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Technologist Cynthia Hsu

Back in November, we wrote about how the lawyers behind US Copyright Group, Dunlap, Grubb & Weaver, were being sued for extortion, conspiracy and fraud. While we doubted the lawsuit would get all that far, it did seem to have a slightly stronger legal basis than similar lawsuits in the past, due mainly to the fact that the producers of Uwe Boll’s Far Cry screwed up with the registration of the copyright, meaning that many of those sued could not be hit with statutory damages — and yet DGW falsely claimed they could. While defenders of these pre-settlement “pay up or we’ll sue” campaigns like to claim that it’s not extortion if the party demanding the cash has a legitimate legal claim, it’s a lot harder to make that case when they don’t really have a legitimate legal claim, but simply say they do. That sounds a lot closer to extortion.

Ars Technica notes that DGW has filed a scathing response (though, oddly, Ars Technica does not provide the actual filing). Apparently, there are two key arguments made by DGW: First, that the guy suing, Dmitriy Shirokov, has no right to sue DGW, because they’re just the lawyers “simply doing their job,” and you can’t sue for that:

“Although an attorney may be accused of defrauding opposing parties, knowingly committing discovery abuses, lying to the court, or purposely and maliciously defaming another individual, if it takes place during the course of litigation, the conduct simply is not actionable,”

That’s quite a claim, in large part because it’s misleading. DGW is playing a little game of misdirection, and assuming everyone else is stupid (a dangerous game for lawyers to play). The main problem is that the actions that DGW is being sued over here are not actually “during the course of litigation.” The complaint is about the “pay up” threat letter, which is not directly a part of the litigation, but an attempt to avert litigation. To claim that demanding cash based on a factually incorrect legal claim is immune from a legal complaint seems like a stretch. If DGW’s legal theories are correct here, it would mean that a lawfirm could resort to outright, blatant extortion, just so long as it somehow connected it to the threat of litigation. That’s a plainly ridiculous outcome that I find hard to believe a court would buy.

Separately, DGW says that no “harm” has come to Shirokov since he hasn’t actually settled. That, again, seems like a questionable tactic. If true, the only way that someone illegally or unfairly threatened could sue is if they first give in to the threat. It seems that just the threat itself, if it truly was made maliciously with false information for the purpose of getting people to pay up, should constitute clear harm in itself.

Of course, not all DGW’s claims seem that crazy. On the question of racketeering and other criminal complaints, DGW points out that individuals can’t bring criminal complaints, only the government can. This point goes in DGW’s favor, and I’m a bit surprised that Shirokov’s lawyers focused on criminal statutes in their complaint. However, the complaint covers plenty of areas that aren’t criminal in nature, and there’s no reason why the case shouldn’t move forward on those issues.

Finally, DGW, in what appears to be becoming standard practice for the firm, is demanding sanctions against Shirokov and his lawyer for filing the lawsuit in the first place. Talk about obnoxious. DGW, in this filing, appear to be claiming both that they can effectively do whatever the hell they want to threaten someone if he doesn’t pay up (so long as they can claim a loose association with ongoing litigation) — and that anyone who then claims that this amounts to a form of fraud or extortion should be punished. In other words, it seems that DGW believes it can act beyond the law in the course of litigation, and anyone who sues them over it should be sanctioned.

Hopefully, a court sets DGW straight on all of that. I’m still not convinced this case will get very far. I’d be surprised if courts, while sympathetic to those charged in such “settle or we sue” lawsuits, went to the other extreme and claimed that the efforts behind them directly broke the law. I’d be thrilled if I’m proven wrong on this, but it just seems unlikely.

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Techdirt Mike Masnick

Don’t get me wrong.  I don’t mind the RIAA.  As a technology and internet lawyer who makes my living in and out of court trying to protect the intellectual property rights of my clients, I generally support the RIAA’s efforts to keep people from stealing music and infringing the copyrights of others—although the organization can get a bit too overzealous at times.  I’m starting to wonder, however, if perhaps the RIAA’s overzealousness is starting to cross the line into outright delusion, stupidity, or both.  They certainly keep their lawyers busy though.

Now the RIAA is making veiled legal threats against ICANN over the introduction of a “.music” domain name.  The RIAA’s deputy general counsel, Victoria Sheckler, informed ICANN that such a gTLD “will be used to enable wide scale copyright and trademark infringement.”  Actually, “informed” is too nice a word given the rest of her letter: 

We strongly urge you to take these concerns seriously….We prefer a practical a practical solution to these issues, and hope to avoid the need to escalate the issue further.

As you’re probably aware, “escalate” is legalese for “sue your ass.”  But come again?  How does a .music domain name ”enable” infringement?  As I recall, the RIAA has sued an awful lot of people over the years who have downloaded music from sites with .com and numerous other extensions.  So how does a .music gTLD change that in any way? 

If anything, a .music domain name might help consolidate all of the infringers in one place, kind of like a canyon with the snipers located above, and thereby allow the RIAA’s lawyers to pick them off as they see fit.  Of course, outright infringers would likely avoid using such an obvious domain name anyway and stick to the names they’ve been using for—oh, I don’t know—maybe the last decade or so before a .music name was ever contemplated.  (But then again, as an attorney I’ve learned never to underestimate the stupidity or chutzpah of people.)  And of course, the RIAA seems to forget that there are a ton of amateur musicians and bands out there who have no problem with people downloading their music for free and would readily take the opportunity to register a .music domain name.

In terms of potential trademark infringement, I have no doubt that many cybersquatters would try to register the .music names of famous bands and musicians.  But most won’t get very far given the ICANN domain name dispute resolution policy.  Or the even more far-reaching Anti-Cybersquatting Consumer Protection Act.  So the RIAA needs to chill.  What they really seem to be trying to do is to get ICANN to somehow implement copyright protections or to police the .music name for infringers.  But isn’t that the RIAA’s job?  And haven’t they done it well over the years? 

I can’t believe that ICANN would, could, or ever be forced to assume such a massive compliance burden.  This isn’t a situation like Napster where there was a single website facilitating infringement (which had nothing to do with ICANN).  The RIAA is essentially suggesting that ICANN monitor an entire gTLD for the infringing activities of, well, everyone who uses it.  And even if that were possible or within the purview of ICANN’s official responsibilities (which it’s not), what’s to stop the RIAA from then trying to extend ICANN’s efforts into all of the the other gTLDs that exist…or will exist?  Slippery slopes I can deal with, but slippery cliffs are another matter.  In any instance, a lawsuit against ICANN is something that the RIAA may want to think carefully about before pursuing.  Not that they will, mind you.  Their lawyers are kept very busy indeed.

Shakespeare said it first:  “A rose by any other name would smell as sweet.”  And a domain name by any extension could smell as rotten as any other.  And if people want to use it for illegal purposes, they’ll do it regardless.  As for me, I can’t wait until that proposed ”.xxx” gTLD finally becomes operational.  I just can’t find the porn I’m looking for without it.

Last summer, when I read about the Susan G. Komen Foundation’s aggressive enforcement efforts against other charities to protect its “FOR THE CURE” trademark used in breast cancer research, I thought back then that it could be problematic for the company.  Not necessarily from a legal perspective, but from a public relations one.  And that’s extremely important to keep in mind, because the sorts of issues the Komen Foundation are facing now are the things that keep trademark lawyers up at night.  And when I read about the Foundation’s continued efforts last month, the story wasn’t going to die so quickly.  Such is the nature of the internet.

Before you condemn the Komen Foundation, keep in mind that what’s smart from a legal perspective isn’t always the best PR strategy.  The 2 areas can at times be mutually exclusive.  I’ve had several instances over the years when advising clients that the way in which they’re using their trademarks could be problematic—just think back to trademarks that have become generic such as escalator, aspirin, and cellophane—to understand what I mean. 

The companies which owned those marks failed to police and enforce the ways they were being used (both internally and by others), only to have the marks enter the English lexicon and become unprotectable.  Remember, it’s not VELCRO, but VELCRO brand hook-and-loop fastener.  So it’s not unusual for friction to exist between a company’s legal department and its marketing department, let alone its PR department.  What makes sense legally sometimes translates into a poor PR strategy.  And there’s no easy fix. 

Just ask North Face when it pursued a teenager a couple of years ago who sold a line of clothing called “SOUTH BUTT.”  North Face’s cease-and-desist letter not only circulated throughout cyberspace, but as a result of the company’s enforcement efforts, the story garnered a great deal of media coverage—with the theme being that a big, bad company was “bullying” a teenage entrepreneur.  He garnered a lot of public support and sold a lot of clothes.  North Face eventually settled with him.  Like I said, it’s these sorts of stories that keep trademark lawyers up at night.  You’re damned if you do and damned if you don’t.

The Komen Foundation must—not should, may, or could—but must police the use of its trademark by others or else it risks losing rights in it.  That’s a legal question not open for debate.  And the Foundation is no different than many companies, such as Intel, which also vigorously protect their marks.  As to whether it’s being too aggressive by going after hundreds of smaller local cancer charities which incorporate some derivation of ”FOR THE CURE” into their marketing efforts, that’s both a legal and PR question, but when Steven Colbert makes fun of you like he did recently, you’ve got a PR problem. 

Legally, how much enforcement is enough isn’t set in stone and is highly dependent on the facts of each case.  If a company is taking reasonable steps to notify potential infringers and demands that they cease-and-desist their use of the mark in question, that’s an important first step—which is what the Komen Foundation is doing.  Of course, whether they have to send out hundreds of letters to even small local charities trying to support cancer research in each and every instance is another matter, but such a strategy is sound from a legal perspective.   And deterrence is an important part of enforcement too.  

From a PR perspective, however, raising money for cancer research is quite a sympathetic cause—more so than a kid selling SOUTH BUTT jackets.  And just because you have the legal right to do something doesn’t mean that you should.  Or at least exercise it to such a degree that it could cost the Foundation more down the road, especially a charity which only exists due to the good grace and generosity of others.  But I leave those questions to the PR experts.

Stories abound in the media about how lawyers abuse the legal process.  But judges do so as well—although perhaps not as frequently—and attorneys often can’t do much about it (at least not quickly).  Such was the case for a judge in Tennessee who was reprimanded by state authorities for “excessive delay” after waiting nearly 11 years to rule on a case. 

“Excessive delay.”  Ya think?  Not 11 weeks.  Or 11 Months.  But 11 YEARS.  Judge F. Lee Russell took a case under advisement in 1999 and didn’t rule on it until October of 2010—and only after he learned that he was facing discipline.  Absolutely unbelievable and inexcusable.  And needless to say, not very judicious.

It’s hard to believe he was only reprimanded and not forced to resign.  If a lawyer waited that long to do something (if that were even possible), not only would he rightly be sued for malpractice, but his disciplinary punishment would likely be far more severe than a mere reprimand. 

What’s most egregious is that Judge Russell apparently didn’t grasp that his behavior affected the lives of the litigants.  Most lawyers understand this all too well.  Waiting for a judge to issue a ruling is never much fun, but that’s precisely what the end result of litigation is all about.  As the old saying goes, “justice delayed is justice denied.”  But the adage was never intended to be applied to a ridiculous case like this.  Shame on this judge and on the Tennessee disciplinary authority for only giving him a slap on the wrist.  Objection!

(U.S.S.C., Commercial Law, Intellectual Property, Patent) In a patent application seeking protection for a claimed invention explaining how commodities buyers and sellers in the energy market could protect, or hedge, against the risk of price changes, the denial of the application is affirmed where: 1) the machine-or-transformation test is not the sole test for patent eligibility under 35 U.S.C. section 101; 2) Section 101 precluded a reading of the term “process” that would categorically exclude business methods; and 3) even though petitioners’ application was not categorically outside of section 101 under the two atextual approaches the Court rejected today, that did not mean it was a “process” under section 101.

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(U.S. Fed. Cir., Insurance Law, Intellectual Property, Patent) In a suit for patent infringement, related to computerized methods for administering variable annuity plans, district court’s denial of defendants’ motion for summary judgment as a matter of law that it does not infringe the claims at issue of the ’201 patent is reversed and remanded where: 1) the district court erred in denying defendants’ motion for JMOL of noninfringement as the evidence on the record does not support jury’s verdict of infringement; and 2) because defendant did not infringe, its argument that the district court abused its discretion by refusing to grant it leave to amend its complaint to assert a claim for invalidity under 35 U.S.C. section 101 need not be addressed.

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(U.S. D.C. Cir., Administrative Law, Copyright, Entertainment Law, Intellectual Property, Media Law) In the Recording Industry Association of America’s petition for review of the Copyright Royalty Board’s decision instituting a 1.5 percent per month late fee for late royalty payments, and implementing a penny-rate royalty structure for cell phone ringtones (under which copyright owners received 24 cents for every ringtone sold using their copyrighted work), the petition is denied where: 1) the Board appropriately took market evidence into account when imposing a late fee; 2) a copyright owner’s ability to terminate a section 115 license in no way barred the imposition of a late fee; and 3) even if it were true that divided interests in a copyright made it difficult to make timely payments to each copyright owner, that fact would in no way counsel against the imposition of a late fee.

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(U.S. 10th Cir., Constitutional Law, Copyright, Intellectual Property, International Law) In an action challenging the constitutionality of Section 514 of the Uruguay Round Agreements Act (URAA), which granted copyright protection to various foreign works that were previously in the public domain in the U.S., summary judgment for plaintiffs is reversed where: 1) the government’s interest in securing protections abroad for American copyright holders satisfied this substantial government interest standard; 2) Congress had substantial evidence from which it could reasonably conclude that the ongoing harms to American authors were real and not merely conjectural; and 3) there was substantial evidence from which Congress could conclude that Section 514 would alleviate these harms to American copyright holders.

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(U.S. Fed. Cir., Intellectual Property, Patent) In a patent infringement suit by Encyclopedia Britannica against various defendants, involving patents relating to a multimedia database search system for retrieving textual and graphical information, district court’s grant of summary judgment in favor of defendants in declaring the patents invalid as anticipated by foreign patent application is affirmed as section 120 requires each application in the chain of priority to refer to the prior applications, and here, the patents in suit cannot claim priority as the ’955 application failed to specifically reference the earlier filed ’917 application and did not claim priority to the ’917 application.

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