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October 24, 2006, Alert No. 1,474.
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IBM Sues Amazon for Patent Infringement in Eastern District of Texas

10/23. IBM filed two complaints in U.S. District Court (EDTex) against Amazon alleging patent infringement.

John Kelly, an IBM SVP, stated in a release that "IBM's property is being knowingly and unfairly exploited ... IBM is one of the world's leading creators of intellectual property and one of the most progressive in embracing new, highly collaborative ways of driving and managing innovation. Everything we do is premised on the fundamental principle that IBM's intellectual property is one of our core assets, and represents the work product of tens of thousands of scientists and engineers and billions of dollars of investment."

The patents in suit are U.S. Patent No. 5,796,967, titled "Method for presenting applications in an interactive service", U.S. Patent No. 5,442,771, titled "Method for storing data in an interactive network", U.S. Patent No. 7,072,849, titled "Method for presenting advertising in an interactive service", U.S. Patent No. 5,446,891, titled "System for adjusting hypertext links with weighted user goals and activities", and U.S. Patent No. 5,319,542, titled "System for ordering items using an electronic catalogue".

IBM is a New York corporation based in Armonk, New York. Amazon is a Delaware corporation based in Seattle, Washington.

The connection of these companies and these lawsuits to the Eastern District of Texas is insignificant. However, the Eastern District of Texas is a court of choice for forum shopping plaintiffs in patent cases.

There are legislative proposals that would limit abuse of federal venue rules that enable forum shopping in patent cases. See for example, Section 7 of HR 5096, the "Patents Depend on Quality Act of 2006", or "PDQ Act", introduced by Rep. Howard Berman (D-CA) and Rep. Rick Boucher (D-VA) on April 5, 2006, and Section 8 of S 3818, the "Patent Reform Act of 2006 ", introduced by Sen. Orrin Hatch (R-UT) and Sen. Patrick Leahy (D-VT) on August 3, 2006.

A spokesman for Amazon stated in an e-mail message to TLJ that "We have a general policy of not commenting on active litigation outside of our court filings".

Federal Circuit Vacates in Qualcomm v. Nokia

10/20. The U.S. Court of Appeals (FedCir) issued its opinion [15 pages in PDF] in Qualcomm v. Nokia, a patent case. However, the issue in this appeal relates to a licensing agreement that contains an arbitration clause. The Court of Appeals vacated the District Court's order denying Nokia's motion for stay pending arbitration.

Qualcomm pioneered the Code Division Multiple Access (CDMA) technology for wireless communications. It holds many patents related to CDMA. It also hold patents not related to CDMA technology.

Nokia makes wireless equipment.

Qualcomm and Nokia entered into an agreement under which Qualcomm granted Nokia a non-exclusive license to some of Qualcomm's patents, permitting Nokia to make and sell products that incorporate CDMA technology. This agreement included an arbitration clause that states that "Any dispute, claim or controversy arising out of or relating to this Agreement, or the breach or validity hereof" ... "shall be settled by arbitration in accordance with the arbitration rules of the American Arbitration Association (the 'AAA Rules')."

Subsequently, Qualcomm filed a complaint in U.S. District Court (NDCal) against Nokia alleging that Nokia infringed twelve of its patents, other than CDMA patents covered by the license agreement.

Nokia then initiated an arbitration proceeding before the AAA, seeking resolution of two issues. First, it asserted an estoppel defense. It argued that Qualcomm engaged in misleading conduct that caused Nokia to believe that Qualcomm did not hold issued or pending patents it intended to assert against Nokia’s GSM products.

Second, Nokia asserted a license defense in the arbitration proceeding. It argued that it is entitled to a declaration that it had a valid and enforceable license to make, import, use, sell, offer to sell, lease, or otherwise dispose of products that incorporate CDMA technology and that Qualcomm’s claims of infringement against those products should be barred by the 2001 Agreement.

Nokia filed a motion with the District Court to stay the litigation pending arbitration. The District Court denied the motion. Nokia brought the present appeal.

The Court of Appeals vacated the District Court's order, and remanded "to perform the inquiry in the first instance".

The Federal Arbitration Act's stay provision, which is codified at 9 U.S.C. § 3, provides in full that "If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration."

The Court of Appeals wrote that "this case raises the question of how to reconcile an agreement to delegate arbitrability decisions to an arbitrator in accordance with the language of section 3 of the FAA, which specifies that the district court be ``satisfied´´ as to the arbitrability of an issue before ordering a stay. Thus, we must necessarily determine what inquiry the district court should perform in order to be "satisfied" under section 3."

The Court of Appeals concluded that "in order to be ``satisfied´´ of the arbitrability of an issue pursuant to section 3 of the FAA, the district court should first inquire as to who has the primary power to decide arbitrability under the parties' agreement. If the court concludes that the parties did not clearly and unmistakably intend to delegate arbitrability decisions to an arbitrator, the general rule that the ``question of arbitrability ... is ... for judicial determination´´ applies and the court should undertake a full arbitrability inquiry in order to be ``satisfied´´ that the issue involved is referable to arbitration."

The Court of Appeals continued, "If, however, the court concludes that the parties to the agreement did clearly and unmistakably intend to delegate the power to decide arbitrability to an arbitrator, then the court should perform a second, more limited inquiry to determine whether the assertion of arbitrability is ``wholly groundless.´´ ... If the court finds that the assertion of arbitrability is not ``wholly groundless,´´ then it should stay the trial of the action pending a ruling on arbitrability by an arbitrator. If the district court finds that the assertion of arbitrability is ``wholly groundless,´´ then it may conclude that it is not ``satisfied´´ under section 3, and deny the moving party's request for a stay."

The Court of Appeals concluded that the District Court did not perform this inquiry, and hence, vacated, and remanded to the District Court to perform this inquiry.

This case is Qualcomm Inc. and Snaptrack Inc. v. Nokia Corporation and Nokia, Inc., App. Ct. No. 2006-1317, an appeal from the U.S. District Court for the Southern District of California, D.C. No. 05-CV-2063 B, Judge Rudi Brewster presiding.

Judge Sharon Prost wrote the opinion of the Court of Appeals, in which Judge Schall joined. Judge Pauline Newman dissented, but wrote no opinion.

Federal Circuit Rules in Safeclick v. Visa

10/23. The U.S. Court of Appeals (FedCir) issued its opinion [PDF] in Safeclick v. Visa, a patent infringement case relating to security for online credit card transactions. The Court of Appeals affirmed the District Court's summary judgment of non-infringement.

Safeclick owns U.S. Patent No. 5,793,028, titled "Electronic transaction security system". It filed a complaint in U.S. District Court (NDCal) against Visa alleging that Visa's "Verified by Visa" service infringes several claims of the patent in suit. The District Court granted summary judgment of non-infringement to Visa. Safeclick brought this appeal. The Court of Appeals affirmed.

The Northern District of California has local patent rules, which the District Court concluded Safeclick had violated. Hence, the Court of Appeals opinion also addresses appellate review of District Court rulings based upon local rules.

This opinion states that it "is not citable as precedent".

This case is Safeclick LLC v. Visa International Service Association and Visa USA, Inc., App. Ct. No. 06-1182, an appeal from the U.S. District Court for the Northern District of California. Judge Clevenger wrote the opinion of the Court of Appeals, in which Judges Bryson and Gajarsa joined.

Fourth Round of Korea US FTA Negotiations Commence

10/23. Wendy Cutler, Assistant U.S. Trade Representative for Japan and Korea, held a news conference in Jeju, Korea, regarding the commencement of the fourth round of the Korea United Stated free trade agreement (KORUS FTA) negotiations. See, transcript [5 pages in PDF].

Cutler said that "We have sixteen negotiating groups and two working groups meeting here this week. And again, both sides have brought large and dedicated negotiating teams to the table. The U.S. delegation is comprised of about 100 delegates from nearly 20 different government agencies. We have come to Jeju well prepared and ready to make progress."

She said little about technology related trade issues. However, she said that "The progress we seek this week is not just limited to tariffs. It also involves movement on a series of non-tariff measures as well".

She added that "we're also looking for progress in the areas that have to do with rules and text and dealing with non-tariff measures, and for the United States, our priorities lie in many chapters, including automotive, pharmaceuticals, intellectual property protection, investment and other areas."

In addition, Karan Bhatia, a Deputy USTR, gave a speech [7 pages in PDF] at Yonsei University in Seoul, Korea. He said that "the KORUS FTA can be one of the pillars upon which a new 21st Century U.S.-Korea partnership is founded -- a partnership that benefits both of our countries economically, that binds the United States firmly to North Asia, and that serves as a model of open markets to countries on both sides of the Pacific."

He also noted that "Korea has also taken steps to ensure that its intellectual property laws keep pace with the global changes in this area."

More News

10/24. The Progress and Freedom Foundation (PFF) released a short paper [6 pages in PDF] titled "The Patent Prejudice: Intellectual Property As Monopoly". The author is the PFF's Solveig Singleton. While the "assessment of IP as monopoly is now particularly predominant in international policy circles", writes Singleton, "Neither patents nor copyrights can be fairly thought of as creating economic monopoly in a way that injures consumers." She concludes that "rhetoric about monopolies is nothing but a distraction."

10/20. The Federal Communications Commission (FCC) released the text [51 pages in PDF] of its TV white space order. This item is numbered FCC 06-156 and titled "First Report and Order and Further Notice of Proposed Rule Making".  This proceeding is numbered ET Docket No. 04-186 and ET Docket No. 02-380, and titled "Unlicensed Operation in the TV Broadcast Bands". The FCC adopted, but did not release, this item at its October 12 event titled "Open Meeting". See also, story titled "FCC Adopts Order and FNPRM Regarding TV White Space" in TLJ Daily E-Mail Alert No. 1,467, October 12, 2006. This item states that initial comments will be due 75 days after publication in the Federal Register, and that reply comments will be due 105 days after. However, this publication has not yet occurred.

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Washington Tech Calendar
New items are highlighted in red.
Tuesday, October 24

The House will not meet. It may return from it elections recess on Monday, November 13, 2006. The adjournment resolution, HConRes 483, provides for returning on Thursday, November 9, at 2:00 PM.

The Senate will not meet. See, HConRes 483.

9:30 AM - 4:30 PM. Day two of a five day meeting of the U.S.-China Economic and Security Review Commission to conduct a final review of its 2006 annual report to the Congress. The agenda includes discussion of "China's Enforcement of Intellectual Property Rights and Its Production of Counterfeit Goods", "China's Media Control Activities", "The Effect of U.S. and Multilateral Export Controls on China's Military Modernization", and "China's WTO Compliance". See, notice in the Federal Register: October 18, 2006, Vol. 71, No. 201, at Pages 61541-61542. Location: Conference Room 333, Hall of the States, 444 North Capitol Street, NW.

12:00 NOON - 2:00 PM. The Alliance for Public Technology (APT) and the National Caucus and Center on Black Aged (NCBA) will host a brown bag lunch titled "Older Adults, Broadband and the Future of the Internet". The speaker will be Kristin Fabos (SeniorNet). Location: NCBA, Suite 800, 1220 L Street, NW.

6:00 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Fall Reception with the FCC Bureau Chiefs". See, registration form [PDF]. The price to attend ranges from $15 to $100. Location: J.W. Marriott Hotel, 1331 Pennsylvania Ave., NW.

6:00 - 8:15 PM. The DC Bar Association's Intellectual Property Law Section, and other Sections, will host a continuing legal education (CLE) seminar titled "Estate Planning for Artists, Authors and Collectors". The speakers will include Janet Fries (Drinker Biddle & Reath) and Ann Garfinkle (Whiteford Taylor & Preston). The price to attend ranges from $90 to $135. For more information, call 202-626-3488. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

TIME? Federal Aviation Administration's (FAA) Commercial Space Transportation Advisory Committee's (COMSTAC) Working Groups on Technology and Innovation, Reusable Launch Vehicle, Risk Management, and Launch Operations and Support will meet. See, notice in the Federal Register, September 15, 2006, Vol. 71, No. 179, at Page 54550. Location: undisclosed.

Deadline to submit comments to the Federal Communications Commission (FCC) in response to its Public Notice [9 pages in PDF] of October 13, 2006, and public notice [7 pages in PDF] of September 16, regarding the merger of AT&T and BellSouth. This proceeding is WC Docket No. 06-74.

Wednesday, October 25

9:30 AM - 4:30 PM. Day three of a five day meeting of the U.S.-China Economic and Security Review Commission to conduct a final review of its 2006 annual report to the Congress. The agenda includes discussion of "China's Enforcement of Intellectual Property Rights and Its Production of Counterfeit Goods", "China's Media Control Activities", "The Effect of U.S. and Multilateral Export Controls on China's Military Modernization", and "China's WTO Compliance". See, notice in the Federal Register: October 18, 2006, Vol. 71, No. 201, at Pages 61541-61542. Location: Conference Room 385, Hall of the States, 444 North Capitol Street, NW.

8:00 AM. The Federal Aviation Administration's (FAA) Commercial Space Transportation Advisory Committee (COMSTAC) will meet. See, agenda [MS Word] and notice in the Federal Register, September 15, 2006, Vol. 71, No. 179, at Page 54550. Location: FAA, Headquarters Building, Bessie Coleman Conference Center, 2nd floor, 800 Independence Ave., SW.

10:00 AM. The Consumer Electronics Association (CEA), Public Knowledge (PK), Media Access Project (MAP) will host a news conference to launch a "Digital Freedom Campaign". The speakers will include Gary Shapiro (CEA), Gigi Sohn (PK), and Harold Feld (MAP). For more information, contact Jennifer Stoltz at 202-448-3145 or jstoltz at qorvis dot com. Location: National Press Club, Main Ballroom, 13th Floor, 529 14th Street, NW.

POSTPONED. 10:00 AM. The Federal Communications Commission's (FCC) Technological Advisory Council will hold a meeting. The agenda includes presentations regarding, and discussions of, fiber to the home initiatives, CATV broadband initiatives, broadband over powerline, WiMAX and WiBRO, GSM and WiFi crossover, spectrum observatory, and propagation characteristics -- HF through microwave. See, FCC public notice [PDF] and notice in the Federal Register, October 19, 2006, Vol. 71, No. 202, at Page 61774. Location: FCC, Commission Meeting Room, TW-C305 at 445 12th St., SW.

2:30 - 3:30 PM. The Broadcasting Board of Governors will hold a closed meeting. See, notice in the Federal Register, October 24, 2006, Vol. 71, No. 205, at Page 62247. Location: Cohen Building, Room 3321, 330 Independence Ave., SW.

6:00 - 8:15 PM. The DC Bar Association will host a continuing legal education (CLE) seminar titled "Export Controls and Economic Sanctions Recent Developments and Current Issues". The speakers will include Thomas Scott (Weadon & Associates) and Carol Kalinoski (Kalinoski & Associates). The price to attend ranges from $90-$135. For more information, call 202-626-3488. See, notice and notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

Deadline to submit initial comments to the Federal Communications Commission (FCC) regarding the intercarrier compensation reform plan known at the Missoula Plan. This proceeding is titled "Developing a Unified Intercarrier Compensation Regime" and numbered CC Docket No. 01-92. See, notice in the Federal Register: September 13, 2006, Vol. 71, No. 177, at Pages 54008-54009.

Thursday, October 26

9:30 AM - 12:00 PM. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) will hold another of their series of hearings on single-firm conduct. This hearing is titled "Understanding Single-Firm Behavior: Business History Session". The speakers will include Tony Allan Freyer (University of Alabama School of Law), Louis Galambos (Johns Hopkins University), James May (American University law school), and George David Smith (NYU Stern School of Business). See, notice. Location: FTC Headquarters Building, Room 532, 600 Pennsylvania Ave., NW.

9:30 AM - 4:30 PM. Day four of a five day meeting of the U.S.-China Economic and Security Review Commission to conduct a final review of its 2006 annual report to the Congress. The agenda includes discussion of "China's Enforcement of Intellectual Property Rights and Its Production of Counterfeit Goods", "China's Media Control Activities", "The Effect of U.S. and Multilateral Export Controls on China's Military Modernization", and "China's WTO Compliance". See, notice in the Federal Register: October 18, 2006, Vol. 71, No. 201, at Pages 61541-61542. Location: Conference Room 385, Hall of the States, 444 North Capitol Street, NW.

12:15 PM. The Federal Communications Bar Association's (FCBA) Wireless Telecommunications Practice Committee will host a lunch titled "Meet the FCC Wireless Advisors". The speakers will be Fred Campbell (office of FCC Chairman Kevin Martin), Barry Ohlson (office of Jonathan Adelstein), Bruce Gottlieb (office of Michael Copps), Aaron Goldberger (office of Deborah Tate), and Angela Giancarlo (office of Robert McDowell). See, registration form [PDF]. The price to attend is $15. Registrations are due by 12:00 NOON on October 24. Location: Latham & Watkins, 555 11th St., NW, 10th floor.

1:30 - 4:00 PM. The Department of Justice's (DOJ) Antitrust Division and the Federal Trade Commission (FTC) will hold another of their series of hearings on single-firm conduct. This hearing is titled "Understanding Single-Firm Behavior: Business Strategy Session". The speakers will include Jeffrey McCrea (Intel), David Reibstein (Wharton School, University of Pennsylvania), David Scheffman (LECG LLC), and George David Smith (NYU Stern School of Business). See, notice. Location: FTC Headquarters Building, Room 532, 600 Pennsylvania Ave., NW.

Deadline to register for the Department of Justice's (DOJ) Global Justice Information Sharing Initiative Federal Advisory Committee meeting on November 2, 2006. See, notice in the Federal Register, October 23, 2006, Vol. 71, No. 204, at Page 62122.

Friday, October 27

9:30 AM - 4:30 PM. Day five of a five day meeting of the U.S.-China Economic and Security Review Commission to conduct a final review of its 2006 annual report to the Congress. The agenda includes discussion of "China's Enforcement of Intellectual Property Rights and Its Production of Counterfeit Goods", "China's Media Control Activities", "The Effect of U.S. and Multilateral Export Controls on China's Military Modernization", and "China's WTO Compliance". See, notice in the Federal Register: October 18, 2006, Vol. 71, No. 201, at Pages 61541-61542. Location: Conference Room 385, Hall of the States, 444 North Capitol Street, NW.

5:00 PM. Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division regarding its Draft Special Publication 800-98 [126 pages in PDF], titled "Guidance for Securing Radio Frequency Identification (RFID) Systems".

Extended deadline to submit applications to the Department of Commerce's (DOC) International Trade Administration (ITA) to participate in the summit portion of its Business Development Mission to India on November 29-30, 2006. See, notice in the Federal Register: October 2, 2006, Vol. 71, No. 190, at Pages 57923.

Deadline to submit comments to the Small Business Administration (SBA) in response to its proposal to grant a request for a waiver of the nonmanufacturer rule for personal computer manufacturing. See, notice in the Federal Register, October 12, 2006, Vol. 71, No. 197, at Pages 60220-60221.

Monday, October 30

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division regarding its Draft Special Publication 800-95 [140 pages in PDF], titled "Guide to Secure Web Services".

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to it notice of proposed rulemaking (NPRM) regarding compensation of providers of telecommunications relay services (TRS) from the Interstate TRS Fund. The FCC adopted this item on July 13, 2006, and released it on July 20, 2006. It is FCC 06-106. This proceeding is titled "Telecommunications Relay Services and Speech-to-Speech Services for Individuals With Hearing and Speech Disabilities" and numbered CG Docket No. 03-123. See, notice in the Federal Register, September 13, 2006, Vol. 71, No. 177, at Pages 54009-54017.

Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding the implications for U.S. trade in goods and services of the anticipated enlargement of the European Union (EU) to include Bulgaria and Romania. See, notice in the Federal Register, September 29, 2006, Vol. 71, No. 189, at Pages 57585-57586.

Tuesday, October 31

8:30 AM - 1:00 PM. The Department of Health and Human Services' (DHHS) advisory committee titled "American Health Information Community" will meet. The agenda includes a discussion of the Health Information Technology Standards Panel's standards recommendations. See, notice in the Federal Register, October 12, 2006, Vol. 71, No. 197, at Page 60152. Location: Conference Room 800, Humphrey Building, 200 Independence Ave., SW.

10:00 AM - 5:00 PM. The National Science Foundation's (NSF) Advisory Committee for Cyberinfrastructure will meet. See, notice in the Federal Register, October 17, 2006, Vol. 71, No. 200, at Page 61073. Location: NSF, 4201 Wilson Blvd., Room 375, Arlington, VA.

12:15 - 1:45 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will a brown bag lunch for the volunteers for the FCBA's November 16 auction. For more information, contact fcbavolunteers06 at gmail dot com, Josh Turner at jturner at wrf dot com or 202-719-4807, Katrina Gleber at kgleber at lsl-law dot com or 202-416-1093, or Christina Langlois at clanglois at nualumni dot com or 703-597-2265. Location: Wiley Rein & Fielding, 1776 K Street, NW.

9:30 AM. The U.S. Court of Appeals (DCCir) will hold an en banc rehearing in Rep. John Boehner v. Rep. Jim McDermott, App. Ct. No. 04-7203. See, March 28, 2006, opinion [23 pages in PDF] of the three judge panel of the Court of Appeals, and story titled "Court of Appeals Holds that Rep. McDermott Violated Wiretap Act" in TLJ Daily E-Mail Alert No. 1,339, March 30, 2006. Location: Courtroom 20, 333 Constitution Ave., NW..