Saturday 26 January 2008 at 7:19 pm
Patents
The import of technology lies not simply in its immediate pragmatic solutions and identifiable improvements to our quality of life. What is also of profound significance are the ways in which technology may begat new technology and new types of commercial relationships, which keeps the cycle of innovation open and robust. Although conceptually intellectual property law offers creators and inventors legal protections for their innovations, as a practical matter, law both advances and encumbers innovation.
This term the Supreme Court will rule on the future relevance of the so-called doctrine of patent exhaustion. In Quanta v. LG Electronics (06-937), the court will decide whether a license imposed restrictions on (1) the use of purchased products by third parties after an authorized sale or (2) the use, manufacture, or sale of a patented product by a licensee. If a patent holder seeks to enforce a patent license that contains he restriction identified in choice (1), there may be a risk that patent holders may impermissibly expand their rights far beyond the intent of patent law. The doctrine of patent exhaustion is viewed as essentially prohibiting enforcement of a patent license with terms in (1), but allowing enforcement of the terms in (2).
What’s really going on here?
Quanta Computer bought computer chips from Intel and used them to make its laptop computers. LG Electronics had licensed Intel use of its patent to make the chips, but had imposed restrictions in the license that arguably prohibited Intel from allowing licensees like Quanta from using or buying the computer chips (practicing LG’s patent) from Intel.
It is difficult to marshal empathy for LG Electronics; they sound like a greedy patent holder who has been paid once and now wants to be paid again - - in a downstream transaction for which they provide no added value. On the other hand, if patent holders have such rights, it is difficult to fault a right-holder from enforcing them. It seems that the nature of intellectual property rights often leads to such twisted results unless Congress or a judicially-crafted legal doctrine cuts off the firepower of the intellectual property right.
The Supreme Court soon will resolve the patent license conflict between Quanta and LG; but, this contemporary intellectual property conflict goes beyond the immediate dispute between the parties, and, ultimately, may require potential answers from Congress to questions that are likely to tread upon the waters of a larger body of important, interrelated issues: such as reassessing the appropriate balance between vigorous disruptive innovation and the scope of property rights for incumbent intellectual property holders.
Tuesday 02 October 2007 at 12:41 am
New York Times columnist Thomas Friedman observed in his popular book, The World is Flat, that the convergence of technology and economic events were flattening the globe in ways that challenged conventional thinking about foreign policy and globalization. Similarly, law is flattening. Global competition is requiring law to be flat.
Law is flattening because globalization is increasingly challenging our conceptions of the practical effect of business transactions that bleed across borders of nation states.
Certainly, we will continue to look toward the U.S. Supreme Court for dispositive rulings, but, even among Supreme Court justices, there is no unanimity on the relevance of extraterritorial sources of law. Moreover, since business is increasingly conducted on a global scale, the same reasons that often render federal laws more effective than state laws for certain firms doing business across the nation, similarly, support harmonized business law on the global stage.
On September 17, 2007, the European Court of First Instance issued a decision in the Microsoft antitrust case that is difficult to ignore for its contrast in how a similar issue was resolved by American courts. Far more prescriptive than American courts, the European Commission provided broad guidance on the conceptual relationship between intellectual property rights and antitrust law. In Europe, today, there are more restrictions than in the United States on when a dominant firm may refuse or withhold licensing its intellectual property from a competitor or business partner.
Yet, if law is genuinely getting flat in a manner similar to Friedman’s thesis, then the EC’s ruling ultimately will have implications far beyond European borders. Microsoft (and similar dominant firms) will have to plan their business transactions for the practical reality that a new global restriction or condition now exists on the ability of dominant firms to prevent third party interoperability by bundling or integrating products to maintain a dominant position.
Saturday 01 September 2007 at 4:53 pm
Friday 03 August 2007 at 11:29 am
“The patent system, right now, is tilting out of bounds,” said Chip Lutton, chief patent counsel at Apple.
Lutton's right. for more click
here.
Sunday 22 July 2007 at 8:13 pm
There are an incredible number of reviews of the iPhone, and many of them are either overly effusive or pedantic and silly. I read one article that I thought stood out as a practical and informative appraisal of the value of an iPhone - - notwithstanding the article's title.
Joe Hutsko, a contributing writer for
MSNBC, discusses his experience shutting:
off the computer and [making] a pact to spend the next week or so using the iPhone
here.
Of course, for most power users, no cell phone - - no matter how "smart" it is - - can replace a laptop, but Joe Hutsko's practical attempt to use the iPhone to do a day's worth of mobile computing illustrates what a good cell phone with reliable data connectivity should be able to do for us.
The Supreme Court returns to session the first Monday of October 2007.
Sunday 15 July 2007 at 8:41 pm
Renowned First Amendment lawyer Martin Garbus has published a book that focuses on the U.S. SUPREME COURT:
The Next 25 Years: The New Supreme Court and What It Means for Americans
Garbus draws upon his extensive knowledge of Constitutional law to warn of a threat of an incoming
textualist bench (lead by Chief Justice Roberts) set on rolling back more than a century's worth of hard-won reforms. Regardless of your view of Constitutional issues, this is a provocative book.
Tuesday 03 July 2007 at 4:36 pm
Parents v. Seattle is not a law and technology decision, but it is an important decision in the area of civil rights and I think its importance betrays our usually restricted focus on technology-related issues on the SCTL Blog.
In a post on
Blackprof.com, I argued that the Supreme Court’s decision in Parents v. Seattle fails as a ruling justified by what we may view as morally correct. Although that point warrants further explanation, here, I am only going to focus upon what I see as the paternalism emanating from the plurality opinion.
Strictly speaking, the court ruled that government has no compelling interest in promoting diversity by the use of race standing alone as the determinative factor in non-postsecondary public school admissions. Therefore, such use is unconstitutional (under the Equal Protection Clause).
Looking at
Gratz, Grutter and
Parents v. Seattle for distinctions, it is apparent that the Court scrutinizes the fact-finding of the lower courts in search of evidence whether race is the sole factor or one among many. Notably, the defendants in these cases have consistently contended that race is one among many factors so the Court does not rest its judgment on the objectives of the government. Instead, the Court searches the record (and more) for its own assessment. If done carefully, the Court’s search might be a worthy venture, but I am doubtful. Are the three cases cited above really that different or is the Court reserving for itself the application of an amorphous standard that is pushing the principle of Brown v. Board toward a point of irrelevance?
Justice Scalia, for example, joined Chief Justice Roberts’ opinion, which approvingly cited
Grutter for its permissible use of race in post-secondary admissions. But, Justice Scalia’s opinion in
Grutter (Scalia dissented in part and concurred in part) called Michigan Law School’s critical mass admissions a “sham.” Justice Scalia also explicitly agreed with Justice Thomas who questioned the veracity of Michigan’s asserted interest in diversity.
In my view, despite Chief Justice Roberts’ asserted distinctions between
Grutter and
Parents v. Seattle, Scalia and Thomas seem poised to find the government’s use of race in admissions lacking compelling interests. Indeed, it is doubtful that two of the four justices signing onto the plurality opinion genuinely see any difference between
Grutter and
Parents v. Seattle other than the practical difference in how the justices voted.
Since the Court’s use of strict scrutiny provide it with apparently broad discretion to recast the factual predicates of an admissions program any way the Court deems (there seems to be very little deference to lower courts or to schools on such facts), I do not see any principled basis for the Court’s rulings in these cases other than rank paternalism. This does not bode well for the future of
Brown v. Board.
As Justice Scalia stated plainly in
Grutter, in his view, the “Constitution proscribes government discrimination on the basis of race, and state-provided education is no exception.” This is an absolutist position that embraces the ill conceived “separate, but equal” doctrine. This means that
Brown v. Board needs intensive care to save it; to the extent that Justice Kennedy disagrees with the plurality opinion in
Parents v. Seattle, his future votes could help resuscitate
Brown v. Board.
Monday 25 June 2007 at 11:54 pm
Credit Suisse v. Billing (June 18, 2007)
Admittedly, this case, Credit Suisse v. Billing, is barely, nominally, appropriately considered a case involving law and technology. It's a slow day...
Still, in Credit Suisse v. Billing, a group of investors filed suit against an investment bank alleging that the investment bank violated antitrust laws when it formed syndicates to help execute initial public offerings (IPOs) for several hundred technology-related companies.
The investors argued that the investment bank unlawfully agreed that they would not sell newly issued securities to a buyer unless the buyer committed (1) to buy additional shares of that security later at escalating prices (known as "laddering"), (2) to pay unusually high commissions on subsequent security purchases from the underwriters, or (3) to purchase from the underwriters other less desirable securities (known as "tying").
Apparently, to avoid the odd circumstances where evidence that shows unlawful antitrust activity may also be lawful securities marketing activity, the court's majority agreed that federal securities law impliedly precludes application of antitrust laws to the conduct in question.
Justice Thomas was the lone dissenter. Thomas concluded that the case against the investment bank should go forward because the Court did not have to resolve a purported conflict between antitrust law and securities law.
Justice Breyer authored the majority opinion (7-1; Kennedy took no part in deciding the case).
Monday 25 June 2007 at 11:28 pm
The Supreme Court's recent unanimous decision in KSR International Co. v. Teleflex, Inc. criticized and modified the obviousness standard used in patent cases. The decision may make it more difficult to obtain new software patents or to protect existing software patents because the Court expressed agreement that formalistic views of what constitutes nonobviousness under Patent law has resulted in lawyerly drafting of patent claims making much ado about nothing. In other words, some patents are invalid because the invention is as obvious as a headache - - even if the word headache never appeared in a medical text book.
According to the Court - "The diversity of inventive pursuits and of modern technology counsels against confining the obviousness analysis by a formalistic conception of the words teaching,
suggestion, and motivation, or by overemphasizing the importance of published articles and the explicit content of issued patents. In many fields there may be little discussion of obvious techniques or combinations, and market demand, rather than scientific literature, may often drive design trends. Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, for patents combining previously known elements, deprive prior inventions of their value or utility."
Software programming, by its nature, often involves building upon the obvious and combining previously known objects or code.
Friday 15 June 2007 at 10:18 pm
A federal judge in Los Angeles, U.S. Magistrate Judge Jacqueline Chooljian, ruled that a computer server's RAM, or random-access memory, is a tangible document that can be stored and must be turned over in a copyright infringement lawsuit by the MPAA against the Netherlands-based Torrent Spy website. The decision is widely viewed as illustrative of the mistakes judges make in applying law in a case when they do not understand the facts.
The error in this case - - albeit, the case concerns Federal Rule of Civil Procedure - Rule 34(a) - - echoes the error that judges make in copyright and patent cases involving software. Namely, courts are confused as to how best to determine whether electronic data is stored in a tangible, fixed manner.
The appropriate answer depends on an understanding of computers and software, in part, and on legislative (or, policy-making) guidance. The limited tools of legal analysis are inadequate for the task. Hence, Judge Jacqueline Chooljian based her decision on the inadequacy of legal precedent. The judge looked for analogies in the law and found one in a case that, itself, was based on the inadequacy of legal precedent when it was decided (Mai Systems v. Peak (9th Cir. 1993). Consequently, we have courts bootstrapping bad law to make more bad law. What a mess these courts are making.
Given the increasing importance of electronic commerce, I am shocked and, at times, horrified by the continuing troublesome outcomes produced by some of our courts when the target of litigation is technology.
Even when the lawyers practicing before them well-understand the fine points of the technologies targeted by the litigation, too many courts (judges or juries) seem to lack the expertise to engage in reliable fact-finding.
Judge Jacqueline Chooljian was presiding over a case involving the MPAA and TorrentSpy. The movie industry challenged TorrentSpy by accusing it of copyright infringement. The
court concluded that RAM data was discoverable by plaintiffs in a copyright infringement lawsuit. I suppose you cannot fairly express disapproval of plaintiffs' lawyers who zealously pursue dubious claims, if it is widely viewed that it is the court's duty to decide whether the claim is dubious. Yet, this system works well only when the court is up to the task before it.
