PA Law Blogs » Intellectual Property

Experts Say Companies with Strong Intellectual Property Strategies Raise More Capital

Admin2 — Mon, 31 May 2010 12:00:15 +0000

With the economy on the rebound, experts are beginning to find a clear correlation between firms that have invested in intellectual property and capital market success. On the other hand, they also find that companies that cut their investments in intellectual property, lagged behind.

According to a Business Wire report, MIT Sloan Senior Lecturer Joseph Hadzima Jr. believes that the companies that win big in the future will be those that used these tough economic times to “put together intellectual property strategies that support their broader business strategies.”

A Government Accounting Office (GAO) study showed that for a small company, the cost to maintain a patent in the top 10 industrial countries was from $350,000 to $500,000. In addition to being cost-prohibitive, the process also takes a minimum of two years in the United States. That is probably one reason why patent applications have declined in the last two years, with businesses facing increasingly stringent economic decisions to make.

One way some companies have dealt with this matter is to outsource the application process to countries such as India. But the solution here may be to connect the patent process to an intellectual property plan that is given much thought and organization for a strategy. As Hadzima advises, it is important not to just file patent applications. Instead, he advises, that it is beneficial to check that they adhere to your present and future tactical strategies.

Class-Action Suits Regarding Virtual Property Ownership Filed against Second Life

Envoca — Fri, 07 May 2010 01:17:37 +0000

The scope of virtual world developments and brand marketing on the Internet seems to be limitless, with Second Life as one of the most popular programs. However, paying virtual world participants (residents) have filed a class-action lawsuit against Second Life and its founder for altering its questionable and deceitful terms of virtual property ownership.

According to a www.news.cnet.com article, one suit claims that the company’s promise of virtual property ownership never existed to begin with. Others claim that Second Life terms of virtual property ownership were altered without their knowledge, making it so that they were obligated to agree to a new terms of service that deprived them of their ownership rights to virtual property and goods. The article mentions that a Second Life resident filed a lawsuit in Pennsylvania in 2007 asking for his $8,000 investment in virtual goods and property to be returned after his account was made inactive. This case settled and the resident’s account was restored.

Based on Second Life terms of service, users are supposed to be able to possess copyrights for any content or materials that they create, and the server and client are expected to supply straightforward digital rights management task abilities. The terms of the current class-action lawsuit asserts that Linden Lab, Second Life’s parent company, intentionally drew in and encouraged consumers through marketing efforts throughout the U.S. to invest authentic money into the program. In doing this, consumers were promised that the virtual land and property that they bought, in addition to the material they came up with, would become theirs to own. And this apparently isn’t the first time that Second Life has been challenged. The report states that Second Life had to prohibit residents from establishing in-world financial institutions due to a sudden increase in banking scandals in 2008.

In announcing that the first quarter of this year brought them more than 500,000 users dynamically participating in the virtual market with about $160 million in user-to-use transactions, one can only imagine the range that these class-action lawsuits may be capable of reaching. The allegations against Second Life that it intentionally misled consumers and changed their terms of service agreement without appropriate warning to users raises several legal matters of concern in terms of intellectual property rights. These complex issues are further emphasized by the claim that Second Life may have denied users access to their property.

The iPhone Doesn’t Fall Far From the Tree

Envoca — Thu, 22 Apr 2010 17:05:37 +0000

Industrial design is a leading market bringing innovative and advanced technological products to the fingertips of consumers throughout the world. Even a person with a “black thumb” for technology is likely to be drawn to the newest fad in industrial products, which currently seems to be the iPhone. However, according to a Reuters article, various sources claim that this product was taken from Apple and bought by Gizmodo.

While the article quotes one writer who alluded to it being a widespread understanding among insiders that the iPhone was stolen from Apple, Gizmodo’s tech blog said it obtained the iPhone after it was left in a bar in California. While it seems unlikely that a person entrusted with a new product would be so flippant in leaving an iPhone prototype at a bar, this could raise issues of industrial design rights under intellectual property laws. Rumors and speculation aside, all is not lost for Apple; the company has not commented on any of the sources citing the iPhone being stolen and hardware experts anticipate the next version of the iPhone to hit stores this summer.

The iPhone’s new industrial-style design is comprised of a higher-resolution screen, front-facing camera with a flash, a larger battery, and many other new features. The last major design shift of the iPhone was in 2008 with the 3G model. After taking into account the fit and finish of the new iPhone’s case, the specifics Gizmodo mentions about the device’s internal parts, and the time left before the anticipated summer debut of the next iPhone model, the CEO of a repair shop for consumer devices in Michigan believes that the product actually does derive from Apple. However, he contests the iPhone being taken from Apple in that the large quantity of desirable features within the product is not characteristic of Apple in responding to the substantial demands of customers.

While the extent of the new iPhone’s origins may not be crystal clear at this time, there is no doubt that Apple has plenty of competitors looking to advance their products ahead of the successful and far-reaching company. Industrial designers work hard to improve a product to cater to user ergonomics, aesthetic preferences, and overall usability. Industrial design rights fall under intellectual property law which protects the ownership of a product’s visual design and complex functional components.

The Battle to Enforce Intellectual Property Laws

Admin2 — Wed, 14 Apr 2010 10:00:29 +0000

According to a recent LA Times Blog article, the Obama Administration faces at least three major battles regarding how intellectual property laws in the United States are being enforced. The pressure to heighten laws against piracy and initiate other means of intellectual property enforcement comes mainly from Copyright owners and performers.

The first debate centers on so-called “secretive negotiations” over the Anti-Counterfeiting Trade Agreement that was initiated under President George W. Bush. The Obama Administration has received requests from Copyright holders to create provisions to make Internet Service Providers (ISPs) put more effort into preventing online piracy. One suggestion is that ISPs could cut-off broadband accounts that have been used multiple times to abuse the law.

Another heated intellectual property issue relates to performance artists and copyright owners demanding that the Federal Communications Commission alter proposed Net neutrality rules. These tech supporters are concerned that a way needs to be created for content providers to make deals with ISPs so that the flow of legitimate movies and music online can be distinguished from bootleg copies. On the flip-side, groups such as Public Knowledge and the Electronic Frontier Foundation are opposed to making Net neutrality rules geared more towards copyright enforcement tools.

The third matter at hand arose when the White House Office of Intellectual Property Enforcement Coordinator opened up the floor to receive input from the public on its strategic plan for intellectual property enforcement. The response to this request includes far too many points to include here. However, just to get an idea, seven copyright owner and performer groups, including the Screen Actors Guild, the RIAA, and the MPAA added to the list.

While strengthening enforcement for repeat piracy offenders under a variation of “three strikes” should help prevent illegal copying from getting even more out of hand, there is still much to consider in terms of how far restrictions should go. The main concern with more enforcement is that copyright holders will not have as much responsibility as before, thus handing control over to third parties. In addition, viable distribution technologies should not be cut-off either. It makes sense for intellectual property laws to evolve with technology’s exponential scope, but just how far is too far?

High School Sued Over Alleged Spying in Students’ Homes

Admin2 — Fri, 09 Apr 2010 12:00:15 +0000

According to an International Business Times article, parents of a student at Harriton High School in Philadelphia have filed a suit against the school for allegedly spying on their child via a webcam installed on a laptop. The school-issued laptop was given to students so they could complete homework assignments. The parents became suspicious of the spying activity after the school notified them that their son had engaged in “improper behavior in his home.”

A later article published in The Washington Post reported that a school official had seen the student eating a piece of candy and had mistaken it for a pill and assumed he was dealing drugs. The parents were reportedly enraged and confronted the school’s administrators, who later revealed that they had been watching students by recording them using the laptop’s built-in camera.

The inclusion of clandestine software on computers is known as “spyware.” Although the computers were school property, capturing images and footage from a student’s home likely infringes upon several privacy laws. The suit filed by the parents of the student as a class action made claims of “theft of intellectual property” under the Computer Fraud Abuse Act, “Interception of electronic communications” under the Electronic Communication Privacy Act, violations of the “Stored Communications Act” and “Civil Rights Act,” as well as charges of invasions of privacy and violations of Commonwealth law in Pennsylvania regarding wiretapping and electronic surveillance.

The principle concern included in the lawsuit was that the images captured by the school “may consist of images of minors and their parents” in “various stages of dress or undress” and other “compromising or embarrassing positions.” The complaint further alleged that the activation of the webcam software was initiated without the consent or knowledge of the parents or the students.

Ruling on Google EBooks Settlement Postponed

Admin2 — Fri, 02 Apr 2010 16:00:09 +0000

The Washington Post recently reported that the U.S. District Court has again delayed a ruling on the case over Google’s move to digitize millions of out-of-copy books. Google, whose name has become synonymous with internet search functionality, sought to create a massive online database that would allow its users access to millions of books, many of which were dubbed “orphan works.”Orphan works are texts where the original author or rights holder cannot be located.

The Google Books product has been controversial since its launch in 2004, as many publishers and authors felt they were not fairly compensated when Google made excerpts of copyrighted works and intellectual property available online. Google recently settled a suit brought by the American Publishers and the Authors Guild of America in which it agreed to pay out 125 million dollars to resolve pending claims. This was also done to create an independent unit that would pay out authors and publishers.

As part of the settlement, authors and publishers were given the chance to opt out of the settlement. The settlement is still pending and has been delayed numerous times. Most recently, Judge Denny Chin announced that there was “too much to digest” after hearing over 500 comments from parties who were for and against the Google Books settlement. Among the concerns most recently voiced is the issue of whether or not Google will gain exclusive rights to the titles that it digitizes and publishes on the Internet. Opponents to the settlement as it currently stands include authors, library groups and competitors such as Amazon (that provides the Kindle E-Books service) and Microsoft (that offers Microsoft Reader, a similar service that sells e-books for use on mobile devices and computers). There has been no definitive date announced for when the decision will be made final.

Jacobsen v. Katzer Comes to a Close

Admin2 — Tue, 30 Mar 2010 10:00:17 +0000

In what TechRepublic calls a “big legal victory for open source,” the courts have finally ruled on Jacobsen v. Katzer. The suit arose after a software developer Robert Jacobsen developed code under the GNU Public License or “GPL” which was subsequently appropriated by Matthew Katzer. Katzer allegedly took the code and used it for his proprietary model train controlling software, KAMIND. In doing so, Katzer also removed all copyright notice and indication of Jacobsen’s original authorship, the former action that was in violation of the Digital Millennium Copyright Act.

GPL is a public license that is often referred to as a “copyleft” in order to discern it from a copyright. The GNU license allows users to freely copy and change a work as long as they continue to offer subsequent users to do so as well. This, however, does not bar developers from charging a fee for open source software; rather, it only prevents them from making software with an open source foundation proprietary, as Katzer did with Jacobsen’s software.

The long drawn out suit, which began in 2004, encompassed copyright claims, patent claims, as well as cybersquatting claims and the aforementioned Digital Millennium Copyright Act claims. The court’s decision to uphold Jacobsen’s claim, award him $100,000 and bar Katzer from reproducing the code set a precedent for open source enforcement. Until this case, there had not been an instance in federal courts when a patent claim was ruled in favor of an open source licenser. This move is expected to give software developers confidence when developing code under the GPL license, as they now know that U.S. law recognizes the intellectually property rights protected under the license.

The discussion regarding open source development is likely to gain increasing relevance with the increasing popularity of open source software, such as Google’s Android and Nokia’s Symbian for mobile devices and Linux, which is used for various devices, most notably as an operating system alternative to Windows or OS X.

Australian Court Rules that Men at Work’s “Down Under” Infringes Copyright Law

Admin2 — Tue, 23 Mar 2010 17:00:17 +0000

A roughly 11-note flute riff has proven the downfall of Men at Work, the group that released the 1980s chart topper, “Down Under.” Music Mix reports that a judge in Sydney, Australia held that the melody played by the band’s flutist throughout the hit single infringes on Kookaburra because it “replicates in material form” a substantial part of a children’s song originally written by Marion Sinclair in 1935. Ms. Sinclair died in 1988 and the publishing company, Larrikin Music, now holds the song’s copyright. Larrikin sued for unpaid royalties and have since won their claim. The suit was brought against the two principle songwriters in the group, as well as Sony BMG Music Entertainment and EMI Songs. The exact amount they will be compensated for is yet to be determined.

Colin Hay, Men At Work’s singer, released a statement in response to the Australian court’s decision stating that Greg Ham, the band member who is responsible for the flute lick, has “unconsciously referenced” the two bars of the children’s song and said that the reference was part of the song’s arrangement, rather than part of its composition. Mr. Hay further stated that his song “lives in my heart” and possibly lives in the hearts of his fans and that he would continue to claim it and would continue to play it, in spite of the ruling.

The story was also reported by the New York Daily News, which noted that Larrikin Music’s attorney stated that they would seek up to 60 percent of the royalties that the band had earned in the past 27 years. The song was immensely popular throughout Australia, the U.S. and Great Britain, with the band earning a Grammy in 1983, which means the final amount collected by Larrikin Music could be well into the millions.

Man Jailed for Two Years and Fined $25,000 for Bootlegging “Dark Knight”

Admin2 — Wed, 17 Mar 2010 21:58:05 +0000

In one of the most notable intellectual property cases, Robert L Henderson was fined $25,000 in restitutions and was sentenced to two years of jail without parole by a federal court in Kansas City. Henderson pleaded guilty to bootlegging (i.e. distributing unauthorized copies) of the 2008 blockbuster “Dark Knight.” According to the Kansas City Star, Henderson entered a theater with a video camera concealed in his winter coat and taped “The Dark Knight” during its opening week in July 2008. Over 1,200 counterfeit DVDs created by Henderson were recovered, after the Motion Picture Association of America launched an investigation. Henderson was accused of copyright infringement.

MTV.com later reported that Mike Robinson, a spokesperson for the Motion Picture Association of America, stated that stealing films via a camcorder (“camming”) was a “serious threat” to the motion picture industry. The motion picture industry employs 2.4 million Americans. Robinson added that the sentence was “appropriate” for a “very serious crime.” Robinson also said that he hoped that the incident would “serve as a warning to would-be movie thieves.”

Two months earlier, Gilberto Sanchez was also accused of making illegal copies of the movie “X-Men Origins: Wolverine” available on the Internet. Sanchez reportedly purchased a bootleg copy of the film from a street peddler and uploaded it to an online file-sharing site. The version of the film was a “work print” (an unfinished copy) of the film. FBI agents eventually tracked Sanchez down and arrested him. Sanchez later told The New York Times that he was being made a “scapegoat” and that he would be “crucified” for his crime.

These recent crackdowns are indicative of a growing concern over enforcement of intellectual property rights in the digital age as well as a strong stance by the industry and the federal government.