Author: Delain Law Office

Apple Customer Service

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I got an email purportedly from iTunes on Thursday telling me that I had purchased a piece of software for $899.99, adding in sales tax (at the proper rate), giving me a registration key and giving me a link to go for “support.” The email looked authentic; it correctly used Apple’s trademarks and it had me — um — worried.

Problem: I never made an $899.99 purchase from iTunes in my life.

I called Apple Support and, after being shuffled around a bit, I ended up with a customer service rep who was absolutely on the ball; she had me on hold, but every couple of minutes she checked back in with me to let me know she hadn’t forgotten me. She tracked down the source of the email (it turned out to be a phishing email) and got right back with me to let me know not to worry about the email unless I had clicked a link (I never click links in emails I don’t recognize; no one should).

Apple did its job well, and I am delighted with this person I spoke with. She was pleasant, professional and personable. She handled my problem with grace.

Sometimes customer service actually happens; it did for me. It’s a small thing to be thankful for this Thanksgiving weekend, but the small things add up. Happy Thanksgiving weekend to one and all!

The FTC Finally Targets an IP Troll

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For any who don’t know, a “troll” is a company (and its lawyers) that sends out thousands of cease-and-desist letters threatening a lawsuit against a supposed infringer of that company’s supposed intellectual property. It’s a nasty practice that has brought the trolls (and their lawyers) many hundreds of thousands of dollars over the years. Finally, the Federal Trade Commission is beginning to protect the innocent public against these unscrupulous “licensing” demands.

American Broadcasting Companies vs. Aereo, Inc.

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A couple of weeks ago, overshadowed by the Hobby Lobby decision, SCOTUS handed down a copyright decision that may substantially limit the ability of transmitters to transmit copyrighted broadcasts without a license to do so.

In American Broadcasting Cos. v. Aereo, Inc., 573 US ___ (2014), Aereo is a subscription broadcasting service that sold “…to its subscribers a technologically complex service that allows them to watch television programs over the internet at about the same time as the programs are broadcast over the air.” Slip Op. at 1. The technology is detailed in the case, so I do not reproduce it here; suffice it to say that through a complex series of technological events, each Aereo subscriber ends up having his or her own dedicated antenna through which copyrighted content is streamed to one computer only. The US District Court for the Southern District of New York, affirmed by the US Court of Appeals for the Second Circuit, found that this technology does not infringe the rights of the copyright holders of the shows that Aereo streams to its users because, first, Aereo does not “perform” within the meaning of the Copyright Act and, second, even if it does “perform,” it does not do so “publicly” because there is a dedicated antenna connected to only one computer, making the streaming a private showing, thus falling outside the “public” performance requirement of the Act to qualify as infringement.

SCOTUS disagrees. In a 6-3 decision delivered by Justice Breyer (the dissent comprises Justices Scalia, Thomas and Alito; all others concur in the majority opinion), the Court decreed that the 1976 Copyright Act was put in place, in large part, to overturn their decision in Fortnightly Corp v. United Artists Television, Inc., 392 US 390 (1968), which held that community-antenna television falls outside of the scope of the Copyright Act of 1952. Given the clear intent of Congress to make such activities fall very definitely within the scope of the Copyright Act, and given that Aereo’s activity are not substantially different from those of Fortnightly, the Court felt duty-bound to overturn the Court of Appeals for the Second Circuit’s holding that Aereo’s activities do not infringe copyright. SCOTUS holds for the plaintiff in determining whether (a) Aereo “performs” within the meaning of the Act and (b) Aereo performs “publicly” within the meaning of the Act.

There is language in the case that indicates that this case can be read narrowly, but this case puts rebroadcasters on notice: The act of rebroadcasting is a “transmission” within the meaning of the Act, and the viewer and broadcaster “perform publicly” within the meaning of the Act.

I advise my clients that it’s always easiest, best, cheapest to get a license to use the copyrighted works of others. This case just goes to show that this advice is still good.

The oral arguments on both sides are actually interesting for those of us who like copyright matters.

SCOTUS Got It Right — I Think

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Today, the US Supreme Court handed down the long-awaited Hobby Lobby decision (Burwell v. Hobby Lobby Stores, Inc., ___ US ___ (2014). In the decision, they overturned the Obama administration’s insistence that Obamacare overrides the First Amendment.

We all know the facts of this one. Hobby Lobby, Inc., a closely held corporation, is owned by a group of persons who strongly believe on religious grounds that abortion is wrong and don’t want to pay for it through the Affordable Care Act, which covers abortions. The government said no, you don’t qualify for an exclusion, and the fight was on.

42 USC §§ 2000bb-1(A) and (B) says that the government cannot “…substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.” Today’s decision in Hobby Lobby upholds this law, and, coincidentally the freedom of religion we are all guaranteed under the First Amendment to the Constitution.

Of course, Justice Ginsburg does have a point in her dissent: “Would the exemption…extend to employers with religiously grounded objections to blood transfusions (Jehovah’s Witnesses); antidepressants (Scientologists); medications derived from pigs, including anesthesia, intravenous fluids, and pills coated with gelatin (certain Muslims, Jews, and Hindus); and vaccinations[?]…Not much help there for the lower courts bound by today’s decision.”

As with any decision, the trick is to figure out how to read it. If, as Justice Ginsburg says, the decision is broad enough in application to carry over to these procedures, that will keep SCOTUS in business for many terms to come as the parameters of today’s decision get hammered out. If, though, the case is read narrowly, applying only to religious objection to terminating a pregnancy, Justice Ginsburg’s objection to the decision is defeated. However, I am not the person who will interpret the decision as time goes by; that gets left to those who sit on the judicial benches, and there are likely, until SCOTUS rules again, to be splits on this issue throughout the circuit courts. The import of the decision may well be to cause women to have to pay for contraception, but freedom of religion is guaranteed by the Constitution; freedom of contraception is not.

I don’t always agree with the High Court, but I think they got this one right — and I am by no means a radical pro-life proponent. I think that women should indeed have access to contraception, but this decision does not overturn women’s access to contraception; it merely asks women to pay for that contraception, and the government is likely to come up with a way to provide that contraception for those women who are employed by Hobby Lobby and companies with similar visions. This does not overturn the abortion rights in the United States. Abortion is still reasonably freely available for the employees of any closely held company that objects to providing funding for it on religious grounds. But don’t ask those whose religious convictions hold that the soul enters the human zygote at conception to pay for the woman carrying that zygote to terminate that life.

Feel free to agree or disagree with me in the Comments.

USPTO and Politically Correct Speech

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The US Patent & Trademark Office issued a ruling that the name of the Washington, DC NFL football team is derogatory and offensive toward Native Americans. They cancelled the trademark.

The Washington team has had its name since 1933. They started out in Boston as the Boston Braves in 1932, becoming the Boston Redskins when they moved to Fenway Park in 1933. Boston, in colonial times, had a friendly relationship with the surrounding Native American nation; the Native Americans and their new neighbors coexisted peacefully (for the most part) and helped each other out. The team’s founder respected that history when he named his team after the proud Native American.

The football team moved to DC in 1937 and was, from that day til this, known as the Washington Redskins. Their logo is a very handsome Native American brave, who signifies very well a tough and successful football team.

Evidently the USPTO is falling for the current trend toward politically correct speech, something a government agency has no business doing. This mark is almost 100 years old. It is a famous mark. And it will now cost the Redskins franchise $millions to rebrand. That, of course, will be reflected in an increase in ticket prices, which deleteriously affects the public. This is all for something I have trouble comprehending. I would think that naming a successful football franchise after the proud people who originally found this continent and helped their neighbors through tough times would be something that honors the Native American, not something that denigrates them.

A line needs to be drawn somewhere on all this political correctness; canceling an old and famous mark that honors the Native American by naming an NFL franchise after them goes, in my book, more than a little overboard.

All this politically correct speech has me flummoxed. I give up. I shall continue to simply call a spade a spade; if you find that to be offensive or politically incorrect, you’re welcome to call me whatever politically incorrect term for a white Anglo-Saxon Protestant you can come up with — the two I know of are a WASP and a honkey (a term that I find hilarious because it is actually accurate). I won’t get mad over noises.

Raging Bull Laches On

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The US Supreme Court has issued a decision in the Petrella v. MGM, 572 US ___ (2014).

The equitable doctrine of laches says that if a plaintiff waits too long before bringing a lawsuit, that suit cannot be heard. It’s a common-law version of a statute of limitations. Under a statute of limitations, a case can be forever dismissed because a case was brought too late. Under the equitable doctrine of laches, a case can be forever dismissed because the plaintiff failed to timely bring suit and the defendant was unduly prejudiced by the delay.

In Petrella, the movie Raging Bull (1980) is accused of infringing the copyright in a screenplay written and registered with the US Copyright Office in 1963. Raging Bull is, of course, based on the life of Jake LaMotta. LaMotta had a friend, a writer named Frank Petrella, who co-authored several works on which Raging Bull was based; the copyrights in those works were properly registered in the 1960s and 1970s. While Frank Petrella and his co-author of that screenplay assigned rights and renewal rights to United Artists (now a subsidiary of MGM) in 1979, when Frank died in 1981 (during the first term of the copyright on the Raging Bull screenplay), renewal rights reverted to Frank’s estate under Stewart v. Abend, 495 U.S. 207 (1990), and ultimately to his daughter and heir, Paula Petrella. Paula renewed the copyright in the only one of the three works on which Raging Bull is based in which she could do so, and is now the sole owner of that copyright. In 1998, Ms. Petrella sent notice to MGM that Raging Bull infringes her copyright and threatened suit. In January, 2009, that suit materialized with Ms. Petrella seeking monetary and injunctive relief limited to acts of infringement occurring on or after January 6, 2006 (that is, all acts that occurred within the three-year statute of limitations). MGM promptly answered with the defense of laches, claiming that the delay in filing from 1998 to 2009 was unreasonable and unduly prejudicial. The US District Court for the Central District of California granted the defense and dismissed the case on those grounds. Petrella appealed to the US Court of Appeals for the Ninth Circuit, who affirmed the District Court’s decision. She then appealed to the US Supreme Court, who granted certiorari.

The High Court reversed the decisions below. In a 6-3 decision, the Court decided:

The Ninth Circuit erred, we hold, in failing to recognize that the copyright statute of limitations, §507(b), itself takes account of delay. … [A] successful plaintiff can gain retrospective relief only three years back from the time of suit. No recovery may be hadfor infringement in earlier years. Profits made in those years remain the defendant’s to keep.

Brought to bear here, §507(b) directs that MGM’s returns on its invest­ment in Raging Bull in years outside the three-year win­dow (years before 2006) cannot be reached by Petrella. Only by disregarding that feature of the statute, and the separate-accrual rule attending §507(b), see supra, at 4–5, could the Court of Appeals presume that infringing acts occurring before January 6, 2006 bar all relief, monetary and injunctive, for infringement occurring on and after that date. See 695 F. 3d, at 951; supra, at 9–10.13 Moreover, if infringement within the three-year look-back period is shown, the Act allows the defendant to prove and offset against profits made in that period “deductible expenses” incurred in generating those profits.§504(b). In addition, the defendant may prove and offset “elements of profit attributable to factors other than the copyrighted work.” §504(b). The defendant thus may retain the return on investment shown to be attributable to its own enterprise, as distinct from the value created by the infringed work. See Sheldon v. Metro-Goldwyn Pictures Corp., 309 U. S. 390, 402, 407 (1940) (equitably apportioning profits to account for independent contribu­tions of infringing defendant). See also infra, at 19–22 (delay in commencing suit as a factor in determining contours of relief appropriately awarded).

Last, but hardly least, laches is a defense developed by courts of equity; its principal application was, and re­mains, to claims of an equitable cast for which the Legisla­ture has provided no fixed time limitation. See 1 D. Dobbs, Law of Remedies §2.4(4), p. 104 (2d ed. 1993) (here­inafter Dobbs) (“laches . . . may have originated in equitybecause no statute of limitations applied, . . . suggest[ing] that laches should be limited to cases in which no statute of limitations applies”). Both before and after the merger of law and equity in 1938, this Court has cautioned against invoking laches to bar legal relief. See Holmberg v. Armbrecht, 327 U. S. 392, 395, 396 (1946) (in actions at law, “[i]f Congress explicitly puts a limit upon the time for enforcing a right which it created, there is an end of thematter,” but “[t]raditionally . . . , statutes of limitation are not controlling measures of equitable relief ”); Merck & Co. v. Reynolds, 559 U. S. 633, 652 (2010) (quoting, for its current relevance, statement in United States v. Mack, 295 U. S. 480, 489 (1935), that “[l]aches within the term of the_statute of limitations is no defense [to an action] at law.”); County of Oneida v. Oneida Indian Nation of N. Y., 470 US 226, 244, n. 16 (1985) (“[A]pplication of the equitable defense of laches in an action at law would be novel indeed.”)

 The holding that laches cannot be used as an equitable defense within the period of the statute of limitations was made by only six of the Justices; the remaining three, who sit at the conservative end of the bench, disagree, stating:

[Laches] applies in those extraordinary cases where the plaintiff “unreasonably delays in filing a suit.” National Railroad Passenger Corporation v. Morgan, 536 US 101, 121 (2002), and, as a result, causes “unjust hardship” to the defendant. Chirco v. Crosswinds Communities, Inc., 474 F.3d 227, 236 (CA6 2007) (emphasis deleted). Its purpose is to avoid “inequity.” Galliher v. Cadwell, 145 US 368, 373 (1892). And, as Learned Hand pointed out, it may well be

“inequitable for the owner of a copyright, with full notice of an intended infringement, to stand inactive while the proposed infringer spends large sums of money in its exploitation, and to intervene only when his speculation has proved a success.” Haas v. Leo Feist, Inc., 234 F. 105, 108 (SDNY 1916).

Today’s decision disables federal courts from addressing that inequity.

In this case, I actually agree with the majority’s decision. I agree with Learned Hand’s comment that it’s not nice for a copyright holder to let the proposed infringer take the risk then swoop in to reap the rewards, but that is not what happened here. Raging Bull came out in 1980. MGM invested heavily in the film in the late 1970s and early 1980s. While yes, they still market the film today and they market it based on new technologies, the marketing expense has decreased dramatically because of the film’s popularity, awards status, and fame. Really, all MGM has to do is produce the film on a new technology and sales are virtually guaranteed. Also, Petrella does not seek damages for infringement that may or may not have occurred in the 1980s, 1990s or even the early 2000s; her suit seeks damages only within the confines of the statute of limitations, which I think moots the dissent’s quote of Judge Hand.

We certainly do not want to impose an unneeded inequity on any defendant, but I don’t think this decision does that. The inequity of delay is addressed through the statute of limitations. There is a time-certain period outside of which a defendant cannot be successfully sued. That limitation is placed on the plaintiff by statute. Today’s decision does not allow a plaintiff to sue outside of the statute of limitations, which keeps the delay to a minimum.

DirecTV and AT&T Merge

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By now, everyone’s heard that AT&T is proposing to buy DirecTV for $48.5 billion in cash and stock.

I’m wondering why.

DirecTV and AT&T compete in a few marketplaces in the US, but not really in enough markets to justify a $48.5 billion takeover, especially in the current technological environment. DirecTV’s technology will do nothing to enhance AT&T’s current technology in that DirecTV does not offer internet service and AT&T cannot use it to improve their mobile service. More and more people watch video online, on sites like YouTube (owned by Google, Inc.) and Netflix, meaning the additional customer base for pay TV is likely to continue to dwindle (last year, the number of households that use pay TV actually dwindled). Satellite TV has its issues, too; when I had DirecTV, any interference with the direct line of vision between the dish and the satellite pixellated the picture or canceled the transmission altogether. Snowstorms and rain storms are examples of “interference with the direct line of vision.” In the Great Northeast, we get both on a regular basis.

Regulators are likely to have concerns over this merger, too. This would reduce the number of pay TV options available to consumers in about half of the US markets. Because decreased competition can have the effect of raised prices, this would seem to me not to be in the public’s best interest. This merger makes AT&T the second-largest provider of pay TV services, assuming all of the current customers stick with them (Comcast/Time-Warner is larger). Monopolies are not popular with regulators, either.

I can think of all these reasons for AT&T not to enter this merger; I can’t think of a single reason for them to do so.

So … why?

Washington Redskins

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It’s been quite some time since I posted to this blog, and I have to come back with a rant.

The Washington Redskins are an NFL football franchise. Nothing more, nothing less. However, their name is evidently a political fireball.

The pro column for changing the name is limited to political correctness, which, I’m sorry, I have a problem with. We can’t call a spade a spade these days without offending someone. I don’t even know if those who are of Native American descent are offended by the NFL’s calling their Washington team the Redskins. Me, I look at it as the team based in our nation’s capital is honoring the Native Americans. But I guess that’s not the politically popular view these days.

The con column for changing the name is legion. The team will have to spend $millions to re-brand itself. The logo will have to be changed. The colors will have to be changed. The stadium and road signage will have to be changed. The direct marketing collateral will have to be changed. And what about all those franchise-specific marketing paraphernalia — the mugs, the hats, the key rings, the sports cards, the kids’ uniforms bearing RG3’s number? Those will all have to be changed. Redskins sports memorabilia bearing the Redskins logo and name won’t exist, and that will do a number on the market for that memorabilia.

Can’t we just call a spade a spade?

Wiley v. Kirtsaeng—Changing Copyright Ownership in the USA?

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Wiley v. Kirtsaeng, S.Ct. Docket No. 11-697, one of the most important intellectual property matters to come before the Supreme Court in recent years, re-examines the “first sale” doctrine in copyright law. Stare decisis tells us that owners of the individual copies of copyrighted works are free to resell, lend, or give away their legal copies of books, paintings, software, DVDs, CDs, and so on without permission from the copyright holder, no matter where the copyrighted item originated. Now, though, book publishers, software companies, and the movie and music industries, who want to set different prices for different markets, argue that the doctrine should apply only to goods produced in the U.S.

John Wiley and Sons, a major textbook publisher, is doing battle over this very question with one Supap Kirtsaeng, a student from Thailand who studied at Cornell and USC. The case came into being when Kirtsaeng discovered that textbooks almost identical to those in the U.S. market were considerably less expensive in Asia. Being a money-hungry, entrepreneurial student, he had friends and family members send multiple copies of needed books to him, purchased at Asian prices, which he then resold to his fellow students at less than the cost of the US books but more than he paid for them. When Wiley discovered this, they sued Kirtsaeng for infringing their copyrights in the resold books; the Court of Appeals for the Second Circuit ruled in Wiley’s favor.

Kirtsaeng asks the High Court to reverse the Second Circuit’s ruling, arguing that the first sale doctrine prohibits Wiley from enforcing any copyright against the sale of any work that was previously sold.

This notion goes far beyond this one case. If the Nine Wise Ones decide that the First Sale Doctrine does not apply to copyrighted materials that do not originate in the USA, dissemination of copyrighted materials will need a massive overhaul. At this point, museums freely display copyrighted works; they would lose the ability to do that. Salvation Army and Goodwill Industries, who regularly resell copyrighted works at a deep discount, would be required to pay a royalty for resold works, which, necessarily, would raise the prices and have a heavy impact on cash-poor individuals. Ronald McDonald House, which freely lends copyrighted materials regularly to the families of very sick children staying with them, would have to charge a fee. Much of eBay’s business would come crashing down because the free exchange of already-purchased copyrighted works would be stifled. Even your neighborhood library would feel the pinch, and the free lending library would cease to exist.

And all because the publishers want to enforce different prices in different markets.

I don’t think much of this; I like free, community-supported lending libraries. I like being able to view modern art in museums. When I had cause several years ago to use the services of Ronald McDonald House, I very much appreciated the easy availability of DVDs and video tapes (that dates the time). The thought that the free lending and giving systems currently in effect would come to an end is an anathema to me.

Patent Secrets

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Elon Musk, founder of SpaceX and co-founder of Tesla Motors & SpaceX, said during his interview with Wired Magazine:

“I can’t tell you much. We have essentially no patents in SpaceX. Our primary long-term competition is in China—if we published patents, it would be farcical, because the Chinese would just use them as a recipe book.”

The ultimate goals of patent and trade secret are the same: to protect invention. They go about it in completely different ways.

Patent is, by definition, an exercise in disclosure. The deal the inventor strikes with the government which issues the patent is that s/he can have a monopoly on the invention, but only if s/he discloses the best mode to make and use the invention, and only for a limited period of time.

Trade secret is, by definition, an exercise in secrecy. No disclosure is made, no governmental grant of permission occurs, but the inventor can keep the trade secret for as long as s/he can keep the secret. Some trade secrets have lasted for hundreds of years.

So yes, the patent system in a big repository for the dissemination of information about inventions. It’s designed to be that because sharing the information through the patent system (so the theory goes) sparks further invention. In the US (I’ll get to China in a minute), the grant of patent rights expires after really a very short time, enabling others to glom onto the invention and make it cheaper, though not necessarily better, than does the original rightsholder (generic drugs are a prime example of this phenomenon).

China is notorious for its lack of respect for intellectual property in general. Although they are trying to change this, the idea that someone can own a product of the human mind is simply completely foreign to that culture. Therefore, the Tesla/SpaceX decision not to patent its invention, but to protect the invention through trade secret, is a strategic and conscious decision. They want to protect their invention from prying eyes and infringers. They do run the risk of loss of the secrets through disclosure or independent invention, but they have done their risk/benefit analysis and made their business decision. It may be the right decision for them, it may not be; that will be determined by time.