Court of Appeals for the Federal Circuit has ruled. The Federal Circuit ruled on 9 February that the software company is exempt from pre-issuance damages due to a lack of knowledge of Rosebud’s patent under Section 154(d) of the Patent Act. Section 154(d) of the Patent Act provides for damages for infringement that takes place before a patent issues, as long as the infringer had actual notice of the published patent application.

MPAA and Donuts to take on infringing domain names together

The Motion Picture Association of America (MPAA) and domain registrar Donuts have partnered up to fight piracy.

If Donuts discovers that the website is engaged in illegal activity, it will either hold or suspend the domain.

The MPAA and Donuts, which operates hundreds of TLDs, will work together to ensure that websites using Donuts domains are not engaged in large-scale piracy.

Jon Nevett, co-founder of Donuts, called the agreement a “groundbreaking partnership”.

Under the agreement, the MPAA will be treated as a “trusted notifier” for reporting large-scale pirate websites that are registered in a domain extension operated by Donuts. Referrals must be accompanied by clear evidence of pervasive copyright infringement and a representation that the MPAA has first attempted to contact the registrar. Donuts will then work with registrar partners to contact the website owner.

Rosebud, which produces PDF software like Adobe’s Acrobat products, has served its competitor with three suits for alleged patent infringement. Two previous cases, beginning in 2010, have been dismissed.

Continued on p2

DOJ watching SEP holders The US Department of Justice is growing concerned about standard essential patent (SEP) holders evading their licensing commitments.

“As the operator of .movie, .theatre, .company and almost 200 other domains, Donuts is committed to a healthy domain name environment and this is another step toward a safe and secure namespace,” added Nevett.

In a speech given on 5 February at an anti-trust event in the US, attorney general Renata Hesse said the US is concerned when SEP holders “seek to exploit their market power by evading the licensing commitments they voluntarily made”.

“This agreement [with Donuts] demonstrates that the technology community and content creators can work together to help ensure legal digital marketplaces that benefit all members of the online ecosystem,” commented Chris Dodd, CEO of the Motion Picture Association of America.

She said that the US does not want to impose unnecessary barriers, but reward SEP owners. The attorney general said that if a patent becomes commercially important “we don’t impute fair reasonable and non-discriminatory (FRAND) commitments”. Continued on p2

Latest News Federal Circuit nips it in the Rosebud Microsoft and GoPro Continued from p1 wearable technology In February 2014, Rosebud sued Adobe at the District Court for the District of Delaware, alleging infringement of a patent covering techniques for enabling collaborative work over a network of computers.

agree

Microsoft’s technology licensing arm has signed a patent licensing agreement with camera maker GoPro.

Under the new agreement, GoPro has access to certain file storage and other Microsoft Rosebud sought an injunction and damages, system technologies. but Adobe filed a motion for summary judgement on the basis that the patent-in-suit Microsoft announced the deal with the did not issue until after its accused product versatile camera maker on 5 February. No was discontinued, and that it wasn’t aware of other details were disclosed. the patent application. “This agreement with GoPro shows the The district court backed Adobe and granted incredible breadth of technology sharing its motion. enabled through patent transactions,” said Nick Psyhogeos, president of Microsoft Rosebud appealed against the decision on Technology Licensing. The Association of American Publishers urges the basis of pre-issuance damages, but the Federal Circuit affirmed the district court “Microsoft’s licensing of personal wearable the US government to further engage with ruling in Adobe’s favour. technologies is seeing strong demand as we Canada and China over their copyright laws p4 partner with companies from all industries to DOJ watching SEP holders optimise solutions for their customers around Continued from p1 the globe.” Ericsson launches a patent licensing platform But once certain patents become more Microsoft signed a patent licensing agreement aimed at accelerating the development of the valuable and adopters are locked into the covering wearable devices with Olio Devices ‘internet of things’ standard, Hesse said the competitive process at the end of January. p4 suffers and “victimises those who have, in good faith, begun implementing the standard”. The company launched its patent licensing programme in 2003, and has entered into OpenTV’s data communication patents in the Highlighting long-term consequences, Hesse more than 1,200 deals. US are invalid under the Alice Corp decision, a said: “Companies that thought they could district court rules in the Swiss TV technology rely on the FRAND licensing commitments Nvidia v Samsung takes another turn company’s spat with Apple may be less willing to implement the p6 standard, or future standards.” Samsung failed to show that semiconductor manufacturer Nvidia infringed its patent for She claimed that for those reasons, anti-trust memory chip technology, a jury in the US Copyright law is yet to scratch the surface of enforcers and competition advocates are has ruled. what is commercial and non-commercial, says addressing this behaviour where appropriate. Jay Rosenthal of Mitchell Silberberg & Knupp The jury, sitting in the US District Court for p8 “We also work closely with the Patent and the Eastern District of Virginia, also upheld Trademark Office, to find ways of using our Samsung’s patent on 5 February. enforcement or regulatory powers to further Arrivals and departures at ICANN, Davies our goal of unleashing the competitive forces They ruled against Nvidia’s claim that the Collison Cave and more in the market.” patent lacked a written description. p12

Contents

Latest News

ASJA supports Authors Guild over OpenTV patents ‘abstract’ under Alice Kobe Bryant tattoos spark infringement Google Books Corp decision one-on-one The US Court of Appeal for the Second Circuit’s decision in the Google Books case threatens the balance of the Copyright Act, according to the American Society of Journalists and Authors (ASJA). The ASJA submitted an amicus brief to the Supreme Court on 1 February in support of the Authors Guild’s battle to protect its authors from Google’s mass digitisation of thousands of university collections. A lengthy legal battle resulted in the Second Circuit ruling in October 2015 that Google Books, as it became known, ‘transformed’ the works when scanning them and making snippets available for searching. This made the project a non-infringing and highly beneficial fair use under copyright law, according to the Second Circuit. ASJA argued in its petition that the Second Circuit “erred” by interpreting ‘transformation’ “in a manner completely detached from justification or fairness”. Citing the Campbell v Acuff-Rose Music 1994 case, the petition said the court defined transformation as whether the “otherwise infringing” work adds “something new, altering the first with new expression of meaning.” “Here, Google has not altered the works at all. Their meanings and messages are the same.” The Authors Guild urged the Supreme Court to weigh in on the decision in January. “The [Second Circuit] decision fundamentally remakes the fair-use doctrine by eliminating any focus on whether the use involves the creation of new expression, meaning, or message,” according to its petition. A decision on whether the Supreme Court will hear the case is expected in the spring.

OpenTV’s data communication patents in the US are invalid under the Alice Corp decision, a district court has ruled in the Swiss TV technology company’s spat with Apple. The US District Court for the Northern District of California held on 28 January that the patents were abstract under the Supreme Court’s 2014 Alice Corp v CLS Bank ruling and lacked an inventive concept.

Tattoo company Solid Oak Sketches has filed a copyright infringement complaint against a videogame publisher for using basketball superstar Kobe Bryant’s tattoo designs in its games. Take-Two Interactive Software, which also owns Rockstar Games, the maker of the Grand Theft Auto series, allegedly infringed Solid Oak’s copyright by using eight tattoo designs in its official NBA games.

The subsidiary of Kudelski Group, OpenTV, filed the lawsuit against Apple in May 2015, These included a child portrait on Bryant’s arguing that the iOS and OS X operating right arm and a crown with butterflies, systems infringed patents for securely according to the 02 February complaint. communicating data between devices. Bryant’s tattoos feature prominently on Apple sought to prove that the claims of the covers and adverts for Take-Two Interactive patents were abstract and filed a motion to Software’s official NBA games. dismiss the case. Solid Oak acquired the copyright for OpenTV argued that the patents constitute Bryant’s tattoos in June 2015 from the “significantly more” than an abstract idea artist who created the designs, according because they satisfy the two-part framework to the complaint. affirmed in the Alice decision. Solid Oak offered Take-Two Interactive That decision also held that requiring Software a licensing agreement to use computer implementation fails to transform an eight of the tattoos in 2014 and 2015, for abstract idea into a patent-eligible invention. $819,000, or a license beginning in 2016 for $1.4 million. The affirmed two-part framework states that patent examiners must analyse all But the offer was apparently rejected. claims directed to laws of nature, natural phenomena, and abstract ideas for subject The complaint filed at US District Court for matter eligibility, despite the existence of any the Southern District of New York, sought judicial exceptions. damages of $150,000 per infringement and a jury trial. Judge Edward Davila of the US District Court for the Northern District of California held Solid Oak also owns the copyright for LeBron that OpenTV’s patents were abstract and James’s tattoos. lacked an inventive concept. “The claims are directed to the abstract idea of controlling Take-Two Interactive Software has not the rights of software applications to repsonded publically to the complaint. access other software applications and fail to contain an inventive concept,” ruled Have a story we should cover? Let us Judge Davila. know: editor@ipprotheinternet.com 6

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Tammy Facey reports

Digital Copyright

Copyright law is yet to scratch the surface of what is commercial and non-commercial, says Jay Rosenthal of Mitchell Silberberg & Knupp Do you think, in light of the criticism levelled at Google Books in its dispute with the Authors Guild, that mass digitisation is a path that must be tread carefully? It’s a path to tread very carefully. The case impacts on copyright owned by major companies, as well as small artists and independent companies representing those artists. It’s a case that is very troubling to the content and artist community and, therefore, we should definitely tread carefully into mass digitisation.

How likely is it that mass digitisation will happen—are we already there, with the Google Books litigation and the drive towards digitising everything? I think we are headed in that direction. When you open the door, it’s hard to close. The big copyright question for mass digitisation is what kind of protections and comfort can the companies engaged in these projects give to the content and artistic communities so they are comfortable that their property is not being infringed or their business model damaged. Whether or not the use can be characterised as commercial or non-commercial is also very challenging. It is a grey area at this point. In the past, it was fairly easy to conclude that a library project was non-commercial and beneficial to our culture, and in some instances a clear example of ‘fair use’. That is not the case today. Mass digitisation projects contemplated today can certainly be commercial in nature. This changes the whole tenor of these initiatives. This is where a lot of the concern lies. Libraries never sold music—now they can sell or rent music tracks. It’s a new world.

We have yet to scratch the surface of what is commercial or noncommercial. This is a red flag for the content community moving forward. And the content community is trying to express that to Congress, to companies and organisations engaged in mass digitisation. I think we’re just starting the process of figuring out what to do and what protections to have. But mass digitisation is moving forward. It is simply a by-product of our new digital world. You have to embrace it, but the goal is to make sure it’s a win-win for all involved. We cannot create a system whereby content creators are collateral damage. We did this with piracy and it was a disaster for content creators. It is time to figure out how all the parties can emerge as winners because, if artists lose the incentive to make money, it will end the creation of art.

You say that in an ideal situation, ‘everybody’ wins, but it seems right now that Google is the only winner. Is this fair? I do not deny that Google and other digital service companies are ahead, but it is more of a race, than a one-day event. Google and other companies engaging in mass digitisation are far ahead, but it does not mean that content creators cannot catch up. In historical context, this is how copyright has always worked. New disruptive technologies are developed, and copyright owners have always had to fight for their rights after the fact—in other words, they chase after the new technologies by filing lawsuits and seeking changes in copyright law. But once the content community begins to take action, whether it’s through copyright reform or in the courts, the playing field becomes more balanced—at least hopefully. It’s one of the reasons why I think there has been such an increase in compulsory licensing since the beginning of the 20th century. This

Digital Copyright a way that keeps them moving forward. Maybe there needs to be more conflict between the two sides before we come to any realisation that if you don’t have art, then you won’t have Google, except if you think that Google and companies that create these technologies, do not care about the creation of new art: perhaps they think we have enough music out there, or movies, or users can just create it, and that’s all that matters. Then we really have a problem with professional art, and the quality of the art that is coming out of the artistic community.

has always been a fall-back position of government and when a market fails, and compulsory or collective licensing seems to be the more efficient answer, the government—for good or bad—steps in. This is not the perfect solution, but this is better than piracy because at least the copyright owner is paid. The question, however, is how much do companies pay, and is it a fair price for the content. Compulsory licensing, frustratingly, devalues the intellectual property, but it’s good that they pay for it once they take a compulsory licence.

On the flipside, is the June 2014 Aereo decision the antithesis of the Google Books case? Does it offer rights holders any hope?

Is that a likely outcome of mass digitisation? Perhaps. The frightening potential is that mass digitisation could become a way to expand fair use. That’s what the Google Books case is about, as well as other entities doing the same thing. We need to stay away from an expansion of fair use.

The Aereo case hit upon one great headline: you’re not supposed to use technological gimmicks to get around paying royalties. That’s not what the copyright law is, it is not a game.

Fair use needs to be narrow and limited. We should be focusing on how to pay artists—not on how not to pay them.

Aereo’s technology of thousands of tiny antennae was a gimmick to avoid paying a public performance. It’s ingenious. But the case might represent the crest of the wave for minimalist copyright.

Do you think fair use will be narrowed?

Maybe it is rolling back and Aereo is a good example of that. We can only take so much of this juvenile approach to art, and those involved in making the TV programmes.

No. On one level, if fair use is not expanded, the content owners have ‘won’. But much in Congress is not a matter of winning, but a matter of keeping the status quo. I am not optimistic that fair use is going to be limited.

I agree that, if you’re looking at the Google Book case as ‘bad’ for copyright, the Aereo case is ‘good’ for copyright.

If Google, libraries and universities are considered to be practising fair use, how are rights owners affected?

There are more Aereo-style companies out there. The sector may also see major copyright lawsuits against the larger companies too, such as Grooveshark and MegaUpload.

If fair use is expanded into what would be considered ‘commercial’ activity, rights owners will be deprived of royalties that they would rightly receive from a clean commercial endeavor. The worst thing is that rights owners would lose an otherwise commercial market and would stop making art because they are not being compensated properly. I think this is something lost on everybody. We cannot incentivise the creation of amateur art—we must incentivise the creation of professional art.

Grokster has gone, and everybody has recognised that the copyright community on the piracy side has handled the technological companies involved in piracy and those companies are coming to a realisation that now, they cannot steal copyrighted property. The question now is how much are they paying. Companies such as, Spotify and Google have agreed to license—whether or not these small licensing fees adequately substitute for the loss from piracy is the great question. And this is where a lot of the fight is going to be.

Quality art is lost unless companies protect their copyright. Without paying the artists, you do not get quality art. The Founding Fathers did not want copyright to help create Justin Bieber—they wanted copyright to help create the next American Mozart.

So there still is hope that even in the face of mass digitisation by companies like Google, the rights holders will be properly compensated. IPPro

Did Google ignore the public cries for quality art, then, for commercial gain? Google’s goal is to share everything and to make as much money doing it as possible. Helping artists to create quality art is a secondary matter to them. I don’t begrudge them for that, but I do begrudge them that they are ignoring, the constitutional imperative to protect artist’s rights. Both individuals and institutions are fighting for an ecosystem that supports these artists, and allows them to get the money they deserve in

Fair use needs to be narrow and limited. We should be focusing on how to pay artists

Jay Rosenthal, Partner, Mitchell Silberberg & Knupp LLP 9

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Global IP Exchange

Global IP ConfEx

Location: Germany Date: 07 - 09 March 2016 www.globalipexchange.com

Location: London Date: 16 March 2016 www.london2016.events4sure.com

The 7th Global IP Exchange will bring together 120 senior IP decision makers who are all looking to discover new ideas and make new connections. This popular invitation only meeting is open to chief IP officers, directors of IP, heads of patent, trademark, brand protection and anti-counterfeiting plus a selected group of innovative solution providers.

The Global IP ConfEx, from the Global Outsourcing Association of Lawyers, will act as the ideal platform to promote the welfare, interests, education and professional development of all who are directly or indirectly associated with the legal and IP industry.

For more events visit www.ipprotheinternet.com/events/events.php

People Moves

Industry appointments Arrivals and departures at ICANN, Davies Collison Cave and more Göran Marby has been named the new president and CEO of the Internet Corporation for Assigned Names and Numbers (ICANN).

Hughes is an expert in the areas of technology, IP commercialisation and e-commerce.

Marby will be based in Los Angeles, moving to one of ICANN’s three global hubs, in May.

As a former partner of Ashurst Australia, he has extensive experience in the IP field. He has also served as president of the law institute of Victoria and the Law Council of Australia.

He has more than 20 years of experience in the internet and technology sector and currently serves as the director general of the Swedish Post and Telecom Authority.

Chris Jordan, lead partner at Davies Collison Cave, said: “This appointment has been made in order to meet our clients’ meets.”

He succeeds current president and CEO Fadi Chehadé, whose term finishes on 15 March.

Lewis Roca Rothgerber Christie has added John Carson to its Los Angeles office as of counsel.

Akram Atallah, president of ICANN’s globlal domains division, will serve as acting CEO during the interim.

As a former trademark consultant to the Idaho secretaries of state, Carson is called upon as an arbitrator and mediator.

Marby said: “I am very excited to be joining ICANN and joining at the start of a new era for the organisation and the community.”

He has more than 40 years of experience in IP law and is well-versed in computer hardware, software and electromechanical systems.

ICANN has also cancelled its fifty-sixth meeting in Panama, due to the Zika virus crisis in Latin America.

Carson has managed a variety of IP and counterfeiting operations in the US and internationally, representing brand names in trademark infringement matters.

ICANN56, due to be held in June, will be moved to another as-yet unconfirmed location, the corporation confirmed in a statement.

Art Hasan, leader of the IP group at Lewis Roca, said: “Carson’s trademark and licensing work across a wide variety of industries brings valuable experience to Lewis Roca Rothgerber Christie.”

Gordon Hughes has joined Davies Collison Cave as partner in its litigation and commercialisation practice in Melbourne. 12

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People Moves Associate Helen Schweitz has joined Quarles & Brady’s IP practice group in Chicago. She joins from insurance company Allstate where she served as an associate attorney and drafted and reviewed technology contracts. Schweitz has also counselled clients on corporate strategy, technology and product operations. Lynn Pinker & Cox has become Lynn Pinker Cox & Hurst, with the addition of Michael Hurst as partner in its Dallas office.

Editor: Mark Dugdale editor@ipprotheinternet.com +44 (0)203 750 6022

Hurst is an established IP and litigation lawyer. He arrives at the firm from Gruber Hurst Elrod Johansen Hail Shank and has litigated high-profile lawsuits.

Deputy Editor: Stephanie Palmer stephaniepalmer@blackknightmedialtd.com +44 (0)203 750 6019

Hurst’s colleagues Shonn Brown and Jonathan Childers also join the firm as partners, while John Guild has become senior counsel and Joshua Sandler, Michael Kalis and Christina Mullen join as associates.

Reporter: Tammy Facey tammyfacey@blackknightmedialtd.com +44 (0)203 750 6017

Lynn Pinker, partner in charge, said: “By adding Kalis, Brown, Childers and their team to the already considerable talent here, we truly have the finest and most experienced stable of young trial talent in the city and perhaps even the state.”

Contributors: Becky Butcher and Drew Nicol editor@ipprotheinternet.com Marketing Director: Steven Lafferty design@securitieslendingtimes.com

“We are pleased to join forces with Lynn, Pinker and Cox,” said Hurst. “This combination is going to be unstoppable. I look forward to reaching even greater heights together in the next 20 years and beyond.”

Marketing Executive: Ayla Uzunhasan ayla@blackknightmedialtd.com +44 (0)203 750 6020

Zeisler has bagged trademark attorney Mark Mutterperl as partner, to lead its IP and brand protection practice.

Designer: John Savage johnsavage@ipprotheinternet.com +44 (0)203 750 6021

He previously served as partner at Norton Rose Fulbright for 23 years. Mutterperl focuses his practice on trademarks, false advertising, copyright and right of publicity.

Associate Publisher: Carlos Northon carlosnorthon@ipprotheinternet.com +44 (0)203 750 6023

He has litigated for Apple, Starbucks, Johnson & Johnson and Pfizer and has implemented anti-counterfeiting programmes and managed trademark portfolios.

Publisher: Justin Lawson justinlawson@securitieslendingtimes.com +44 (0)203 750 6019

Aaron Zeisler, founder of Zeisler, said: “We are thrilled to add Mutterperl to our team. IP is one of our core practices and Mutterperl’s experience immediately expands our ability to provide outstanding client service.”

Recruitment Manager: Chris Lafferty chris@assetservicingtimes.com +44 (0)208 663 9624 Office Manager: Chelsea Bowles accounts@securitieslendingtimes.com +44 (0)203 750 6020

Mark Howland and Samuel Joyner have joined Carrington, Coleman, Sloman & Blumenthal in Dallas as partners. Howland arrives from Jones Day, where he spent 15 years representing clients in patent and trade secret litigation in federal courts in the US.

Office fax: +44 (0)20 8711 5985

He has a particular focus on semiconductor manufacturing, wireless communications and software.

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Joyner previously served as partner at Ross Joyner, where he worked on patent infringement, copyright and trademark enforcement, and unfair competition.

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Bruce Collins, partner at Carrington, said: “The addition of Howland and Joyner will allow us to offer that same level of expertise to technology companies facing complex, high-stakes patent litigation.” IPPro