This litigation is no small matter.  Since 1998, sales of the Quilted Northern toilet paper exceeded $7 billion, and between 2002 and 2009, sales for the Angel Soft exceeded $5 billion.  Thus, the outcome of this litigation will have serious financial implications for toilet paper producers and their marketing programs.  Georgia-Pacific seeks to prevent future infringement by Family Dollar and its distributor in addition to an order preventing Family Dollar from asserting that the toilet products are comparable.  Georgia-Pacific also seeks money damages, costs and attorney fees.  It will be interesting to see how this suit plays out (check back for more updates). 

Georgia-Pacific Consumer Products LP v. Family Dollar Stores Inc., 1:10-cv-00584-JEC, U.S. District Court, Northern District of Georgia (Atlanta).

According to WIPO, filings by applicants in the United States fell by 11.4 percent in 2009, although the United States maintained its top ranking with 45,790 applications in total. Filings from applicants in Germany, Canada, Sweden, and Israel also declined by double-digit figures.

In contrast, WIPO continued to register increasing applications from East Asian countries. China led the way with nearly 8,000 PCT applications, a 30 percent jump over 2008. China moved ahead of France and now ranks fifth among PCT applicants, up from 6th position the previous year. A growing trend.

The infringing versions of Word employ a technology called “Custom XML,” which lets users edit XML, the programming language that controls the way programs interpret and display the contents of a document.

In a statement, Microsoft said that it has been developing modified versions of Word 2007 that do not use the Custom XML feature.  Microsoft claims that these modified versions will be ready for sale by January 11, 2010, the date on which the permanent injunction takes effect.  Microsoft also noted that it is considering further legal options, “which could include a request for a rehearing by the Federal Circuit Court of Appeals en banc or a request for a writ of certiorari from the U.S. Supreme Court.”

The court noted that its decision did not impact copies of Word 2007 sold before the injunction takes effect, so Microsoft can continue to provide technical support with respect to those versions.

The agreement caused De Molen to stop using the Rasputin name, but not without taking a shot at North Coast in the process.  After changing the name of their beer to Disputin, De Molen printed the following under the name, ”This stout used to be called Rasputin, but the people who make Old Rasputin in California thought you were too dumb to tell the two products apart, and threatened to sue us for trademark infringement.” [LABEL IMAGE]  While many breweries are teaming up to create collaborative brews, some continue to fiercely compete.

Full Story From Beernews.org

Judge Alsup rejected all of Psystar’s arguments, including under the first sale doctrine, holding that the doctrine only applies to legal copies, not the unauthorized copies that Psystar had made.  Apple also won its claim under the DMCA, with the judge holding that Psystar had violated the DMCA by circumventing Apple’s protective measures to prevent it from being installed on non-Mac machines.  The case does provide a few practice tips for aspiring attorneys.  If you are going to rely on a fair use defense, you may want to actually run through the ubiquitous four factors, as apparently Psystar was too busy to do so in their own brief and got slapped down by the judge.

With victory in hand, Apple has now moved on to the remedy; seeking a permanent injunction, which would prohibit Psystar from selling any machine that is pre-loaded with Apple’s operating system.  Apple is also asking for $2.1 million in statutory damages.  While this case was a seemingly easy win for Apple based upon these facts, a harder case may be yet to come from those in “hackintosh” industry that simply offer software that enables legitimate buyers of Mac OS X to install it on their own non-Apple machine, rather than actually pre-installing and distributing non-Apple machines containing Apple software. Apple would heavily rely on its EULA which prohibits customers from installing its OS X operating system on non-Apple computers.

Does this mean that customers can rely on this decision and not worry about signing the Terms of Use agreement online? What kind of provision should be included in Terms and Conditions agreement to protect the business from being found unenforceable by the Courts?

Blockbuster’s agreement had the problem that it could change its Terms and Conditions in the click-wrap agreement at its sole discretion, and the changed provisions would become effective immediately upon posting. The Circuit Court in the case stated that the right to modify provision concerned them since it leaves no room for the other party – the customers, to respond to the terms, and thus putting them at an unfair disadvantage in the event of a dispute.

What should the business do? The Court in Blockbuster pointed to a Texas Supreme Court case from 2002, In re Halliburton Co., 80 S.W. 3d 566, which found an electronic agreement enforceable because it included a provision like: “notwithstanding any provision to the contrary, no amendment shall apply to a dispute of which the amending party had actual notice on the date of amendment.”

So there should be a provision stating that parties should be subjected to the provisions that were effective at the time when the dispute arose, but not to the amendment made thereafter.

The complaint states that “Activision has deceived and confused the public into believing that No Doubt authorized the use of its name and likeness for the Character Manipulation Feature of Band Hero and that No Doubt approves and endorses the appearance of its members individually performing songs that are wholly inappropriate and out of character for No Doubt.”   The band members view the Character Manipulation Feature as particularly problematic since users could, for example, have Stefani’s image sing to the Rolling Stones’ “Honky Tonk Woman.” 

Jim Gueiront, No Doubt’s manager, claimed ”[the members] are bitterly disappointed that their name and likeness [were] taken and used without their permission…[Activision] agreed to play three No Doubt songs as a band…. Activision then [without permission] put them in 62 other songs and broke the band up.” 

Activision believes it is within its legal rights and that the lawsuit is meritless: “Activision has a written agreement to use No Doubt in Band Hero – an agreement signed by No Doubt after extensive negotiations with its  representatives, who collectively have decades of experience in the entertainment industry.  Pursuant to that agreement, Activision worked with No Doubt and the band’s management in developing Band Hero.” 

To succeed on a right of publicity claim under California law, a plaintiff must show four elements: (1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury.  Hilton v. Hallmark Cards, 580 F.3d 874, 889 (9th Cir. 2009); Downing v. Abercrombie & Fitch, 265 F.3d 994, 1001 (9th Cir. 2001).  

It will be interesting to see how elements 3 and 4 will be litigated. 

(http://latimesblogs.latimes.com/music_blog/2009/11/no-doubt-sues-activision-over-band-hero.html)

Enforcement issues aside, In re Application of Cellco Partnership (09 CIV. 7074) raises important policy questions regarding the scope of copyright.  Are copyright holders overly compensated for their creative efforts under the current regime or are more incentives needed to keep pace with the changes in technology that allow for massive infringement with the single click of a mouse?  Regardless of the policy viewpoint adopted, the public can (for now) take comfort in letting their cell phones ring at the park or the beach without worrying that doing so constitutes copyright infringement. 

At issue in Cellco was whether ringtones playing in public placed constituted a “performance” within the meaning of Section 106 of the Copyright Act, which provides that a copyright owner has the exclusive right “in the case of literary, musical, dramatic, and choreographed works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly.”  Section 101 specifies that to perform or display publically means to “transmit or otherwise communicate a performance … by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”  

The Court reasoned that because only subscribers receive the transmission or alleged performance, such transmission or performance is not available to the public (non-subscribers) and thus not covered by the Transmission Clause.  According to the Court, “there is no qualifying public performance under §106(4) when the customer uses the ringtone to alert her to an incoming call.  Thus, even [if] the downloading of a ringtone is considered as the first link in the chain of transmissions, it does not qualify as a public performance.”   Accordingly, ringtones played in public places did not qualify as public performances within the meaning of Section 106 of the Copyright Act and the Court held that Verizon could not be directly or secondarily liable. 

Verizon was found not to be directly liable because Verizon neither “performs” the music nor engaged in “conduct that can be said to cause a ringtone to be played in public.”  In applying Section 101 of the statute, the Court held “Verizon does not ‘recite, render, play, dance or act [the ringtone] either directly or by means of any device’ and thus does not ‘perform’ the music.”  The Court noted that “Verizon’s only role in the playing of a ringtone is the sending of a signal to alert a customer’s telephone to an incoming call.”

After looking to the exemption from §106(4) found in §110(4) for “those performances of a musical work that occur within the ‘normal circle of a family and its societal acquaintances,” the Court found that Verizon could not be secondarily liable.  The Court reasoned that the “expectation of profit is important to determining whether a performance fits within the §110(4) exemption,” but “Verizon customers are not playing ringtones for any ‘commercial advantage;’ they do not get paid any fee or compensation for these performances; and they do not charge admission.”  Thus, after finding that neither the customers nor Verizon were liable for copyright infringement, the Court granted Verizon’s motion for summary judgment (the Court also granted summary judgment in favor of AT&T “for substantially the same reasons”  in In Re Application of AT&T Mobility, (09 CIV. 7072)).  

Consequently, Verizon Wireless and AT&T do not need public performance licenses for the ringtones they sell to their customers. 

This decision seems to comport with the general policy underlying Copyright Law – to grant copyright holders exclusive rights to their works in order to “promote the Progress of Science and useful Arts.”  If indeed economic rewards to authors should be treated as secondary to the broad dissemination of works for the public benefit, then denying ASCAP’s request for additional royalties in order to give the public access to the works for which they have already paid rings true to me.

Publishers around the globe are suffering from consistent reductions in ad sales and revenue driven by decreased circulation.  The most common target of the publishers’ anger and frustration have been online aggregators.  In the U.S., aggregators have been party to a series of lawsuits, most of which have ended in undisclosed settlements.  The U.S. government has yet to take action to clarify how the copyright laws relate to the aggregation of content online.

A different story is unfolding in Germany where the government is proactively taking steps to create a new type of copyright designed to protect publishers against online news sites.  According to the The New York Times, the German government’s proposal would give publishers a “neighboring right,” similar to what music labels and movie houses already enjoy.  Details of the proposal have not been fully hashed out, but one suggestion is to require a license for any commercial use of published material online.  A new royalty collection agency would be created to gather and distribute the fees.  Private, noncommercial uses would remain unrestricted.

Opponents to the plan say extension of the copyright laws runs counter to the “spirit of openness” that characterizes the web.  They also argue that distinguishing between commercial and private noncommercial use would be extremely difficult.  Fair use is an additional concern, though fair use protection in Germany is nowhere near as strong as it is in the U.S.  It will be interesting to see whether the German proposal is adopted, and if it will have any influence on the extension of U.S. copyright laws in this area.

It is no secret that the USPTO is overwhelmed with patent applications.  Indeed, this was the motivation behind the now abandoned rules changes the office proposed recently.  Inherent in an overburdened system is the likelihood of errors, especially by omission.  Therefore, it is possible that prior art that should have been found by an overburdened examiner never comes to light and an easily invalidated patent could grant.

Even if the USPTO was not so overworked, it could not possibly find all of the prior art that may be germane to a particular application.  However, it is not like that art cannot be found.  Indeed, when parties really want to find good art they spend money doing so and usually can find the needed references.  This explains why new prior art frequently pops up during the course of litigation (recall the facts on Graham v John Deere).  Ultimately, however, while there is a presumption of validity on issued patents, if prior art is out there is can invalidate a patent.  Therefore, it is in everyone’s best interests to get all the prior art out there during the patent prosecution process

One interesting approach to solving these problems was tried recently during a two year (2007-08) pilot program conducted by the USPTO and New York Law School’s Institute for Information Law and Policy.  The so called “peer to patent program” added a peer review element to the examination procedure.  But, this was not the usual peer review of scientific journals, namely sending the matter to a few experts for their opinions.  Rather this system opened the process up to everyone who sought to contribute.

Basically the program worked in the following way.  Examiners and applicants in the computer and business methods arts could volunteer to take part in the program (I’ll leave the ironic Bilski issues out of this for now).  Tagged applications were posted on the web and whoever was interested could read the materials and discuss them with others.  Then individuals searched for prior art and posted it to the site.  Individuals were asked to annotate how the art addressed particular claims in the application.  After some time elapsed, the top ten references were forwarded to the examiner who then reviewed them and proceeded with the examination process.  In this way, the hope was that the examiner would spend less time having to search for art and would not miss obviously relevant references.

The program ended last year and is being evaluated by the USPTO.  A promising note is that the program was recently identified by the White House Open Government Initiative as one of the innovations in Open Government.  Is this a feasible system for solving some of the problems in our current way of examining patents?