The purpose of this blog is to hopefully inform and educate people about legal issues in technology, intellectual property, the Internet, and other areas of the law.  So I therefore try to avoid being political, but sometimes it’s hard to do.  And it’s really hard to do when the Republican brand—and isn’t it really all about branding these days?—has drifted so far from its roots that I would be remiss in not mentioning it.

There was a time, before September 11th at least, that Republicans—and the newly minted Tea Party—were for the concept of small and less intrusive government.  I’m all for that for reasons too numerous to mention here.  But I’m especially for it in areas of privacy, particularly on the Internet where personal data about people flows like water.  But alas, so much has changed in the world that up is down, small is big, and privacy now means data retention.

So to say I was disappointed when I read that the Republicans’ first major technology initiative in the House of Representatives was to introduce a bill to require Internet companies to keep track and store user data, would be an understatement.  The new bill, if it becomes law, would require ISPs and other Internet companies to store the Internet Protocol (“IP”) addresses and other records of users’ online activities for 2 years.  This goes far beyond what the Electronic Communication Transactional Records Act (“ECTRA”) passed in 1996 requires, which is for ISPs to retain any “record” for up to 180 days (in two 90 day increments) upon request by a “governmental entity.”  So where’s the smaller and less intrusive government we were promised?

The biggest backers of the bill are—no surprise here—law enforcement and prosecutors.  Of course they want the ability to fully investigate crimes on the Internet.  Who could realistically be against going after pedophiles, identity thieves, and scam artists?  But the potential for abuse by law enforcement remains a real one and a 2 year retention requirement (as opposed to companies who voluntarily save user data for a set period of time) strikes me as excessive.  Just ask these folks in Chicago who are being victimized by the police and prosecutors over the state’s absurd wiretap law.  So overreaching by law enforcement occurs in many different contexts.

As a practical common sense matter, do records on EVERYONE really need to be retained for at least 2 years?  Perhaps ECTRA has the more reasoned approach (dare I say) which requires preservation pursuant to a court order issued “only if the governmental entity offers specific and articulable facts showing that there are reasonable grounds to believe that the contents of a wire or electronic communication, or the records or other information sought, are relevant and material to an ongoing criminal investigation.”  18 U.S.C. § 2703(d). 

But to retain records on everyone so that the police and law enforcement can cull through them at a later time and at their leisure seems particularly ripe for all sorts of abuse.  Hopefully, the Democrat-controlled Senate will be far more thoughtful in the consideration of such sweeping legislation (assuming it gets that far).  And if they’re not, then I’ll criticize the Democrats too, who are supposed to be more concerned about the “common man.”  Well, the common man needs his privacy too.  Rumor has it that he’s got the Internet now.

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.

We’ve had plenty of problems with Senator Patrick Leahy on this blog, as his push is to always make intellectual property laws worse, such as with ProIP and now COICA. However, sometimes he does things that deserve kudos, such as his plan to investigate the TSA’s new scanners, calling them “invasive.” Leahy apparently wants the Senate Judiciary Committee (which he heads) to examine whether or not the machines really make sense. Of course, perhaps we should withhold any kudos until we find out what comes out of that “review…”

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Techdirt Mike Masnick

Hopefully by now, most people who have upgraded to a smartphone (such as an iPhone, Blackberry, or Android) have realized that it’s not simply a phone, but a powerful mobile computer which just happens to be about the size of a 3″ x 5″ index card.  And just like your big heavy personal computer or laptop, it contains all sorts of personal information—perhaps too much information—about you and what you do.  If you haven’t come to that conclusion yet, the increasing police power of the state may soon force you to.  It should also force you to take steps to protect yourself from what could become an overzealous police officer should you ever find yourself in the unfortunate situation of being arrested (even for a misdemeanor).

For me, a big part of being a technology and internet lawyer is privacy law.  While privacy appears to have all but  disappeared in this 24/7 networked world where everyone posts a whole lot of information about themselves, it’s easy to forget that not everything is everyone’s business—especially the police, who may seek to use such information against you for violations of laws that you may not have realized even existed.  Think it can’t happen?  As a lawyer, I’ve seen many overzealous police officers, state agents, and prosecutors looking to establish a name for themselves.  Civil liberties be damned.  (Of course, there are many good ones too, but it’s often the other ones we hear about.)

An insightful article by Ryan Radia discusses the recent California Supreme Court decision in People v. Diaz, which held that police officers can lawfully search a mobile phone on a person they arrest without first obtaining a search warrant.  The court found that mobile phones, like cigarette packs and wallets, fall under the “search incident to arrest” exception of the Fourth Amendment.  While the Supreme Court may have the final say as to whether this is legal, many state courts have come to the same conclusion as California has.

Most significantly, Radia discusses the importance of taking measures to make your smartphone as secure as possible, such as full disk encryption of all content on the device.  He notes that password protection—which is certainly an important first step—may not be enough and is easy to bypass due not only to the rise of digital forensics, but the vulnerabilities in your smartphone’s own operating system that a forensic expert can exploit easily.  While Radia notes that no mobile encryption system at the moment is perfect or especially secure, this will hopefully change.

If you have a few minutes, the article is definitely worth a read.  Whether people realize it or not, privacy is one of the most daunting issues facing us (and lawyers) in this information age, and the law has difficulty keeping up.  And as the Diaz case shows when the law does catch up, it’s usually not in our favor, but works to the benefit of the state’s police power.  At least for now.

There was a time about 15 years ago or so that requesting an opposing party’s e-mail in litigation was considered to be unusual and out-of-the-ordinary.  Not anymore.  As e-mail use grew—if not exploded in the 1990s—discovery rules have evolved as well and now most courts require e-mail and other e-discovery to be produced just like any other paper document.  (In fact, there is a whole comprehensive area of technology and internet law that has developed just around e-discovery.)  And just as parties can be sanctioned for not turning over relevant hard copy documents, failing to produce e-mails can have serious consequences for both lawyers and litigants.

According to a recent article and study by King & Spaulding, which examined numerous 2009 federal decisions addressing e-discovery violations and sanctions, the study’s authors found that “sanction awards for e-discovery violations have been trending ever-upward for the last 10 years and have now reached historic highs.”  Sanctions included susbstantial monetary awards (bad enough), adverse jury instructions (very bad), and case dismissals (the worst).  The monetary sanctions were as high as $5 million in some instances.  That’s serious pocket change no matter who you are and indicates how seriously courts view a party’s compliance obligations.

According to the study, defendants were sanctioned almost 3 times as often as plaintiffs were.  That’s not really a shocker.  Defendants don’t enjoy being sued (not surprisingly) and will put up all sorts of obstacles during the discovery process.  Smart and ethical defense counsel will try not to let that happen, but I’ve seen instances where defendants aren’t even honest with their own attorneys when it comes to giving them the information they need to comply with their clients’ own discovery obligations.

The most common misconduct identified in the study was failing to preserve electronic evidence, failing to produce the records altogether, or delaying the production.  Lawyers were typically sanctioned along with their clients, and the sanction included payment of the opposing party’s attorneys’ fees and costs (which ranged from $500 to $500,000). 

By sanctioning attorneys as well, courts are sending a very clear message that the lawyers must be actively involved in the discovery process and must, of course, act properly throughout.  And the discovery process can at times be daunting given the huge number of e-mails, instant messages, and other e-documents—which could easily be in the millions in some large cases—that may have to be produced.  Nevertheless, counsel must be engaged in the process throughout.  It’s easy to see how litigation can get so costly, isn’t it (even without the sanctions)?

The article also mentions another study by Gibson Dunn which looked at these issues in 2010 and found that the imposition of e-discovery sanctions have declined somewhat from 2009, e.g., courts (both state and federal) granted sanctions 55% of the time in 2010, as opposed to 70% in 2009.  Increased calls for discovery reform could be part of the reason.

In reality, however, I don’t find such a decline to be all that comforting (assuming it’s tangible at all).  A 55% chance of being sanctioned isn’t exactly something that you can “brag” about to a non-complying client, and lawyers are well-advised to discuss the serious consequences of non-compliance with recalcitrant clients.  And of course, clients are particularly well-advised to let lawyers do their job.  Or everyone ends up paying the price.

I love it when tech giants battle over stuff, particularly in the legal arena.  When you have two parties with virtually unlimited resources and an unfettered willingness to spend money on lawyers, it makes for interesting reading … and hopefully for more interesting law at some point down the line.  We don’t always have such excitement in the Boston legal community.

Such is the case with Microsoft’s recent filing at the Trademark Trial and Appeal Board (“TTAB”) (of the United States Patent and Trademark Office) contesting Apple’s attempt to trademark the term “APP STORE.”  Microsoft argues that “APP STORE”  is “generic for retail store services featuring apps and unregistrable for ancillary services such as searching for and downloading apps from such stores.”  The company further contends that “APP”  is “a common term for mobile software applications, while “STORE” is a common term for a “place where goods are sold.” 

Following so far?  A generic term can’t be registered for use as a trademark because it refers to the actual product class of which a particular product is a member and therefore can’t be protected as a mark.  It would be like trying to register the term “VIDEO GAME” for video games or—for those of us over 40 who still remember video games’ predecessors—the term “PINBALL” to describe pinball machines.

Microsoft’s argument has merit and the company has a reasonable basis to contest the mark.  Of course, this doesn’t mean that Apple won’t win in the end, but it should be an interesting read when the TTAB decision come out—at least to us trademark lawyers.  (And the parties may then have the opportunity to fight it out in federal court.)  Needless to say, neither party suffers from a lack of resources to fight to the bitter end.  But they could settle too, if for instance, Apple lets Microsoft use the term to describe its own “App Store.”

There are numerous factors which the TTAB and a court can take into consideration when determining whether a mark is generic, including:  how the potential trademark owner itself uses the term; whether third parties use the term as a common name for their own products; what the dictionary definition is (if any) for the term as a common name for a particular type of product; whether there are other available terms to describe the common name for the products; the period of time in which the trademark has been in use; how the press and others use the term; and of course, the results of any survey evidence that either party introduces (which are usually subject to vigorous attack by the other party).  There are other factors too, but these tend to be the main ones for determining “genericness.” 

Without going into too much detail here, Microsoft does have some favorable evidence to support its claim, as does Apple.  While there are a ton of trademark cases that discuss generic marks, a 4th Circuit decision comes to mind, Hunt Masters, Inc. v. Landry Seafood Restaurant, Inc., 240 F.3d 251 (4th Cir. 2001).  In that case, the court found that the term, “CRAB HOUSE” to describe a restaurant that, uh, served crabs “is a generic term referring to a class of restaurants that serve crabs.”  It found:

Here, the meaning of the individual words is fairly clear. A crab is “any of numerous chiefly marine broadly built crustaceans,” while “restaurant” is one of the many definitions of the word “house.”  Webster’s New International Dictionary 1096 (3d ed. 1961). Other common words that are often used as synonyms for “restaurant” include bar, parlor, and shop. When preceded by a type of food, these words describe various classes of restaurants, such as ale houses, tapas bars, ice cream parlors, and coffee shops. Each term denotes a class of restaurant serving a particular type of food, just as”crab house” denotes a class of restaurant that serves crabs. 

The court also rejected the plaintiff’s survey evidence when assessing genericness.  So “CRAB HOUSE” was deemed to be unprotectable.  While there are a few factors that differentiate this case and some of its principles from what Microsoft is arguing at the TTAB (such as time frame related to evaluating genericness), given the abundance of legal precedent in this area, the company can reasonably argue that ”APP STORE” is a generic term (or a merely descriptive one) for a place that sells applications.  Much of the fight will be over the term “APP.”

Of course, as any intellectual property or technology lawyer will tell you, trademark law is a highly nunaced area of practice, so these cases can turn on distinctions that at times seem more imaginary than real—especially in a sector as fast-paced as technology.  We’ll just have to wait and see.

Sigh.  Although I’m not surprised–especially given this pernicious and false belief that if it’s on the internet then it must be free–it’s been estimated that 43 sites which engage in digital piracy account for about 21 billion visits per year.  That’s roughly 3 times the current population of the Earth.  As an intellectual property attorney, I always find such statistics sobering given the rampant copyright and trademark infringement which occurs on the internet.  Predictable, but sobering nonetheless.  And no doubt the public hates those lawyers who pursue the infinitesimally small percentage of infringers that they’re able to find and sue, let alone actually stop or collect against.  The battle continues!

(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.

FindLaw Opinion Summaries - IP FindLaw Opinion Summaries - IP

(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.

FindLaw Opinion Summaries - IP FindLaw Opinion Summaries - IP

(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.

FindLaw Opinion Summaries - IP FindLaw Opinion Summaries - IP