Joe Stanganelli an attorney explains why it is a good idea for Eolas to own the web

Critics nonetheless mewl argue that patents "stifle innovation." This is like arguing that requiring people to pay money at a restaurant "stifles feeding," or that making it illegal to steal a UPS truck to start a delivery service "stifles entrepreneurship." (Doubtlessly, when Thomas Edison denied Nikola Tesla the $50,000 he had promised him in exchange for spending several sleep-deprived months improving Edison's DC generators, Edison likely felt that honoring the contract would have "stifled" his company's innovation.)

It is unlikely that making it illegal to steal a UPS track to start a delivery service "stifles entrepreneurship" but of course it is an empirical question. In the case of patents the evidence is in: patents stifle innovation. Only evidence can refute evidence - theoretical arguments, feelings, and analogies are irrelevant.

Alex Laird's petition.

Columbia Law Professor Ronald Mann has a round-up of how the U.S. Supreme Court has looked upon the lower Federal Circuit's point-of-view when it comes to recent patent law decisions.

It is well worth a read here:

http://www.scotusblog.com/2011/07/ronald-mann-reviews-the-patent-cases-of-ot2010/

'Aside from the unprotectable ideas of (1) brandishing a blow dryer as a weapon, and (2) the characters' fighting poses, there is no plausible basis for a reasonable jury to find that the parties' respective expressions of the concept of a...crime-fighting hairdresser are substantially similar".

So holds the Second Circuit Court of Appeals in affirming the dismissal of a copyright claim here [PDF]:

Cabell v. Sony Pictures

The 2nd Circuit Court of Appeals ruled against Wall Street banks (and a lower court) in holding that a financial news service did not misappropriate their analyst research for its website.

The Appeals Court said the lawsuit against Theflyonthewall.com under New York "misappropriation" statutes was preempted by federal copyright law.

Financial institutions argued that Theflyonthewall.com was getting a "free ride" by "misappropriating research", including stock news, which cost them profits.

Theflyonthewall.com countered that it had a First Amendment right to publish before news goes stale, and that it got much of its information from public sources or from talking with traders and others in the Wall Street area.

The Appeals Court concluded: "We conclude that in this case, a Firm's ability to make news -- by issuing a Recommendation that is likely to affect the market price of a security -- does not give rise to a right for it to control who breaks that news and how."

Because of some legal gymnastics and an earlier ruling that Theflyonthewall.com had "waived" its First Amendment and fair use defenses, the Appeals Court did not directly rule on the First Amendment/fair use argument, but sections of the latest decision seem to suggest that court would have been sympathetic to it.

For instance, the Appeals Court wrote:

As the INS Court explained, long before it would have occurred to the Court to cite the First Amendment for the proposition:

"[T]he news element -- the information respecting current events contained in the literary production -- is not the creation of the writer, but is a report of matters that ordinarily are publici juris; it is the history of the day. It is not to be supposed that the framers of the Constitution, when they empowered Congress "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" (Const., 8 Art I, § 8, par. 8), intended to confer upon one who might happen to be the first to report a historic event the exclusive right for any period to spread the knowledge of it."

...

We do not perceive a meaningful difference between (a) Fly's taking material that a Firm has created (not "acquired") as the result of organization and the expenditure of labor, skill, and money, and which is (presumably) salable by a Firm for money, and selling it by ascribing the material to its creator Firm and author (not selling it as Fly's own), and (b) what appears to be unexceptional and easily recognized behavior by members of the traditional news media -- to report on, say, winners of Tony Awards or, indeed, scores of NBA games with proper attribution of the material to its creator.

Reuters has more here:

http://www.reuters.com/article/2011/06/20/us-theflyonthewall-wallstreet-banks-idUSTRE75J3RN20110620

Full court opinion here: http://www.ca2.uscourts.gov/decisions/isysquery/61c431d7-9894-48c3-8222-dda6c1b74742/2/doc/10-1372_both.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/61c431d7-9894-48c3-8222-dda6c1b74742/2/hilite/

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

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."

The latest issue of the American Bar Association Journal has a well written article explaining the most important patent case to reach the Supreme Court since the Bilski decision.

There's a major legal issue: To what extent should patents be presumed valid? [Microsoft] has been trying for years to get the Supreme Court to rule on this issue, and it appears the company is on the brink of success.

"This is a very important case," says Los Angeles attorney Glenn W. Trost. "The Supreme Court, for the first time, is going to squarely address the quantum of proof needed to establish the invalidity of a patent in patent litigation."

Read the full article here:

http://www.abajournal.com/magazine/article/court_may_make_it_easier_to_invalidate_an_invention/

It is especially funny to read the quotes from hard-core supporters of the current patent regime in this article, who all seem hell-bent on protecting their occupational turf (even if it means making it more difficult for genuine innovators to overturn weak or fraudulently granted patents).

However, the article does a good job at presenting both sides. Well worth the time to read.

Via SCOTUSBlog: "Ignoring the federal government's plea to stay away from the issue, the Supreme Court agreed on Monday to rule on a core issue of copyright law: when, if ever, does Congress have the constitutional power to revive copyright protection once it has expired for a creative work?"

The is an issue of major importance that is worth keeping on top of.

More background here:

http://www.scotusblog.com/2011/03/a-major-test-of-copyright-power/

It involves a somewhat detailed question of law, but the background of the case is worth reading here:

http://www.scotusblog.com/2011/02/argument-preview-court-to-consider-standard-for-secondary-patent-liability/