Monday 25 June 2007 at 11:54 pm
Credit Suisse v. Billing (June 18, 2007)
Admittedly, this case, Credit Suisse v. Billing, is barely, nominally, appropriately considered a case involving law and technology. It's a slow day...
Still, in Credit Suisse v. Billing, a group of investors filed suit against an investment bank alleging that the investment bank violated antitrust laws when it formed syndicates to help execute initial public offerings (IPOs) for several hundred technology-related companies.
The investors argued that the investment bank unlawfully agreed that they would not sell newly issued securities to a buyer unless the buyer committed (1) to buy additional shares of that security later at escalating prices (known as "laddering"), (2) to pay unusually high commissions on subsequent security purchases from the underwriters, or (3) to purchase from the underwriters other less desirable securities (known as "tying").
Apparently, to avoid the odd circumstances where evidence that shows unlawful antitrust activity may also be lawful securities marketing activity, the court's majority agreed that federal securities law impliedly precludes application of antitrust laws to the conduct in question.
Justice Thomas was the lone dissenter. Thomas concluded that the case against the investment bank should go forward because the Court did not have to resolve a purported conflict between antitrust law and securities law.
Justice Breyer authored the majority opinion (7-1; Kennedy took no part in deciding the case).
Monday 25 June 2007 at 11:28 pm
The Supreme Court's recent unanimous decision in KSR International Co. v. Teleflex, Inc. criticized and modified the obviousness standard used in patent cases. The decision may make it more difficult to obtain new software patents or to protect existing software patents because the Court expressed agreement that formalistic views of what constitutes nonobviousness under Patent law has resulted in lawyerly drafting of patent claims making much ado about nothing. In other words, some patents are invalid because the invention is as obvious as a headache - - even if the word headache never appeared in a medical text book.
According to the Court - "The diversity of inventive pursuits and of modern technology counsels against confining the obviousness analysis by a formalistic conception of the words teaching,
suggestion, and motivation, or by overemphasizing the importance of published articles and the explicit content of issued patents. In many fields there may be little discussion of obvious techniques or combinations, and market demand, rather than scientific literature, may often drive design trends. Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, for patents combining previously known elements, deprive prior inventions of their value or utility."
Software programming, by its nature, often involves building upon the obvious and combining previously known objects or code.
Friday 15 June 2007 at 10:18 pm
A federal judge in Los Angeles, U.S. Magistrate Judge Jacqueline Chooljian, ruled that a computer server's RAM, or random-access memory, is a tangible document that can be stored and must be turned over in a copyright infringement lawsuit by the MPAA against the Netherlands-based Torrent Spy website. The decision is widely viewed as illustrative of the mistakes judges make in applying law in a case when they do not understand the facts.
The error in this case - - albeit, the case concerns Federal Rule of Civil Procedure - Rule 34(a) - - echoes the error that judges make in copyright and patent cases involving software. Namely, courts are confused as to how best to determine whether electronic data is stored in a tangible, fixed manner.
The appropriate answer depends on an understanding of computers and software, in part, and on legislative (or, policy-making) guidance. The limited tools of legal analysis are inadequate for the task. Hence, Judge Jacqueline Chooljian based her decision on the inadequacy of legal precedent. The judge looked for analogies in the law and found one in a case that, itself, was based on the inadequacy of legal precedent when it was decided (Mai Systems v. Peak (9th Cir. 1993). Consequently, we have courts bootstrapping bad law to make more bad law. What a mess these courts are making.
Given the increasing importance of electronic commerce, I am shocked and, at times, horrified by the continuing troublesome outcomes produced by some of our courts when the target of litigation is technology.
Even when the lawyers practicing before them well-understand the fine points of the technologies targeted by the litigation, too many courts (judges or juries) seem to lack the expertise to engage in reliable fact-finding.
Judge Jacqueline Chooljian was presiding over a case involving the MPAA and TorrentSpy. The movie industry challenged TorrentSpy by accusing it of copyright infringement. The
court concluded that RAM data was discoverable by plaintiffs in a copyright infringement lawsuit. I suppose you cannot fairly express disapproval of plaintiffs' lawyers who zealously pursue dubious claims, if it is widely viewed that it is the court's duty to decide whether the claim is dubious. Yet, this system works well only when the court is up to the task before it.
Wednesday 06 June 2007 at 09:04 am
The U.S. Supreme Court’s recent decisions strongly suggesting that the Constitutionally mandated balance between promoting open access to innovatory ideas and support of intellectual property interests had run askew in patent law finally has had its intended effect. The Court was pointing out that patent law was suffering from Congress’ over-reliance on courts to bear the weight of gate-keeping patent law developments.
Today, Congress will hold hearings on the proposed Patent Reform Act of 2007 as part of a potentially ambitious step toward patent law reform (Senate Bill 1145). Today’s Wall Street Journal includes an article identifying a divergence of interests between drug makers and technology companies on the suitability of certain so-called business methods patents. Technology companies want relief from dubious patents and drug makers do not, according to the Journal.
The current version of the Patent Reform Act of 2007 appears to be largely a series of changes in process (e.g., giving priority to the first to file rather than the first to invent), but there are proposed changes that impact the scope of patents. (A summary and copy of the current legislation is available from
Patently-O Patent Law Blog).
One example is the proposal to explicitly conform section 103 of the Patent Act to the Supreme Court’s rejection of the Federal Circuit’s formalistic approach to reviewing prior art when assessing patentability of claimed inventions.
Even so, if this proposed legislation is a reliable measure of what ultimately may be enacted, unfortunately, we can be assured that we will not get legislation that squarely addresses what is needed for genuine subject matter reform of patent law.
