Tech Law Journal Daily E-Mail Alert
September 18, 2001, 9:00 AM ET, Alert No. 270.
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Federal Circuit Rules in Hilgraeve v. Symantec Patent Case
9/17. The U.S. Court of Appeals (FedCir) issued its opinion in Hilgraeve v. Symantec, a patent infringement case involving computer virus detection software. The Appeals Court vacated in part, affirmed in part, and remanded.
Hilgraeve is the holder of U.S. Patent No. 5,319,776, titled "In transit detection of computer virus with safeguard". Symantec provides Internet security products, including anti virus protection products. Hilgraeve filed a complaint in U.S. District Court (EDMich) against Symantec alleging that its PCAnywhere and Norton Anti Virus products infringe its '776 patent.
This patent describes a program that scans for computer viruses. It scans a body of data during its transfer, and before storage of the data with potential viruses on the destination storage medium. If the program detects signs of a virus during the scan, and the program automatically blocks storage. Hilgraeve argued that Symantec's products screen incoming digital data for viruses during transfer and before "storage" on the destination storage medium. Symantec argued its products do not infringe because they screen the incoming digital data only after it has been transferred and "stored" on the destination storage medium.
Hilgraeve also filed a separate complaint against McAfee. The case also resulted in an appeal to the Federal Circuit. The Court issued its opinion in August, 2000. Citations: Hilgraeve v. McAfee, 70 F. Supp. 2d 738 (E.D. Mich. 1999) and Hilgraeve v. McAfee, 224 F.3d 1349 (Fed Cir 2000).
Two issues were involved in the present appeal: claim construction (and particularly, the meaning of the word "storage"), and the defense that Symantec holds a license to the '776 patent.
The District Court granted Hilgraeve's motion for summary judgment that Symantec did not have a license to the '776 patent. The District Court granted Symantec's motion for summary judgment of non-infringement. Hilgraeve appealed; and Symantec cross appealed. The Federal Circuit vacated the grant of summary judgment of non-infringement, and generally affirmed the grant of summary judgment that Symantec did not license the patent.
Federal Circuit Rules on Personal Jurisdiction in Patent Cases
9/17. The U.S. Court of Appeals (FedCir) issued its opinion in Pieczenik v. Dyax, a patent infringement case in which the issue on appeal was whether the defendant had sufficient contacts with New York to give the U.S. District Court (SNDY) personal jurisdiction under the applicable New York long-arm statute.
Dyax's only contact with the State of New York was that it had entered into a licensing agreement with a corporation domiciled in New York. The District Court dismissed for lack of jurisdiction. The Court of Appeals affirmed.
7th Circuit Rules on Copyright and Offers of Judgment
9/17. The U.S. Court of Appeals (7thCir) issued its opinion in Harbor Motor Company v. Arnell Chevrolet Geo, a case involving copyright infringement, and awards of costs and attorneys fees following rejections of offers of judgment.
One car dealer (Arnell) copied the newspaper ad of another car dealer (Harbor). Harbor filed a complaint in U.S. District Court (NDInd) against Arnell and the newspaper alleging copyright infringement. The two defendants jointly made an offer of judgment of $21,000. Harbor rejected this. The District Court granted judgment as a matter of law to the newspaper. The jury awarded Harbor $12,500 for its claim against Arnell. The District Court awarded defendants costs and attorneys fees totaling $175,000.
The Appeals Court reversed the judgment as a matter of law for the newspaper, and hence, its award of costs and attorneys fees. The Appeals Court also reversed the order awarding Arnell costs and attorney's fees as the prevailing party under FRCP 68. The Appeals Court further remanded the case to the District Court with instructions to award Harbor its costs.
District Court Rules in Corel v. US
9/17. The U.S. District Court (DDC) issued it opinion [PDF] in Corel v. USA, a case involving government procurement of software. Corel filed a complaint in U.S. District Court against the U.S. seeking declaratory and injunctive relief to enjoin the U.S. Department of Labor (DOL) from implementing its decision to standardize its software to Microsoft products. The District Court denied Corel's motion for summary judgment. It held that the DOL's procurement of Microsoft software neither violated the applicable federal procurement statute nor was unreasonable.
People & Appointments
9/17. Paul Gallant was named Special Advisor to Kenneth Ferree, chief of the FCC's Cable Services Bureau. He was previously a Legal Advisor on cable and broadcast issues to former FCC Commissioner Gloria Tristani who left earlier this month. on cable and broadcasting issues. He has also previously worked for Qwest Communications International, BroadBand Office, Inc., and former Commissioner James Quello. See, FCC release.
FBI's NIPC Warns of Cyber Attacks
9/17. The FBI's National Infrastructure Protection Center (NIPC) issued its Advisory 01-020 on September 14 stating that it "expects to see an upswing in incidents as a result of the tragic events of September 11, 2001. Increased hacking attacks are likely to have two motivations: Political hacktivism by self-described "patriot" hackers targeted at those perceived to be responsible for the terrorist attacks. NIPC has already received reports of individuals encouraging vigilante hacking activity. Virus propagation in which old viruses are renamed to appear related to recent events."
On September 17 the NIPC issued its Advisory 01-021 stating that it "expects an increase in Distributed Denial of Service (DDoS) attacks." The advisory continued that "On September 12, 2001, a group of hackers named the Dispatchers claimed they had already begun network operations against information infrastructure components such as routers. The Dispatchers stated they were targeting the communications and finance infrastructures. They also predicted that they would be prepared for increased operations on or about Tuesday, September 18, 2001." The NIPC added that "The Dispatchers claim to have over 1,000 machines under their control for the attacks. It is likely that the attackers will mask their operations by using the IP addresses and pirated systems of uninvolved third parties."
The NIPC concluded that "There is the opportunity for significant collateral damage to any computer network and telecommunications infrastructure that does not have current countermeasures in place." The NIPC also said that "System administrators are encouraged to check their systems for zombie agent software and ensure they institute best practices such as ingress and egress filtering." The NIPC provides such software.
IIPA Supports Trade Promotion Authority Bill
9/13. The International Intellectual Property Alliance wrote a letter [PDF] to House Rules Committee Chairman David Dreier (R-CA) urging prompt enactment of Trade Promotion Authority (TPA), which is also known as fast track.
It wrote that "If America's copyright industries are to remain successful in global markets, the President, in consultation with Congress and the private sector, must have effective and credible authority to negotiate bilateral, regional and multilateral trade agreements that will reduce barriers to American creative works, and enhance intellectual property protection and enforcement available for American creators. Failure to grant TPA will limit our nationís efforts to secure non-discriminatory market access and achieve strong intellectual property rights protection and enforcement worldwide. If Congress fails to act promptly, Americaís ability to retain its leadership role in setting world trade standards will be seriously jeopardized."
The signatories included the heads of the IIPA, Motion Picture Association of America, American Publishers Association, Business Software Alliance, Recording Industry Association of America, and the Interactive Digital Software Association.
Intel and Rambus Sign Cross License Agreement
9/17. Intel and Rambus released substantially identical statements that the two companies "signed a comprehensive patent cross-license agreement that supersedes the prior agreement between the companies. The new cross-license provides complete patent coverage to Intel for all patents while providing Rambus license coverage necessary for Rambus' high-speed interface businesses." See, Intel release and Rambus release.
USPTO Funding
9/13. HR2500, the FY 2002 appropriations bill for the Departments of Commerce, Justice, State and the Judiciary, was passed by the Senate late on Thursday, September 13. It provides for $1,139,001,000 in funding for the USPTO, derived from user fees.
Smoke, Mirrors, and Diversions. The bill includes the following language regarding USPTO funding: "For necessary expenses of the United States Patent and Trademark Office provided for by law, including defense of suits instituted against the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, $856,701,000, to remain available until expended, which amount shall be derived from offsetting collections assessed and collected pursuant to 15 U.S.C. 1113 and 35 U.S.C. 41 and 376, and shall be retained and used for necessary expenses in this appropriation: Provided, That the sum herein appropriated from the general fund shall be reduced as such offsetting collections are received during fiscal year 2002, so as to result in fiscal year 2002 appropriation from the general fund estimated at $0: Provided further, That during fiscal year 2002, should the total amount of offsetting fee collections be less than $856,701,000, the total amounts available to the United States Patent and Trademark Office shall be reduced accordingly: Provided further, That an additional amount not to exceed $282,300,000 from fees collected in prior fiscal years shall be available for obligation in fiscal year 2002, to remain available until expended: ..."
9/18. TLJ published an article in the TLJ web site on September 17 titled An Analysis of How the Events of September 11, 2001 May Change Federal Law. It stated, at Part IV, regarding the Export Administration Act, that "The House passed a much different version just before the August recess." In fact, it was the House International Relations Committee that passed a version of the bill. TLJ thanks readers who wrote TLJ about this.
Tuesday, Sept 18
Rosh Hoshanah. The House will not be in session.
Wednesday, Sept 19
POSTPONED. 12:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Committee will hold a brown bag lunch. Location: FCC Conference Room 8B-516 (Eighth Floor South).
Extended deadline to submit comments to the Copyright Office (CO) regarding the determination of reasonable rates and terms for the digital performance of sound recordings. The CO extended the period to file comments to proposed regulations that will govern the RIAA collective when it functions as the designated agent receiving royalty payments and statements of accounts from nonexempt, subscription digital transmission services which make digital transmissions of sound recordings under the provisions of ß 114 of the Copyright Act. Comments and Notices of Intent to Participate in a Copyright Arbitration Royalty Panel Proceeding are now due by September 19. See, notice in Federal Register, September 4, 2001, Vol. 66, No. 171, at Page 46250.
Thursday, Sept 20
CANCELLED. 9:30 - 11:30 AM. The American Enterprise Institute will present a lecture titled "Access Pricing in Telecommunications." The speaker will be Mark Armstrong, a fellow in economics at Nuffield College at Oxford University. The price for admission is $20. Location: Wohlstetter Conference Center, American Enterprise Institute, 1150 17th Street, NW, Washington DC.
POSTPONED. 10:00 AM. The Senate Judiciary Committee will hold a hearing "to examine instant messaging, focusing on platforms and communications on the Web." Location: Room 106, Dirksen Senate Office Building.
10:00 AM. The FCC's Technological Advisory Council is scheduled to hold a meeting. Location: FCC, 445 12th Street, SW, Room TW-C305 (Commission Meeting Room), Washington DC.
12:15 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee is scheduled to host a brown bag lunch featuring FCC Commissioner Kathleen Abernathy's Legal Advisors. No RSVP is required. Location: Hogan & Hartson, 555 13th St., Room 12E-407.
Friday, Sept 21
8:00 AM. Tom Sugrue, Chief of the FCC's Wireless Telecommunications Bureau, is scheduled to address the Industrial Telecommunications Associationís Private Wireless Spectrum Management Conference and Exposition. Location: Grand Hyatt, Washington DC.
8:30 - 10:00 AM. Harold Furchtgott-Roth and other American Enterprise Institute scholars will hold a press breakfast on telecommunications issues. RSVP to Veronique Rodman, Director of Public Affairs, AEI at 202-862-4871 or
12:00 NOON - 1:15 PM. Entrust and the Business Software Alliance will host a luncheon titled "The Three Faces of Internet Security: E-commerce, E-government & Cyber security". Sen. Robert Bennett (R-UT) will address critical infrastructure protection. William Connor (CEO of Entrust) and Daniel Chenok (Head of OMB's Information Technology and Policy Division) will discuss the impact of Internet security on e-commerce, e-government and national security. For more information, contact Caroline Dietz at 202-715-1532 or
FTC Funding
9/13. HR 2500, as passed by the Senate on September 13, provides $156,270,000 in funding for the Federal Trade Commission (FTC) for FY 2002.
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