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Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





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MICROSOFT CORP. V. I4I LIMITED PARTNERSHIP - high level of proof needed to declare a patent to be invalid, once its issued.

The Supreme Court has handed down another important decision regarding U.S. patent law.

At issue is the level of proof that is needed to show that a patent is invalid, after it has been granted by the U.S. Patent Office.

Microsoft (in trying to get a competitor's patent to be declared invalid) argued that it need only show that a patent is invalid through a "preponderance" of evidence.

Microsoft's rival in this case, i4i, argued that a patent should only be invalidated based on "clear and convincing" evidence - a higher standard that is more difficult to overcome if you are trying to overturn a patent.

Today, the U.S. Supreme Court held that the tougher "clear and convincing" standard is needed to raise an invalidity defense to patent infringement.

In terms of policy, this is most regrettable. In terms of legal interpretation, it is justifiable enough to say that the fault must ultimately lie with Congress on this matter - rather than the courts.

As the Court's decision notes: "We find ourselves in no position to judge the comparative force of these policy arguments...Any re-calibration of the standard of proof remains in its hands."

From a policy standpoint, some small amount of solace is found in the concurring opinion of Justice Breyer (joined by Justices Scalia and Alito):

I write separately be-cause, given the technical but important nature of the invalidity question, I believe it worth emphasizing that in this area of law as in others the evidentiary standard of proof applies to questions of fact and not to questions of law. See, e.g., Addington v. Texas, 441 U. S. 418, 423 (1979). Thus a factfinder must use the "clear and convincing" standard where there are disputes about, say, when a product was first sold or whether a prior art reference had been published.

Many claims of invalidity rest, however, not upon factual disputes, but upon how the law applies to facts as given. Do the given facts show that the product was previously "in public use"? 35 U. S. C. 102(b). Do they show that the invention was "nove[l]" and that it was "non-obvious"? 102, 103. Do they show that the patent applicant described his claims properly? 112. Where the ultimate question of patent validity turns on the correct answer to legal questions what these subsidiary legal standards mean or how they apply to the facts as given today's strict standard of proof has no application. See, e.g., Graham v. John Deere Co. of Kansas City, 383 U. S. 1, 17 (1966); Minnesota Mining & Mfg. Co. v. Chemque, Inc., 303 F. 3d 1294, 1301 (CA Fed. 2002); Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F. 3d 1296, 1305 (CA Fed. 2010); cf. Markman v. Westview Instruments, Inc., 517 U. S. 370 (1996).

Courts can help to keep the application of today's "clear and convincing" standard within its proper legal bounds by separating factual and legal aspects of an invalidity claim, say, by using instructions based on case-specific circumstances that help the jury make the distinction or by using interrogatories and special verdicts to make clear which specific factual findings underlie the jury's conclusions. See Fed. Rules Civ. Proc. 49 and 51. By isolating the facts (determined with help of the "clear and convincing" standard), courts can thereby assure the proper interpretation or application of the correct legal standard (without use of the "clear and convincing" standard). By preventing the "clear and convincing" standard from roam-ing outside its fact-related reservation, courts can increase the likelihood that discoveries or inventions will not receive legal protection where none is due.

Read the full opinion (and concurring opinions) here [PDF]:

http://www.supremecourt.gov/opinions/10pdf/10-290.pdf

An Unlawful Monopoly Claim Over Disposable Baby Diapers

Kimberly-Clark executives might need to start using their own products, based on their potential reactions to this news as reported by CourtHouseNews.com -

"Huggies" manufacturer Kimberly-Clark Worldwide must answer an allegation that it knowingly used invalid patents to monopolize the market for disposable baby diapers.

In March 2009, the company sued First Quality Baby Products, a "private label" diaper-seller producing Wal-Mart- and Walgreen's-branded diapers, claiming First Quality's products infringed on Kimberly-Clark's patents.

In April 2009, First Quality fired back with counterclaims, accusing Kimberly-Clark of trying to enforce invalid patents.

"First Quality alleges that KC [Kimberly-Clark Worldwide] uses its patents to disrupt competitors and to maintain a monopoly in the disposable baby diaper and training pants market. KC first threatens a patent lawsuit and then engages in sham litigation to drain the resources of private label manufacturers, thereby reducing the ability of private labelers to compete," U.S. District Judge William Caldwell wrote in a 12-page opinion denying Kimberly-Clark's motion to dismiss the counterclaims.

Read the full story here: http://www.courthousenews.com/2011/05/19/36704.htm


Then read the full [PDF] court ruling here:

http://www.courthousenews.com/2011/05/19/diaperopinion.pdf

In reference to page 2 of the court's opinion: Did you know that 300 patents were apparently needed to manufacture disposable diapers? Neither did I...

Using (and Abusing) Trademarks In An Attempt To Monopolize The English Language

"By definition, intellectual property includes the words, images, and sounds that we use to communicate, and the courts are strongly admonished not to 'indulge in the facile assumption that one can forbid particular words without also running a substantial risk of suppressing ideas in the process'."

Wise words indeed. They come courtesy of the Honorable Paul L. Maloney, a U.S. District Judge in Michigan who wrote the above line (partially quoting previous cases) in conjunction with this trademark dispute here [PDF link]:

http://ia600305.us.archive.org/26/items/gov.uscourts.miwd.65061/gov.uscourts.miwd.65061.46.0.pdf


Unfortunately, large segments of the IP legal community haven't gotten the message. Witness this recently filed case here [PDF link]:

http://www.courthousenews.com/2011/05/12/Media.pdf

Adobe Faces Antitrust Monopoly Class Action

Adobe Systems bought Macromedia to remove its competitor FreeHand from the professional graphic illustration market, and to force users to switch to Adobe's more expensive, and inferior, Illustrator software, graphic designers say in a federal antitrust class action.

More details via CourthouseNews.com here:

http://www.courthousenews.com/2011/05/05/36356.htm

LimeWire and Music Labels Face Off Over Damages

Via CourthouseNews.com:

"Attorneys offered competing explanations of how major record labels view file-sharing software as opening arguments kicked off the damages trial against former LimeWire CEO Mark Gorton on Wednesday.

...

The eight-person jury listening to opening arguments on Wednesday afternoon will not determine whether LimeWire's peer-to-peer file-sharing is illegal; a judge already determined that it was in May 2010.

Instead, jurors will decide how much Gorton owes the labels in damages."

Courthouse News has more details in their coverage here:

http://www.courthousenews.com/2011/05/05/36369.htm

Tattoo Artist Claims Copyright Over Mike Tyson's Tattoo - Sues Warner Bros.

Via CourthouseNews.com:

ST. LOUIS (CN) - The tattoo artist who did Mike Tyson's face claims Warner Bros. "pirated" his work to advertise its movie, "The Hangover 2." S. Victor Whitmill wants a federal judge to bar Warner Bros. from using the tattoo in its promotions, and damages for copyright infringement. Whitmill says he created and applied the tattoo to the upper left side of Tyson's face on Feb. 10, 2003. Whitmill says the boxer signed a release stating that Whitmill was the owner of the tattoo's design, and says he registered a copyright of the design. Whitmill claims Warner Bros. used an exact replica of his work, without permission, to promote "The Hangover 2" this spring.

Read the whole thing here:

http://www.courthousenews.com/2011/04/29/36203.htm


Read the court complaint (in PDF format) here:

http://www.courthousenews.com/2011/04/29/TysonTat.pdf

Righthaven Suffers Another Blow in Its Copyright Terror Crusade

Via Tim Hull at CourthouseNews.com:

A federal judge blasted Righthaven's copyright-collection business model in a ruling that says an Oregon nonprofit was justified through fair use to post an article by the Las Vegas Review Journal.

"[Righthaven's] litigation strategy has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing to advance the Copyright Act's purpose of promoting artistic creation," U.S. District Judge James Mahan ruled Friday.

Nevada-based Righthaven sues bloggers and websites for copyright infringement if it finds that they have not received permission before posting articles or photographs by publications it oversees. The Las Vegas Review-Journal assigns copyrights to Righthaven for the purpose of filing such lawsuits.

Read the rest of the coverage on this story here:

http://www.courthousenews.com/2011/04/25/36074.htm

Perfect 10 v. Google - Round 3 continues

Litigation continues between image content provider Perfect 10 and Google, with Perfect 10 claiming that Google is liable for caching websites that hosted infringing photos of nude models, and hosting infringing images uploaded by Blogger users (the free web publishing tool owned by Google).

Corynne McSherry at the Electronic Frontier Foundation explains the details concerning the latest round of litigation:

A quick recap: In 2004, porn company and frequent litigator Perfect 10 sued Google for direct and secondary copyright infringement. Perfect 10 claimed that Google violated its copyrights by linking to websites that hosted infringing material, caching websites that hosted infringing photos of nude models, and hosting infringing images uploaded by Blogger users. In 2007, the Ninth Circuit Court of Appeals reversed a preliminary injunction in favor of Perfect 10 on its direct infringement claims, and sent the case back to the district court for a determination of some of the secondary infringement claims. Google moved for summary judgment, asserting that it was protected from secondary liability by the DMCA safe harbors.

...Judge Howard Matz of the U.S. District Court in Los Angeles mostly agreed with Google, whittling Perfect 10's remaining case down to a small subset of allegedly infringing images. Why? Mainly because Perfect 10 didn't trouble itself to provide Google with the information Google needed to figure out what to take down in a form that Google could readily use.

Be sure to read Corynne's complete analysis here:

http://www.eff.org/deeplinks/2010/07/perfect-10-v-google-round-3-goes-google-no-sloppy



You can read Judge Mat'z full decision here (in PDF):

https://www.eff.org/files/filenode/Perfect10_v_Google/P10_v_Google_on_remand.pdf

Yesterday, the 9th Circuit Court of Appeals heard oral arguments on Judge Matz's decision. You can listen to how it all went down here (* requires Windows Media Player):

http://www.ca9.uscourts.gov/media/view_subpage.php?pk_id=0000007250

You gotta love the part about 15:50 in when the tech-savy Chief Circuit Judge Alex Kozinski asks Perfect 10's attorney in annoyance: "Have you ever heard of the word 'Yes'? Is your answer 'Yes'? I don't want a whole story."

Rethinking Media Piracy

Reihan Salam of National Review weighs in and concludes that "the case against panicking over media piracy seems pretty strong."

Read his thoughts on the subject here:

http://www.nationalreview.com/agenda/263965/rethinking-media-piracy-reihan-salam

The Next Important Legal Phase In The Gene Patenting Case

Andrew Cohen over at the Atlantic has a good primer on the important argument taking place this week at the Federal Circuit Court of Appeals:
In a closely-watched oral argument Monday at a federal courthouse in Washington, the core questions of the case read like scripts from a college philosophy exam: are isolated human genes and the subsequent comparisons of their sequences patentable? Can one company own a monopoly on such genes without violating the rights of others? They are multi-billion dollar questions, the judicially-sanctioned answers to which will have enormous ramifications for the worlds of medicine, science, law, business, politics and religion.

Even the name of the case at the U.S. Circuit Court for the Federal Circuit -- Association of Molecular Pathology, et al. v United States Patent and Trademark Office, et al -- oozes significance. The appeals court judges have been asked to determine whether seven existing patents covering two genes -- BRCA1 and BRCA2 (a/k/a "Breast Cancer Susceptibility Genes 1 and 2") -- are valid under federal law or, instead, fall under statutory exceptions that preclude from patentability what the law identifies as "products of nature..."

Read the whole thing here:

http://www.theatlantic.com/national/archive/2011/04/nature-vs-nuture-the-continuing-saga-of-the-gene-patenting-case/73359/

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Most Recent Comments

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Les patent trolls ne sont pas toujours des officines

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Bonfire of the Missalettes!

Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since

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