Update: Major Media Management Company Signs on to Voluntary Effort to Deter Online Copyright Piracy

copyrightwarningIn a February 17, 2015 post, we applauded a new voluntary program developed by advertising trade associations, the Brand Integrity Program Against Piracy. The program’s goal is to deter the placement of advertisements for legitimate products on websites that help disseminate illegally-copied entertainment content or knockoffs of trademarked products.

This voluntary property-rights protection effort received a considerable boost last week when GroupM, the investment management arm of global media and advertising services giant WPP, formally endorsed the Brand Integrity Program. GroupM’s digital marketing and media partners handle over 32% of the world’s media billings.

As explained in our February post, a trade association-created entity, the Trustworthy Accounting Group (TAG), initiated a program to certify companies that assist advertisers and ad agencies to avoid ad placement on cyberlockers and other undesirable websites. Third-party accounting entities such as Ernst & Young will assess those wishing to be certified. If these companies meet certain effectiveness criteria, TAG will validate them as “Digital Advertising Assurance Providers” (DAAPs).

GroupM is requiring that its partners either be certified as DAAPs or contract with companies that have earned that certification. The joint GroupM-TAG press release explained that TAG will announce the first validated DAAPs before the end of 2015, and that GroupM’s partners must be validated as or hire a DAAP by the end of March 2016.

Online copyright and trademark infringement is a multi-billion-dollar problem for economically critical U.S. businesses. The pursuit of rogue businesses through civil or criminal law enforcement has expanded in recent years, but pirate sites and their creators are quite elusive and the legal process is slow. For instance, it’s been four years since New Zealand officials arrested Megaupload founder Kim Dotcomm, and a decision has yet to be made on his extradition to the U.S.

Voluntary efforts to undermine the revenue stream for cyberlockers and other trafficking sites, therefore, are a critically important weapon against online piracy. TAG’s enlistment of GroupM and its partners is a positive development, one that could accelerate the recruitment of more partners for the Brand Integrity Program Against Piracy.

European Court of Justice Ruling Adds to Challenges that U.S. Standard-Essential Patent Holders Face on Enforcement

BartkowskiGuest Commentary

by Paul M. Bartkowski, a partner with Adduci, Mastriani & Schaumberg, LLP, with Mike Doman, an associate with the firm.

On July 16, 2015, the European Court of Justice (“ECJ”), in Huawei v. ZTE, clarified the circumstances under which an owner of a standard essential patent (SEP) that is required to license the SEP on fair, reasonable, and non-discriminatory terms (FRAND) can bring a claim for injunctive relief against an alleged infringer. The ruling was highly anticipated because the nature of a SEP holder’s right to enjoin alleged infringers has been a recent topic of debate in both the U.S. and in Europe. A review of the decision reveals that European and American courts analyze FRAND-related issues quite differently. Continue reading

Federal Circuit Reaffirms International Trade Commission’s Authority Over Induced Patent Infringement

Kaminski_Jeffri_LRFeatured Expert Contributor – Intellectual Property (Patents)

Jeffri A. Kaminski, Venable LLP

The U.S. Court of Appeals for the Federal Circuit sitting en banc has reaffirmed the International Trade Commission’s (ITC) longstanding authority for remedying inducement infringement. The ITC authority was called into question, and in fact overruled, by an earlier panel decision in the same case. The court sitting en banc in Suprema v. ITC voted 6-4 to overturn the panel’s decision limiting the circumstances under which the ITC could issue an exclusion order for induced infringement. The en banc decision closes a loophole for induced infringement and provides certainty on the issue.

By way of background, Suprema is company that manufactures fingerprint scanners in Korea. The fingerprint scanners are imported and sold to Mentalix in the U.S. Mentalix writes custom software for controlling the scanners. It then bundles its software with the scanners and resells the bundled product within the U.S. Continue reading

A Case with Teeth?: Federal Circuit to Review International Trade Commission’s Jurisdiction over Digital “Articles”

ITCNext Tuesday, August 11, the U.S. Court of Appeals for the Federal Circuit will hear oral argument in ClearCorrect Operating, LLC v. International Trade Commission, a case that nominally involves a cease-and-desist order the International Trade Commission (ITC) imposed on a data file that contained a digital model of crooked teeth. As numerous amici in the case assert, however, the court’s ultimate decision could have significance well beyond digital teeth images; it could establish standards for the Commission’s jurisdiction over international trade in digitalized goods.

The case followed a routine path from ITC to the Federal Circuit. Align Technology complained to ITC that ClearCorrect was importing goods into the United States that infringed Align’s patents. Both companies create patient-specific “aligners” to correct crooked teeth. ClearCorrect’s facility in Texas would download data of a model created in Pakistan from a foreign-based server, and then use that data to create the aligner. Align alleged that the data “imported” from the foreign server constituted an “article,” under 19 U.S.C. § 1337, over which ITC had jurisdiction. Continue reading

Supreme Court Observations: Kimble v. Marvel Entertainment, LLC

Kaminski_Jeffri_LRFeatured Expert Contributor – Intellectual Property (Patents)

Jeffri A. Kaminski, Venable LLP

The U.S. Supreme Court recently decided a closely watched case concerning contract rights and patent royalties. In Kimble v. Marvel Entertainment, LLC the Court upheld its long standing precedent and determined that parties cannot agree to patent royalty payments that extend beyond the expiration of the patent.

The case originated when Kimble and Marvel agreed to a patent license for a toy glove that Kimble had patented. The licensing agreement called for a lump sum payment and running royalties for a license to the patent as part of a settlement of ongoing litigation. The agreement did not set an end date for the royalty payments. In making its decision the Court upheld its ruling in Brulotte v. Thys Co., 379 U.S. 29 (1964), holding that licenses requiring payment of patent royalties after patent expiration are “unlawful per se.” Brulotte has been the subject of criticism in the 50 years since it was decided, but the Court determined that was not enough of a reason to overturn its longstanding precedent. Continue reading

Copyright Act Submission Hold: Professional Wrestler’s Publicity and Privacy Claims Preempted

copyrightGuest Commentary

by Sara Thornton, a 2015 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.

What do copyright law, a WWE professional wrestler, and ESPN have in common? They were all involved in an appeal before the U.S. Court of Appeals for the Eighth Circuit in Ray v. ESPN, Inc., decided on April 22, 2015. Steve “Wild Thing” Ray sued ESPN under Missouri law for broadcasting WWE rerun matches featuring Ray in the early 1990s.

The specific claims were for (1) invasion of privacy, (2) misappropriation of name, (3) infringement of the right of publicity, and (4) interference with prospective economic advantage. ESPN moved to dismiss the suit, asserting that federal copyright law preempted the state-law claims. The district court construed Ray’s first two claims as being identical under Missouri law, so analyzed them as one. It also assumed that since Ray did not challenge ESPN’s argument that copyright law preempted his first and fourth claims, Ray had waived those claims. The court concluded that the Copyright Act preempted Ray’s remaining misappropriation and right of publicity claims. Continue reading

FTC’s Actions on In-App Purchases Reflect Chilling Move Toward “Mother-May-I” Paternalism

amazonFederal regulatory agencies routinely act as table-setters for the plaintiffs’ bar. Class-action lawsuits can require targets of federal enforcement actions, even after those actions end in settlement, to defend against the same allegations in court. A federal judge’s April 3, 2015 dismissal of a class action on the ground that the company had already entered into a settlement with the Federal Trade Commission (FTC), therefore, was a commendable outcome. The underlying FTC action that inspired the suit, however—an industry-wide investigation into companies’ in-app purchase procedures—is far less welcome. The Commission’s investigation is yet another example of government’s steady drift away from respecting permissionless innovation and toward “mother-may-I” paternalism.

FTC’s In-App Purchase Inquest. FTC initiated an investigation in 2011 of various companies’ mobile-app sales practices. The Commission had received complaints from parents that their children were making “unauthorized” purchases on mobile app stores. On January 15, 2014, Apple agreed to settle with FTC over charges that its in-app purchase process constituted an unfair business practice under § 5 of the FTC Act. On September 4, 2014, Google entered into a similar settlement. Both app sellers agreed to provide customers with refunds and alter their app sales practices.

In addition to Google and Apple, FTC also accused Amazon of unfair business practices for failing to prevent “unauthorized” in-app purchases.  Amazon, however, refused to settle the charges. The Commission filed suit on July 10, 2014 in the U.S. District Court for the Western District of Washington. On December 1, 2014, Judge John C. Coughenour denied Amazon’s motion to dismiss. Continue reading