IP ADR Blog

Wikimedia assures me this photograph is royalty free.  The pyramid it depicts?  Not so much.

Thanks again to Plagiarism Today's Saturday  Linkroll for this citation to the Christmas 2007 record:

Cairo - In a potential blow to themed resorts from Vegas to Tokyo, Egypt is to pass a law requiring payment of royalties whenever its ancient monuments, from the pyramids to the sphinx, are reproduced.

Zahi Hawass, the charismatic and controversial head of Egypt's Supreme Council of Antiquities, told AFP on Tuesday that the move was necessary to pay for the upkeep of the country's thousands of pharaonic sites.

"The new law will completely prohibit the duplication of historic Egyptian monuments which the Supreme Council of Antiquities considers 100-percent copies," he said.

"If the law is passed then it will be applied in all countries of the world so that we can protect our interests," Hawass said.

Read on here.

Also noted at Overlawyered and Likelihood of Confusion, the latter noting the jurisdictional rule of what-happens-in-Vegas . . . . etc. . . .

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Bloggers with no visual artistic talent -- like me -- are perennially searching for free images to emphasize or draw attention to the central theme of their prose.  As powerful as words can be, they cannot deliver the multi-layered messages contained in a single image  with the same degree of immediacy or power.

So it is with pleasure that we announce our own recent find of the wikimedia commons collection of rights-free visual imagery.

I quote liberally from a recent wikimedia plea for assistance below: 

Where Wikipedia’s trade is in encyclopedia articles and Wikibooks is in textbooks, Wikimedia Commons is devoted to free content photographs, diagrams, illustrations, animations, videos and audio. . . . 

We understand that written literacy is important for allowing citizens to fully participate in society. . . Media literacy is becoming just as vital. . . .

A written tradition is often about connecting people to their history, but increasingly our history is not being recorded in words on a page. Does the name Phan Th? Kim Phúc mean anything to you? Probably not. What if I showed you a black and white photograph of a little girl running down the road naked, screaming and crying? Probably you would recognise that photo, and instantly understand all of the issues it is short-hand for.

I can’t show you that photograph. It dates to 8 June, 1972, and is short-hand for the influence of the media’s reporting of the Vietnam War on the American public’s opinion of and support for that war. From this example it is clear that the media plays an active role in democracy. Free press, free people.

But not free content. That photograph won’t pass into the public domain until at least seventy years after the photographer’s death, and that’s only if the United States government doesn’t extend the term of copyright yet again (you can find the details on Wikisource, but Lawrence Lessig’s book Free Culture is a rather more readable introduction).

Social movement cyclists Critical Mass are fond of the saying, “We’re not blocking traffic — we are the traffic”. There is a similar rallying cry behind citizen journalism — “We are the media”. And while the cyclists’ refrain seems more hopeful than accurate, it’s hard to deny the reality of participatory media today. . . . 

Wikimedia Commons comes in here because it provides the basic building blocks for people who take part in media creation, commentary and criticism — that is, anyone who wants to. If you need images, video or sound that you want to be able to use without fear of being nabbed for infringing someone else’s copyright, then Wikimedia Commons is for you. And because it’s a wiki, you’re invited to give back, too.

Wikimedia Commons also takes existing free content or public domain collections and cannibalises the useful parts. By re-describing and re-cataloguing we essentially make these things that are already free, more accessible. After all, something that’s free but very hard to find is not all that useful, is it? . . .  

Wikimedia Commons is a project that merely collects media files that are in the public domain or are free content. That project doesn’t have any position about what copyright laws should be, it only cares about what currently qualifies for inclusion. That project needs your help for very boring things: to pay for more servers, more bandwidth, and more software developers. Servers and bandwidth are obvious needs, I suppose. We have many 3MB images that are regularly used in dozens of Wikipedias, but there are not too many (if any!) Wikipedia text articles that are 3MB in size. We have to put a low cap of 20MB on uploaded files because we just aren’t confident that we could handle an explosion in larger content (video files, for example, could regularly pass that limit). Media is inherently bandwidth-greedy.

As for the software developers: If you have a browse around Wikimedia Commons you might notice the interface is not that great. It’s not shiny like…well…any Web 2.0 website. It may feel like the website is wearing hand-me-down shoes which don’t quite fit right. That’s true - the website uses the MediaWiki wiki engine designed for an encyclopedia. It still needs some more tinkering to adjust to the basic unit of Wikimedia Commons, which is a file (usually an image), not an article. And while MediaWiki is open source software which means anyone who has enough time and patience can contribute, it’s enough of a complex beast that few do.

So, servers, bandwidth and software developers — that’s why I want to ask you to please dip into your pocket and donate for Wikimedia Commons. But from me personally, I hope a New Year’s resolution may make its way into your mind, to resolve to fight against copyright expansion, enjoy the availability of the commons and give back to it, too.

Happy New Year.

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If you're feeling all pipe-smokish and tweedy this holiday season, take a look at Loyola Law School Professor Jennifer E. Rothman's article in the Virginia Law Review, The Questionable Use of Custom in Intellectual Property (2007) 93 Va. L. Rev. 1899 (title links to .pdf of the article) (h/t to Concurring Opinions for the link)

We here here at the IP ADR Blog place a great deal of emphasis on the benefits of private dispute resolution.  This does not mean, however, that we are uninterested in the development of a theoretically sound IP rule of law, particularly as we transition from a paper-based to screen-based and from a producer-driven to creator-driven knowledge economy. 

Because Professor Rothman's article is destined to influence the continued development of that law in the (somewhat hysterical) IP legal and business climate in which we're now all operating, we provide a holiday sample below (with link to full article above).

First, there is no reason to think that the customary practices that develop in the context of IP transactions will lead to an optimal development or allocation of IP. Industry-developed practices are likely to be suboptimal because they are often generated by efforts to avoid litigation or to preserve relationships, rather than by efforts to develop optimal IP rules or even rules preferred by the involved parties.

Customs that develop in the IP context are also likely to be suboptimal because the IP industries are not particularly close-knit and have fewer repeat transactions between the same parties than other industries in which the use of custom has been favored by scholars.

Moreover, the different economic and political power of parties in IP markets means that the customary practices do not fairly represent the parties but instead skew toward the interests of the most powerful IP owners.

Second, the use of custom in the context of IP generally does not further parties’ expectations of what should be the governing rules, and, even when it does, such expectations should not drive the determination of IP rights because of countervailing public interests at stake that demand a minimum level of access to others’ IP.

Third, . . . autonomy interests that justify a preference for private ordering in other areas of the law point in the opposite direction in IP law. The public goals inherent in affording IP rights cut against deference to private ordering in the IP context.

Even though I conclude that custom should never provide a basis for creating dispositive legal rules in any IP case, custom continues to have some relevance and value as evidence for a variety of inquiries. There are inquiries in IP law, and elsewhere, for which customary practices are relevant and not unduly prejudicial. In such instances, it is appropriate and may be necessary for courts to consider evidence of custom.

I present six main vectors along which a custom should be situated to determine whether the custom is likely to provide meaningful information.

The vectors evaluate the certainty of the custom, the motivation for the custom, the representativeness of the custom, how the custom is applied (both against whom and for what proposition), and the implications of the custom’s adoption.

To have any value, a custom must be certain. To determine whether there is a clear custom, it must be determined that the custom is uniformly recognized and supported, and that there are no contradictory or competing customs. Customary practices or norms that develop with the express purpose of formulating an aspirational set of practices should be given more weight than those that develop simply to avoid litigation or to preserve relationships. Customs that develop with a diverse representation of interests, such as those of owners and users and big and small players in the IP industries, should be given more credence than those that are driven by self-interested subgroups.

For similar reasons, a custom should generally only be applied against parties who participated in its development or, at least, who were adequately represented in the development of that custom. When custom is used simply to determine what is generally done or what parties intended in a contract or quasi contract, custom is at its most useful because it is not standing in for any second-order inquiries.

Even when customary practices have some value under the proposed framework, there should always be an independent analysis of what the adoption of a particular custom would mean for IP owners and users going forward.

Left unchecked, customary practices threaten to swallow up IP law and replace it with industry-led IP regimes that give the public and other creators more limited rights to access and use intellectual property. The approach that I present for evaluating custom in the IP context is vital in the process of recalibrating IP and an important step toward developing a more theoretical approach to evaluating the allocation of IP rights. Such an approach also encourages both users and owners of IP to dissent from customary practices with which they disagree and to expressly identify the motivations behind particular practices and norms.

Looking at custom through the lens of IP also provides powerful evidence for limiting the role of custom in the law more broadly and adds a compelling framework for understanding when preference should be given to top-down government regulation and adjudication over decentralized private rulemaking. To the extent custom can provide relevant data points, the framework that I develop provides solid direction for future theorists and courts.

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($5700 by Andrew Magill)

I just ran across this terrific resource for IP practitioners -- Insurance Coverage for IP Assets. Were I still in practice today, I wouldn't make a move without this great source of IP settlement wisdom. 

Here's the thing about the law of insurance coverage (a sub-specialty of mine for the last ten or so years of my practice) -- you cannot simply read your clients' insurance policies nor simply read the pertinent case law in deciding whether to make -- or more importantly to press -- a claim for coverage. 

There are no easy coverage answers and the difficult questions raised by every coverage dispute vary from state to state.

I live with policy-holder counsel and he can't answer my questions unless I look up the answers and give them to him, at which point he'll tell me why I'm wrong (I usually am) unless I've asked six or seven additional questions.  (thanks honey!)

So add this valuable book to your research library in 2008.  

Publisher's description of contents below; link to publisher's web page featuring the book above. 

Insurance Coverage of Intellectual Property Assets is the first resource to comprehensively analyze the insurance protection issues that must be considered when an intellectual property dispute arises. From determining the scope of coverage under a policy, to tendering of a claim, to seeking remedies when coverage has been denied, this essential guidebook details the interactions among policyholders, insurers and the courts.

You'll find comprehensive and timely analysis of federal and state case law and major commercial insurance policy provisions that address:

• The extent of insurance coverage under the "advertising injury" and "personal injury" provisions
• Language in policies that limits or excludes coverage for intellectual property claims
• Public policy exclusions to coverage for claims of an infringement undertaken with intent to harm
• Interpreting ambiguous language in insurance policies
• Defending a claim under a "reservation of rights" and potential conflicts of interest triggered thereby
• Forum selection and choice of law

And more.

In addition, there's detailed discussion and comparison of the actual language used in most commercial insurance policies and the 1976 and 1986 Insurance Services (ISO) policies.

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(image links to Amazon's page for the Norton Anthology of English Literature)

Low tide here at the IP ADR Blog.  We seem to have entered a time in which America follows Europe and the U.K. by simply shutting operations down between Christmas and the New Year. 

And high time too!  No one gets any work done other than the poor store clerks anyway.  So say!  Have a little patience with them this holiday season and carry a few lagniappes in your pocket to bestow true holiday cheer upon the hard working temps, two of whom were completely flustered yesterday when their cash registers broke down over at the Grove shopping center (yeah, that's me -- bad cash register karma).

Anyone Read Beowulf Lately

But there is something relevant to intellectual property this morning -- a good article over at Concurring Opinions by Frank Pasquale, Humanities Hobbled by Copyright Law.  "While scientists are pioneering exciting new modes of cooperation," writes Pasquale,

 humanities scholars are increasingly tripped up by an archaic copyright system. Great schools of the recent past may be doomed to an ownership pattern fractionated enough to frustrate even the most persistent assembler.

May I suggest that the problem described in much greater detail in Pasquale's post be resolved neither by the compromised process of legislation nor by the adversarial mode of dispute resolution, but by a grass-roots coalition of publishers and academics working toward a solution that satisfies the greatest number of the true needs of all stakeholders.

Collaboration.  The by-word of 2008.

Cheers!

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UPDATE:  See Likelihood of Confusion (the Nutty Ninth) citing Seattle Trademark Lawyer on this opinion.

(image links to washington post article on combating the importation of  Chinese counterfeit goods)

In K&N Engineering, Inc. v Bulat, the Ninth Circuit ruled yesterday that "an award of statutory damages for trademark counterfeiting under 15 U.S.C. § 1117(c) precludes an award of attorney’s fees under 15 U.S.C. § 1117(b)." 

Why is this important to remember when attempting to settle your counterfeiting action? 

Because the more items of value you have to bargain over (particularly attorneys fees which only get worse over time) the more likely you are to maximize your bargaining position.

As Professor Leigh Thompson of the Kellogg School of Management at Northwestern University has instructed us:

One reason negotiations fail is because negotiators haggle over a single issue, such as price.  By definition, if negotiations contain only one issue (e.g., price), they are purely distributive (i.e., fixed pie).  Skilled negotiators are adept at expanding the set of negotiable issues.

Adding issues, unbundling issues, and creating new issues can transform a single-issue, fixed-pie negotiation into an integrative, multi-issue negotiation with win-win potential.

Integrative agreements require at least two issues and, in the case of negotiation issues (not parties) the more the merrier.

Why is this so?

As Roger Fisher, of Getting to Yes fame, notes, often the key to getting past impasse is understanding and then asking questions to ascertain what underlying needs that are not monetary your negotiation partner wants.  He tells this story to explain:

[A corporate CEO wanted to sell a building because he] was retiring and wanted $2 million, which he considered a fair price.  He had a buyer, but the buyer wouldn't pay that price.  I asked the seller, 'What's the worst thing about selling this building?'  And he said, 'All of my papers for 25 years are mixed up in my corner office.  When I sell the building, I can't throw everything away.  I've got to go through that stuff.  That's the nightmare I have.

Thompson continues:

Then Fisher asked the buyer why he wanted the building.  The buyer explained he hoped to sell it for hoteling.  This knowledge gave Fisher the idea of suggesting that the seller offer the buyer a lease with an option to buy with one contingency:  that the president's name be on the corner office for three years.  The buyer agreed.  In this example, Fisher notes that the key underlying needs are not about money, but more about convenience. 

Thompson, The Heart and Mind of the Negotiator, 3rd Ed. at 80-81.

This example is as much about asking diagnostic questions as it is about having multiple items for which to bargain. 

They key, of course, is to consider the probability in every case that there are undisclosed needs, fears and desires that would assist the parties in achieving a resolution that is of greater benefit to all parties than what appears to be the sum of the parts.

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(image from toothpaste for dinner)

We're sorry we missed this report from MacUser News when it appeared under the headline UPDATED: Music boss: we were wrong to go to war with consumers in November, but thanks to Plagiarism Today's Saturday Linkroll which led us to these items in Mashable (The RIAA Tries Truthiness and EMI to Cut RIAA Funding; Death of RIAA Near?) we're able to report that Warners Music Chief Ed Bronfman is singing the Innovate, Don't Litigate song. 

Speaking at the GSMA Mobile Asia Congress in Macau, Edgar Bronfman told mobile operators that they must not make the same mistake that the music industry made.

"We used to fool ourselves,' he said. "We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find and as a result of course, consumers won."

Mobile operators risk the same, he said. Fewer than 10% of mobile owners buy music on their handset, the vast majority of which is ringtones.

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In Fans:  Friend or Foe, the IP lawyers at Sheppard Mullin, citing this BBC article on a fan-made video-game Warhammer movie, throw this question out to the blawgosphere: 

At what point does a work of fan fiction pose a threat to the intellectual property rights of the owner?

The Sheppard Mullin post -- covering gaming-fan-generated content and German law on le droit moral -- is meaty and thought-provoking, raising the type of questions addressed by the Lessig video posted here yesterday.

Check it out!  And if you're inclined to answer the question in your own blog, please do let us know!

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Thanks again to Plagiarism Today for yet another great Lawrence Lessig video.  

Forgive us our fandom for a law school professor, but this guy is the smartest, most forward-thinking, creative individual thinking and talking about art, copyright, culture and the internet today. 

Some of this is pulled from the earlier presentation we posted but this is much more thorough and all-encompassing. 

Check it out.

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O.K., we admit it.  We were a little bummed that no ADR Blawgs made the ABA Journals' Blawg 100 List.  But, as always, our spirits were lifted by our fellow bloggers who are, after all, our community, our posse, our homes, our peeps.

So thanks to Tom Mighell over at Inter Alia for making the IP ADR Blog Blawg of the Day yesterday. 

And while we're giving thanks, a big IP ADR bear hug to the folks at Mediate.com who featured Michael Young's post on . . . . yes . . . copyrighting flatulence . . . . this week. 

That's the first appearance of our blog in the Featured Blogs section of the Mediate.com site and we're happy to have finally made it there.

Finally, we're happy to announce that IP ADR Blogger Victoria Pynchon's Settle It Now Negotiation Blog has become part of the Forbes.com Business and Financial Blog Network.

While you're clicking on links, you might consider subscribing to Tom Mighell's great Internet Legal Research Weekly here!

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Sometimes you've got to wonder whether anyone really cares about intellectual property at all. Or class and culture for that matter.

Take the case of the Pull-My-Finger Fred doll versus Fartman, the epic battle of the farting plush dolls. Now I'm not that far removed from teaching my boys about the incredible magical powers of the pulled finger not to understand how a Pull-My-Finger Fred doll could enjoy a certain amount of commercial success. (In fact I have a brother who probably rushed out to buy the first one.)

But is a "white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white tank top and blue pants" who farts "when one squeezes [his] extended finger on his right hand," and "makes somewhat crude, somewhat funny statements about the bodily noises he emits, such as 'Did somebody step on a duck?' or 'Silent but deadly'" really worthy of emulation?

Our thanks for this bit of IP whimsy to Judge Diane P. Wood of the Seventh Circuit Court of Appeals for the fine description in her March 2007 opinion.) 

Apparently Novelty Inc. thought so. It created Fartman, described by the Court as (and this may sound familiar to you):

a white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white tank top and blue pants. Fartman (as his name suggests) also farts when one squeezes his extended finger; he too cracks jokes about the bodily function. Two of Fartman's seven jokes are the same as two of the 10 spoken by Fred.

Does the world really need two white, middle-aged, overweight, balding, flatulating, wise-cracking male plush dolls? But that's not the point.

The point is, what was Novelty Inc. thinking? Why blatantly infringe on someone else's copyright? If you really must have a gas passing plush doll to fill out your product line, why not create one with a full head of blond hair, or standing with a green shirt, or ... a woman! (You women know you do it. Don't deny it. I think Judge Diane Wood might have been feigning innocence when she wrote:

Somewhat to our surprise, it turns out that there is a niche market for farting dolls, and it is quite lucrative.

O.k., that's not the point either. Nor is it to critique the legal issues raised by this case, including the ever fascinating and difficult idea/expression distinction. That has been done admirably and more timely by others, including William Patry in his post Fartman Appeal Fizzles.

Rather, my point is this:

Dispute resolution in the IP field comes in all shapes and sizes.

One of the best means of dispute resolution is to avoid the dispute in the first place.

Call it pre-dispute resolution.

In this case, Novelty Inc., is now liable for nearly a million dollars in infringement damages, more than half of which were the plaintiff's attorneys fees.  Clearly, Novelty could have used a little pre-dispute IP counseling.   With professional guidance, it could have avoided a case that stunk from the start. (Come on, you knew it was coming eventually.)

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(photo: Long Conversation by renatela)

Thanks for the head's up from Ron Coleman at Likelihood of Confusion about the new Securing Innovation Blog from IP.com.

Here's what S.I. has to say about its "mission" -- one with that distinctive Kevin O'Keefe LexBlog flavor that we intuited before we saw his name in the Why We Believe In Business Blogs post (excerpts below)  

We hope you'll read our corporate blog, Securing Innovation, and join with us discussing patents, trademarks, trade secrets, law and policy, and the latest and greatest tools to strengthen your intellectual property assets and manage your IP portfolios more effectively.

What Is IP.com and why read our blog?

In our little corner of the online world, there's a lot happening with patents, trademarks, and trade secrets, and a lot of relevant stuff is being said on interesting blogs by people who really know what they're talking about. So we're joining the conversation, and blogging about how innovation is managed by corporations with a vested interest in their Intellectual Property.

Find the conversation. Join it. Contribute to it. "Conversing is how we learn. It's how we network. It's how we grow as professionals," says Kevin O'Keefe, CEO of LexBlog, whose team of experts guided us in the development of our corporate blog, "Blogging is a conversation. Not only do you learn and grow your reputation by joining in, you will not be conspicuous by your absence." 

Why We Believe in Business Blogs

The IP ADR Blog and IP ADR Services welcomes IP.com and Securing Innovation to the IP Blawgosphere -- it's collaborative, reciprocal and abundant.  It doesn't get much better than that.   

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As you can tell from our IP ADR Dictionary here, we're word and definition freaks at the IP ADR Blog.

So we're pleased to pass along IP ADR Blogger Les Weinstein's recent note to take a look at the latest Intellectual Property Dictionary.

This book brings together articles by leading international scholars from diverse disciplinary perspectives who focus on the legal, social and cultural dimensions of intellectual properties - including patents, copyrights, trademarks, trade secrets and rights of publicity.

These articles employ a creatively eclectic approach to the study of intellectual property law and policy viewed through the lenses of traditional doctrinal analysis, historical perspectives, critical cultural study, and empirical examinations of intellectual property in action.

The volume also directs critical attention to the significance of intellectual property in contemporary processes of globalization and political economy.

The author and board of editors on this one form a pretty impressive group.

Author Rachel Gader-Shafran has a BA in Political Science from UCSB, an MA in applied linguistics from UCLA and a JD from American University, Washington College of Law, cum laude. The author has taught as an Adjunct Professor at American University, Washington College of Law and has published The Intellectual Property Law Dictionary with Law Journal Press and The International Students' Survival Guide to Law School in the United States . . .  continue here.

Board of Editors

Christine Haight Farley is an Associate Professor of Law at American University, Washington College of Law. Professor Farley teaches courses in Intellectual Property Law, U.S. Trademark Law, International and Comparative Trademark Law, and Law and the Visual Arts . . . continue here. 

Peter Jaszi teaches at the Washington College of Law of American University in Washington, D.C., where he also directs the Glushko-Samuelson Intellectual Property Law Clinic. He specializes in domestic and international copyright law. Prof. Jaszi is an experienced copyright litigator and a frequent speaker to professional audiences in the United States and abroad. . . continue here.

Leonard Klein is Legal Research Librarian and Intellectual Property Subject Specialist at the Jacob Burns Law Library of George Washington University Law School. In addition to providing research support to faculty, students, alumni and visiting scholars, he selects new resources for the Library's extensive intellectual property collection. . . . continue here. 

Eliav Korakh is a partner at Borochov, Korakh, Eliezri & Co. He specializes in Patent Law and deals with the USPTO and international agencies in his practice. He has particular experience in the areas of computer hardware and software, telecommunications, optics, applied mathematics and physics, electronics and medical devices, and business and commercial Law. . . . continue here.

Here's the link to purchase the book if you'd like to add a hard copy IP Dictionary to your bookshelf.

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. . AND THEN SETTLE YOUR COPYRIGHT CASE.   

(right, IP ADR attorney, mediator and blogger Michael D. Young of Weston Benshoof and Judicate West; case link courtesy of Thelen Reid)

$27 million will buy you a whole lot of cake. And you can eat it too. That’s one of the lessons from the Tennessee Court’s unprecedented sanctions award against an apparent copyright infringer who just refused to stop copying. 

In MGE UPS Systems v. Titan Specialized Services  (OPINION HERE), the copyright owner not only obtained a sanctions order worth $27 million against one of its primary competitors (and apparent copyright infringer), but was still entitled to pursue its claim for copyright damages. 

How is that for protecting your intellectual property while also setting the stage for a pretty advantageous settlement negotiation?

Using the lingo of ADR/negotiations, MGE UPS Systems showed how a copyright owner could effectively utilize the litigation process to change the parties’ respective leverage, and then set itself up for the perfect negotiated outcome.

Here’s the short set-up: MGE UPS Systems, Inc. sells, and then services, “Uninterruptible Power Supply” equipment, equiqment  systems customers (such as hospitals) install to ensure a constant supply of power in the event of an outage. 

Because this equipment must be regularly serviced and maintained, not surprisingly, there are a number of competitors who provide such services to UPS users -- and who compete head to head with MGE for that business.

Things were pretty competitive…until MGE built a better mousetrap. It developed new software that was so good it allowed UPS to service its equipment 2-4 times faster than its competitors, and with greater accuracy and efficiency. The software was, of course, proprietary and copyrighted. The competitors were starting to feel the pinch.

Beware the Mobile Employee

One competitor apparently pinched back. If you’ve worked in any technology-based business, you know how prevalent employee mobility is – and how easy it is to download secrets onto a simple pen drive that fits in your pocket.  According to complaint's allegations, defendant JTP solicited one of MGE’s former employees who just happened to have a pirated copy of the MGE proprietary software. JTP obtained the software, distributed it to its service personnel, and began competing against MGE with MGE’s own copyrighted product.

Why JTP thought it could get away with this thievery is never explained.  Why it believed it could then go out in the market place and start miraculously servicing UPS equipment in 1/6^th the time without raising suspicion is also never explained. 

What needs no explanation is what happened next. As soon as MGE learned of the theft and infringing use of its software, it filed suit. 

The Leverage of Time

With the suit filed, is it time to call in fellow blogger Vickie Pynchon to mediate the dispute? JTP probably would have loved this. Settlement takes time, and every day that passed setting up and conducting the mediation would have been another day JTP could have been in the field utilizing MGE’s own copyrighted software to steal business from MGE. JTP would have been incentivized to drag the process out for as long as it could. 

But for MGE, this would have been a mistake. The leverage of time was working against it. With MGE bleeding every day, what it needed was litigation triage. So MGE sought to staunch the blood flow by applying for – and obtaining – an emergency restraining order against JTP prohibiting it from using the MGE software at all for any purpose whatsoever. 

Now who was in a hurry to settle? Not MGE, certainly. The leverage had flipped. Back in sole control of its proprietary software, it could now regain control of the Service market as well. It was JTP who should have been in a hurry to settle before it became locked out of the market altogether. Maybe it could cut a licensing deal?

Time to Call the Mediator

This is the time JTP should have called Vickie to seek out a mediated solution. But it didn’t. Instead, it took a seriously wrong turn. According to the opinion, rather than comply with the Court order, JTP ignored the thing altogether and continued utilizing the copyrighted software in competition with MGE. 

The Leverage of Sanctions

When MGE learned about JTP's contumacious conduct, it returned to court and sought sanctions. And what sanctions they were.  After a two day evidentiary hearing, the court, noting that a third of JTP’s income was based on its service of MGE equipment, awarded MGE “a monetary sanction of thirty (30%) of JTP's gross revenues from July 21, 2004 to date.” 

Thirty percent!  $27 million! 

(The court also ordered an inspection of JTP’s computers – at JTP’s expense of course – and awarded MGE its attorney’s fees.) 

And this doesn’t include MGE’s infringement damages!

An entire blog could be dedicated to litigation sanctions.  (I looked, but couldn’t find one -- readers should feel free to start one.)

Unless JTP had a rabbit up its sleeve, this would have been a good time to call Vickie to get this one settled or at least to read the chapter on negotiating from a position of weakness in Malhotra's and Bazerman's Negotiation Genuis.   

$27 million and damages? 

That’s what I call having one’s cake and eating it too. 

(Though I’m a pie guy myself.)

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(photo:  Entering Hyperspace by Éole)

Let's face it.  Unless you're a P.D., D.A., a Federal Prosecutor or a Federal Defense Attorney, the only true alternative dispute resolution mechanism is trial.

The good news is that some federal district courts are adopting new local patent rules that

provide predictable and uniform treatment for intellectual property litigants and streamline the process by which a patent case is litigated, shortening the time to trial or settlement and thereby reducing costs for all parties involved.

Where?  In the Southern District of California for one, say Heller Ehrman attorneys David Kleinfeld and John Benassi in their article New local rules pave way to speedier patent trials.  Those rules also establish what we commonly think of as an ADR process -- an Early Neutral Evaluation option as described in the linked article in full and as excerpted below.

[T]he new rules set up a schedule that will bring the parties to the all-important claim construction (or Markman) hearing approximately nine months after the complaint is filed.

Having the Markman hearing as early as practically possible is crucial for litigants seeking a timely resolution because the claim construction order issued by the court after the hearing generally has a profound impact on the rest of the case.

The parties will sometimes be inclined to settle once they have seen how the court construes the patent claims at issue. If not, the Markman ruling provides focus for the remaining discovery, dispositive motion practice and trial preparation.

Indeed, it is largely because of the early-scheduled Markman hearing that Southern District judges can now set trial dates for 18 months after complaints are filed. . . .

The new patent local rules also incorporate an existing feature unique to Southern District litigation practice: the Early Neutral Evaluation (ENE). As local practitioners know, and as out-of-town litigants will learn if they choose to avail themselves of the southern district, the ENE provides the parties with a real opportunity to settle the case before spending substantial time and money.

Experienced magistrate judges with the power to compel principals to appear in chambers will try to help the parties reach a deal and will usually remind both sides that it is often wise to settle rather than roll the dice on a jury trial.

If you're practicing patent litigation in California, the full article here is well worth a careful read. 

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Join Stanford Professor Larry Lessig's Creative Commons 50,000 Friends Drive!

You can join the Creative Commons Facebook "Cause" here.  Text below from the Creative Commons Cause page:

The Mission:  to build a layer of reasonable, flexible copyright in the face of increasingly restrictive default rules

Description: Too often the debate over creative control tends to the extremes. At one pole is a vision of total control — a world in which every last use of a work is regulated and in which "all rights reserved" (and then some) is the norm.

At the other end is a vision of anarchy — a world in which creators enjoy a wide range of freedom but are left vulnerable to exploitation. Balance, compromise, and moderation — once the driving forces of a copyright system that valued innovation and protection equally — have become endangered species.

Creative Commons is working to revive them. We use private rights to create public goods: creative works set free for certain uses. Like the free software and open-source movements, our ends are cooperative and community-minded, but our means are voluntary and libertarian. We work to offer creators a best-of-both-worlds way to protect their works while encouraging certain uses of them — to declare "some rights reserved."

Positions: Copyright can be exercised in such a way that it promotes collaborative culture while still protecting the author's legal rights.

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Here's the thing about bullying.  When you do it in public, champions will arrive on the scene to do battle.  According to the recent ABA article Oregon ‘Ground Zero’ in RIAA Battle Against File-Sharing,

in filings this week, Attorney General Hardy Myers' office said the Recording Industry Association of America's litigation tactics may violate his state's data-mining laws . . . [and] called for an investigation of the recording industry's tactics.

In response to the RIAA's muted characterization of the AG's attempts to protect its citizens as  "misguided," New York lawyer, Ray Beckerman (The Recording Industry vs. the People) . . . says that the "the Oregon AG's move to question the RIAA's tactics is long overdue."

 "The RIAA has been bringing fake copyright infringement lawsuits, the sole purpose of which is to get the names and addresses of John Does. . . . The strategy is then to drop the case and pressure individuals to settle, he added.

For those who missed our first post on this issue here, we once again provide an explanation of bullying from the social scientists.  

Bullying, they tell us, is the repeated and deliberate abuse of power by one person or group over another person or group.

The social context in which bullies flourish?  Relatively stable social groups with a clear hierarchy and low supervision.

Why?  Because hierarchy – a system that ranks people one above the other -- makes low-status individuals visible, easy to get at and less likely to receive protection by their peers. 

When you bully a State's citizens in full view of that State's arm of justice, however, you can't expect that you -- the sixth grade bully -- can continue to shake down the third graders for their lunch money.

Kudos to the State of Oregon for riding to the rescue!

For college students targeted by the RIAA -- and those who might be -- attorney Beckerman provides his practical and legal advice here.

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L.A. Times reporter Dawn Chmielewski wins the tech-legal lede of the day contest by reporting that

the U.S. 9th Circuit Court of Appeals on Monday reaffirmed its earlier support for the socially redeeming value of searching the Internet for nudie pictures.

The San Francisco court, in reviewing a case it initially considered in May, reiterated its finding that Google could display tiny versions of photographs by Perfect 10 Inc., a Beverly Hills-based adult publisher, in search results, even when those images were copyrighted.

That opinion affirming in part, reversing in part, and remanding to the District court is here.

And that report, by the Los Angeles Times, is almost right. 

The Ninth Circuit instructed the District Court to make further factual inquiries to determine whether Google and Amazon are contributorily liable for infringing uses by other websites.  As the Court held:

Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10's copyrighted works,and failed to take such steps.

The best analysis of the opinion on the web right now is Eric Goldman's Technology and Marketing Law Blog post Perfect 10 v. Amazon Opinion Amendment--Ninth Circuit Does 180 on Fair Use Burden for Preliminary Injunction here.

Quotes that form the meat of the opinion below:    

HOLDING ON DIRECT INFRINGEMENT (GOOGLE)

In this case, Google has put Perfect 10’s thumbnail images . . . to a use fundamentally different than the use intended by Perfect 10. In doing so, Google has provided a significant benefit to the public. Weighing this significant transformative use against the unproven use of Google’s thumbnails for cell phone downloads, and considering the other fair use factors, all in light of the purpose of copyright, we conclude that Google’s use of Perfect 10’s thumbnails is a fair use. . . . . We conclude that Google is likely to succeed in proving its fair use defense and, accordingly, we vacate the preliminary injunction regarding Google’s use of thumbnail images.

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UPDATE:  For a discussion of the reasons why this video so powerful presents the WGA's case, click here.

Thanks to the National Law Journal's Los Angeles Legal Pad for posting this short video "Why We Strike."

A post explaining the reason the reasons given here feel pretty darn persuasive next.

And, by the way, we're really happy to see the L.A. Legal Pad becoming much more substantive a legal news source than it originally was. 

We're pretty certain we have Jason Siegel to thank for this improvement in content and thank him we do!

We're looking forward to watching it grow!

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