TLJ News from January 16-20, 2013

Web Sites Dedicated to Infringing Activity, One Year After

1/18. One year ago the House and Senate ceased active consideration of two bills related to combating web sites dedicated on infringing activity. Washington DC based groups that lobbied against the bills celebrated at several gatherings. Some identify January 18 as "Internet Freedom Day". On the other hand, at least one proponent of the bills wrote that there was a silver lining in the defeat.

The House Judiciary Committee (HJC) had begun its mark up of the House bill just before Christmas, 2011. It was poised to complete its mark up at the start of the second session of the 112th Congress. However, opponents of the bills waged a very successful grass roots lobbying campaign, inducing individuals to contact their legislators to express opposition.

House bill, sponsored by Rep. Lamar Smith (R-TX), was HR 3261 [LOC | WW], the "Stop Online Piracy Act". It was also know, especially by its opponents, as "SOPA".

The Senate bill, sponsored by Sen. Patrick Leahy (D-VT), was S 968 [LOC | WW], the "Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011". It is also referred to by its proponents as the "PROTECT IP Act", and by its opponents as the "PIPA".

After Representatives' and Senators' offices received torrents of e-mail messages and phone calls voicing opposition, there were no further hearings or mark ups of either bill. No replacement bills were introduced in the 112th Congress. The affected industry sectors engaged in no meaningful negotiations. The opponents effectively succeeded in blocking further consideration.

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release on January 18 that "We are grateful that one year ago today Internet users, along with public interest groups and Internet companies, halted extreme copyright legislation that would have altered and harmed the Internet."

He added that some threats to internet freedom come from "those who want to carve out seemingly well-intended exceptions to Internet freedom in frustrated attempts to fix social ills. We must remain equally vigilant in protecting the Internet from a death by a thousand cuts and direct assault. We must look at all policies impacting the Internet, measure the intended and collateral damage and analyze the costs and benefits carefully."

Berin Szoka, head of the Tech Freedom, stated in a piece on January 18 that "Today we celebrate the Internet's ability to increase freedom and improve the human condition in ways both large and small. We unite in protecting the freedoms that have allowed the Internet to thrive."

Katy Tasker of the Public Knowledge (PK) wrote in a short piece that "With a unified voice, the online community spoke out against legislation that would have crippled the internet in the name of copyright protection." She also asserted that, as a consequence, "Today, copyright reform is a real possibility".

In contrast, on January 14, the Copyright Alliance (CA) published a piece titled "The Silver Lining of the SOPA Debate". The author is the CA's Sandra Aistars.

She wrote that "many who seek to exploit the work of creators without their consent will be looking backwards and celebrating last year's defeat of those bills. So one might expect advocates for artists and creators to be in a dour mood again, but there is ample cause for optimism among members of the creative community."

She asserted that the debate one year ago "raised awareness about the very nature of creativity on the internet", for the better. For example, "Instagram users -- hobbyists and professionals alike -- revolted when a change of terms for the free service allowed Instagram to sell photos commercially without attribution or compensation to the photographer".

She concluded that "The conversation is clearly just beginning, but thoughtful discussion with all of its ebbs and flows will serve us better than the talking points and slogans that dominated the legislative season of 2012". She also wrote that "some of the goals of the legislation have been achieved". That is, credit card companies and PayPal are employing "best practices to reduce sales of counterfeit and pirated goods by cutting off sites that distribute infringing goods from conducting financial transactions through these processors". ISPs are collaborating on the Copyright Alert System. And, Google "started considering whether sites are rogue websites when doing search rankings".

Supreme Court Grants Cert in Cases Involving SLUSA and Law Firms

1/18. The Supreme Court granted certiorari in Chadbourne & Parke v. Troice, Willis of Colorado v. Troice, and Proskauer Rose v. Troice, consolidated cases involving the Securities Litigation Uniform Standards Act (SLUSA) and state class actions against the law firms that represent persons and entities alleged to have defrauded investors. See, January 18 Orders List [PDF].

These are petitions for writ of certiorari to the U.S. Court of Appeals (5thCir), which issued its opinion on March 19, 2012. It is reported at 675 F.3d 503.

These cases are related to Allen Sanford, who is now serving time in prison. See, Department of Justice (DOJ) web page regarding criminal proceedings against Sanford and others.

While Sanford's name is often associated with terms such as "securities fraud" and "ponzi scheme", he was convicted, not of securities fraud, but rather on numerous charges related to wire fraud, mail fraud, money laundering, and obstructing Securities and Exchange Commission (SEC) investigations.

Various plaintiffs' class action lawyers, representing defrauded investors, filed complaints in state courts, alleging violations of state laws, seeking to impose liability on numerous deep pocket defendants, including the law firms of Chadbourne & Parke and Proskauer Rose.

Proskauer represented Stanford International Bank (SIB), which was controlled by Allen Sanford. SIB issued certificates of deposit, which Sanford falsely represented where backed by safe liquid investments. The government alleged that this was part of a ponzi scheme.

These class action lawyers allege that Proskauer engaged in civil conspiracy, and that it aided and abetted the primary violations. However, they did not allege that Proskauer made any misrepresentations directly to the class plaintiffs.

The relevant language of the SLUSA, at 15 U.S.C. § 78bb, provides in part, at subsection (f), that "No covered class action based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging ... a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security ..."

The actions were removed to federal court, and consolidated in the U.S. District Court (NDTex). It held that the SLUSA precluded the class action claims against the law firms. The Court of Appeals reversed. The issue will now be decided by the Supreme Court.

Petitioners argued that the Court of Appeals misconstrued the SLUSA.

Chadbourne also argued that "the Fifth Circuit's decision will lead to absurd results. It will preclude state-law class claims against defendants directly involved in SLUSA-covered securities fraud, but allow such class actions against remote actors. That result is completely backwards, and utterly without basis in the scheme Congress established."

Also, other circuits have ruled in similar cases. Petitioners argued that there is a deep circuit split over the meaning of the SLUSA.

See, full story.

Intellectual Property News

1/18. The U.S. Patent and Trademark Office (USPTO) published a notice in the Federal Register (FR) that announces, describes, recites, and set the effective date for, its rules changes regarding patent fees. See, FR, Vol. 78, No. 13, January 18, 2013, at Pages 4211-4291. The effective date is March 19, 2013. The USPTO wrote these rules to implement Section 10 of HR 1249 [LOC | WW] (112th Congress), the "Leahy-Smith America Invents Act". See also, story titled "USPTO Releases Patent Fees NPRM" in TLJ Daily E-Mail Alert No. 2,441, September 5, 2012.

1/18. The Copyright Office (CO) published a notice in the Federal Register (FR) regarding satellite royalty funds. This notice announces that the Copyright Royalty Judges seek comments, (1) on a motion [8 pages in PDF] of Phase I claimants for partial distribution in connection with the 2011 satellite royalty funds, and (2) as to the existence of Phase I and Phase II controversies with respect to the distribution of 2011 satellite royalty funds. The deadline to submit comments is February 19, 2013. See, FR, Vol. 78, No. 13, January 18, 2013, at Page 4169.

1/18. The Copyright Office (CO) published a notice in the Federal Register (FR) regarding cable royalty funds. This notice announces that the Copyright Royalty Judges seek comments, (1) on a motion [11 pages in PDF] of Phase I claimants for partial distribution in connection with the 2011 cable royalty funds, and (2) as to the existence of Phase I and Phase II controversies with respect to the distribution of 2011 cable royalty funds. The deadline to submit comments is February 19, 2013. See, FR, Vol. 78, No. 13, January 18, 2013, at Pages 4169-4170.

Georgia Tech Paper Examines Use of Technology Standards in the People's Republic of China

1/17. The US China Economic and Security Review Commission (USCESRC) released a paper [55 pages in PDF] titled "The Rise of China in Technology Standards: New Norms in Old Institutions". The authors are Dan Breznitz and Michael Murphree, who work at the Georgia Institute of Technology in Atlanta, Georgia.

They wrote in this paper that "protectionism is not the major focus of Chinese standards development efforts" and "it is not the main challenge China poses for American firms".

This paper finds that "Unique Chinese standards have also generally been market failures. None have gained significant market support outside of China and most have limited success even within China." But, "Development of low cost and potentially competitive standards for similar or identical technology niches pushes foreign standards alliances to lower royalty rates. This has been a great boon to Chinese companies."

They also argued that "The government has pushed for unique standards and so won concessions from foreign IP holders on royalty rates for Chinese firms. As Chinese firms develop their own proprietary intellectual property, they have begun pursuing means of incorporating it into standards. However, rather than seek maximum returns from monetization of their IP through licensing, Chinese firms seek to establish a new norm of low-priced intellectual property."

Federal Circuit Addresses Mootness in Post Settlement Appeals

1/17. The U.S. Court of Appeals (FedCir) issued its opinion [15 pages in PDF] in Allflex v. Avid, a patent case regarding when settlements render subsequent appeals moot.

Allflex filed a complaint in the U.S. District Court (CDCal) against its competitor Avid seeking a declaratory judgment that Avid's patents regarding radio frequency identification (RFID) technology for pet and animals are unenforceable due to inequitable conduct. Avid counterclaimed, alleging infringement of the patents in suit.

Subsequently, the District Court ruled that Avid "should be sanctioned" for failure disclose the existence of reexamination proceedings that were pending with respect to the patents in suit. However, the District Court never got around to actually sanctioning Avid.

Later, the District Court granted summary judgment of non-infringement.

The District Court also granted partial summary judgment in favor of Allflex on its inequitable conduct claim. It held that Avid's failure to disclose information about prior public use and offers to sell one of its products was material for purposes of Allflex's claim of inequitable conduct. However, the District Court also denied summary judgment on the inequitable conduct claim as a whole because there was a genuine issue of fact as to whether Avid's President had the requisite intent to deceive the USPTO.

Allflex and Avid then reached the settlement agreement at the heart of this appeal. Avid agreed to pay $6.55 Million to Allflex. They also agreed that Avid would be free to appeal issues the summary judgment of non-infringement, the finding of materiality as to the undisclosed information about prior public use and offers for sale, the ruling that Avid and its counsel should be sanctioned, and claim constructions. Moreover, they agreed that if Avid were to prevail on appeal, Allflex would pay $50,000 to Avid.

The District Court accepted the settlement, and wrote in its Stipulated Order of Final Judgment, that the above listed issues are "ripe for appellate review".

Avid brought the present appeal. Allflex did not participate. The Court of Appeals ruled as to sanctions that there was no final decision to appeal. Then, it ruled the rest of the appeal moot.

The Court addressed the materiality issue in the inequitable conduct claim. "Avid has not suffered an adverse judgment on Allflex’s inequitable conduct claim because the district court dismissed this case without finding Avid’s patents unenforceable. Regardless of whether this court reverses the materiality ruling, Avid’s patents will remain in force because neither the district court nor the parties contemplate further proceedings on the issue of intent, which would be necessary before the court could enter a judgment on inequitable conduct. Under those circumstances, Avid's disagreement with the court’s ruling on the materiality issue does not give it a right to appeal."

The Court wrote that "The fact that Avid is unhappy with the district court's decision in this case is not enough to breathe life into the case in the absence of a continuing controversy between the parties."

It also held that the settlement provision that Allflex pay $50,000 if Avid prevailed was not sufficient to maintain adversity and controversy. The Court also distinguished two 1982 Supreme Court opinions which held that those cases did not become moot when the parties agreed to stipulated damages depending on the outcome of appeals. See, Nixon v. Fitzgerald, 457 U.S. 731, and Havens Realty Corp. v. Coleman, 455 U.S. 363.

The Court also suggested that a "contrivance invented for the purpose of avoiding a mootness determination", or a "token or arbitrary sum introduced for the purpose of manufacturing a controversy", does not maintain controversy.

The Court also noted that "$50,000 represents less than one percent of the payment included as consideration for the partial settlement", and that $50,00 appears more like a "side bet".

The Court also wrote that "While counsel emphasized the advantages to parties of being able to take appeals after settling their disputes -- usually in an attempt to upset rulings that they fear may have adverse downstream consequences for the would-be appellant -- the consequences for the judicial system are sufficiently detrimental that we believe it is important to avoid creating incentives for one-sided appeals such as this one."

This case is Allflex USA, Inc. v. Avid Identification Systems, Inc., U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2011-1621, an appeal from the U.S. District Court for the Central District of California, D.C. No. 06-CV-1109, Judge Mariana Pfaelzer presiding. Judge Bryson wrote the opinion of the Court of Appeals, in which Judges Clevenger and Lourie joined.

PK/EFF Argue Fair Use in AP v. Meltwater

1/17. The Public Knowledge (PK) and Electronic Frontier Foundation (EFF) filed an amicus curiae brief [16 pages in PDF] with the U.S. District Court (SDNY) in AP v. Meltwater in support of the defendants' opposition to the Associated Press's (AP) motion for summary judgment.

The AP filed its complaint on February 14, 2012 alleging copyright infringement and hot news misappropriation by Meltwater.

The AP hires at great expense an army of reporters who engage in the labor intensive and time consuming process of collecting, researching, writing, and editing news stories. It licenses its works for fees. Meltwater does not license from AP. Rather it copies excerpts from AP's works, and sells its product to its own subscribers. The key issue is whether Meltwater's free riding is protected fair use.

The complaint states that "Meltwater has built its business on the willful exploitation and copying of the AP's and other publisher's news articles for profit. Meltwater styles itself a modern day commercial clipping service. Through its Meltwater News service, Meltwater copies and delivers to paying customers substantial infringing excerpts from AP stories and other published news stories, based on keywords selected by the subscriber. Meltwater then offers its customers the ability to store these excerpts and event full text articles in a customer archive housed on Meltwater's server and to further distribute these materials."

The AP complaint adds that "Meltwater thus provides a directly competing product for many AP subscribers, including government agencies and others that use the AP wire to monitor the news for breaking developments. AP bears all of the extensive costs associated with creating its content, while Meltwater bears only the minimal costs of distribution in the Internet age, and thus can undercut the AP with lower subscription rates."

The AP stated in a release that "The UK Court of Appeal and a Norway court have already issued decisions holding that the content delivered by Meltwater requires a license under those countries’ governing copyright laws. But, in contrast to many other news outlets and news aggregators that deliver AP news reports to the public (including Yahoo News, Google News and AOL, which all have licenses for AP content), Meltwater does not. It refuses to license the content that it delivers to its customers." (Parentheses in original.)

 17 U.S.C. § 107 provides the four prong statutory test for the fair use defense. It provides, in full, that,

"Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--
   (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
   (2) the nature of the copyrighted work;
   (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
   (4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."

The PK and EFF argue in their January 17 brief that "The Associated Press asks this Court to accept a woefully cramped view of fair use (and, in particular, of the first and third statutory factors) that is unsupported by Supreme Court and Second Circuit precedent. If adopted by this or any other court, this view would sharply curtail the essential role fair use plays in facilitating online innovation and expression, restricting the use and development of services that allow users to find, organize and share public information, services that depend on making intermediate copies, and even personal consumer uses such as time-shifting." (Parentheses in original.)

The PK's Sherwin Siy stated in a release that "While many people associate fair use with parodies, mashups, and remixes, even unadulterated copies can be fair uses. Fair use exists to promote scholarship, research, and news reporting, among many other things, and both the statute and the case law clearly allow for this sort of notification, quotation, and excerpting. Arguing that fair uses have to embody new expression contradicts the laws that allow modern technologies like search engines to operate."

This case is Associated Press v. Meltwater U.S. Holdings, Inc., et al., U.S. District Court for the Southern District of New York, D.C. 2:12-cv-1087-DLC-FM. The AP is represented by the law firm of Davis Wright Tremaine.

DHHS Releases Amendments to HIPAA Privacy Rules

1/17. The Department of Health and Human Services (DHHS) released a notice [563 pages in PDF], to be published in the Federal Register (FR) on January 25, 2013, that announces, describes and recites amendments to its rules that implement the privacy and security provisions of the Health Insurance Portability and Accountability Act (HIPAA).

Leon Rodriquez of the DHHS stated in a release that "This final omnibus rule marks the most sweeping changes to the HIPAA Privacy and Security Rules since they were first implemented".

Rep. Henry Waxman (D-CA) stated in a release that "The final privacy rule issued by HHS yesterday was a long time in coming, but it was worth the wait. This final rule puts people more in control of their personal health information. Given the ever changing world of technology and health care, I am pleased that Secretary Sebelius has taken this pro-patient and pro-privacy stance."

These rules changes take effect on March 26, 2013.

Can We Talk?

1/17. The U.S. Court of Appeals (7thCir) issued its opinion in Bogie v. Rosenberg, an invasion of privacy and misappropriation of image case in the federal courts under diversity jurisdiction.

Joan Rosenberg, who is better known as comedian Joan Rivers, and others published a film [Amazon] in 2010 titled "Joan Rivers: A Piece of Work" that included a 16 second conversation between the plaintiff, Ann Bogie, and Rivers about the nature of comedy, without license from Bogie.

The District Court dismissed the complaint. The Court of Appeals affirmed. It applied Wisconsin law. It held that there was no invasion of privacy because Bogie had no reasonable expectation of privacy, and because the segment was not highly offensive. Bogie had approached Rivers in the presence of others, and a camera.

The Court of Appeals also held that there was no misappropriation on the dual grounds that the segment fell under the incidental use exception, and the newsworthiness or public interest exception.

This case is Ann Bogie v. Joan Alexandra Molinsky Sanger Rosenberg, et al., U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 12-1923, an appeal from the U.S. District Court for the Western District of Wisconsin, D.C. No. 11-cv-0324, Judge William Conley presiding. Judge Hamilton wrote the opinion of the Court of Appeals, in which Judges Bauer and Flaum joined.

More News

1/17. The Federal Trade Commission (FTC) published a notice in the Federal Register (FR) that contains its new COPPA rules. The effective date is July 1, 2013. See, FR, Vol. 78, No. 12, January 17, 2013, at Pages 3971-4014. See also, story titled "FTC Releases Expanded COPPA Rules" in TLJ Daily E-Mail Alert No. 2,494, December 19, 2012.

Strickling Praises NTIA BTOP Grants

1/16. Lawrence Strickling, head of the National Telecommunications and Information Administration (NTIA), gave a speech in Washington DC in which he praised the NTIA's Broadband Technology Opportunities Program (BTOP). He asserted that it "has been very successful".

Lawrence StricklingStrickling (at right) stated that the projects funded by the BTOP "have the potential to reshape our nation just as did the Rural Electrification Administration did nearly 80 years ago". He argued that "Now, as back then, there is a group of Americans being left behind as technology advances without them."

He also said that funded projects have "created thousands of jobs" and are driving digital literacy.

HR 1 [ LOC | WW], the huge and wasteful spending bill passed by the 111th Congress in February of 2009, provided $7.2 Billion to the NTIA and Rural Utilities Service (RUS) for the purpose of promoting broadband.

The bill provided $4.7 Billion for NTIA to create the BTOP to manage competitive grants to entities for broadband infrastructure, public computer centers, and projects to stimulate consumer demand for, and adoption of, broadband.

HR 1 was also titled "American Reinvestment and Recovery Act".

Most of Strickling's speech consisted of anecdotes about various projects funded by the NTIA's BTOP.

11th Circuit Addresses FTC Remedies for Deceptive Marketing

1/16. The U.S. Court of Appeals (11thCir) issued its opinion [7 pages in PDF] in FTC v. Washington Data Resources, a case regarding remedies available for violation of Section 5 of the FTC Act, which is codified at 15 U.S.C. § 45.

The Federal Trade Commission (FTC) filed a complaint in November of 2009 in the U.S. District Court (MDFl) against the defendants alleging violation of Section 5 in connection with their deceptive activities relating to the sale and marketing of mortgage relief and home foreclosure services.

The District Court issued an opinion, order and judgment against the individual defendants who are appellants in this appeal in April, June and July of  2012. It calculated damages based on the net revenue, rather than the profits, they received during the time they controlled the offending enterprise. They brought the present appeal.

The Court of Appeals affirmed. It cited other circuits that allow the net revenue method. It wrote that "We agree with our sister circuits and today hold that the amount of net revenue (gross receipts minus refunds), rather than the amount of profit (net revenue minus expenses), is the correct measure of unjust gains under section 13(b)." Parentheses in original.) See, Section 13(b) of the FTC Act, which is codified at 15 U.S.C. § 53(b).

This case is FTC v. Washington Data Resources, Inc., Richard A. Bishop, Brent McDaniel, and Tyna Caldwell, U.S. Court of Appeals for the 11th Circuit, App. Ct. No. 12-13392, an appeal from the U.S. District Court for the Middle District of Florida, D.C. Docket No. 8:09-cv-02309-SDM-TBM. The Court of Appeals issued a per curiam opinion of Judges Hull, Wilson and Jordan.

See also, the FTC's web page containing hyperlinks to pleadings in this matter.

Guns, Video Games, Apps, and Video Programming

1/16. President Obama and Vice President Biden gave a joint speech at which they advocated greater regulation of guns and gun transactions. Afterwards, the President signed two memoranda. Most of the legislative proposals and regulatory actions contained in these speeches and memoranda do not relate to information and communications technology (ICT).

However, also at issue are actions that the federal government might take with respect to regulating video games, apps, movies, and the video programming of television broadcasters and other multichannel video programming distributors (MVPDs).

See, full story.

Sen. Leahy Addresses His Tech Agenda for 113th Congress

1/16. Sen. Patrick Leahy (D-VT) gave a speech at Georgetown University law school in which he addressed the agenda for the 113th Congress of the Senate Judiciary Committee (SJC), which he chairs.

"I expect that the Judiciary Committee will devote most of our time this Spring working to pass comprehensive immigration reform." He added that "Next month we will begin this national discussion in the full Senate Judiciary Committee with public hearings."

He said that immigrants "play vital roles ... innovating for our technology companies, or creating businesses of their own". However, he did not mention HR 6429 [LOC | WW], the "STEM Jobs Act of 2012", any other bills that would provide visas to aliens with advanced degrees in science, technology, engineering, or math (STEM) fields, or STEM visas generally.

He also said that the agenda of the SJC includes gun issues, including "how we manage the exposure of children to violence in popular media".

See, story titled "Guns, Video Games, Apps, and Video Programming" in TLJ Daily E-Mail Alert No. 2,509, January 16, 2013.

Sen. Leahy continued that "I am concerned about the growing use of drones by federal and local authorities to spy on Americans here at home. This fast-emerging technology is cheap and could pose a significant threat to the privacy and civil liberties of millions of Americans. It is another example of a fast-changing policy area on which we need to focus to make sure that modern technology is not used to erode Americans' right to privacy, and this will be the subject of hearings this Congress."

He also stated "I will keep pushing to update our privacy laws to address emerging technology and the Internet, including the Electronic Communications Privacy Act and cybersecurity laws."

The SJC passed two ECPA related bills late in the 112th Congress.

First, it approved HR 2471 [LOC | WW | HTML], an untitled bill that, as amended by the SJC, would require a warrant for accessing cloud stored e-mail. See also, story titled "Senate Judiciary Committee Approves Leahy Bill to Require Warrant for Accessing Cloud Stored E-Mail" in TLJ Daily E-Mail Alert No. 2,479, November 30, 2012.

Second, it approved S 1223 [LOC | WW], the "Location Privacy Protection Act of 2011". See, story titled "Senate Judiciary Committee Holds Over Geolocation Data Bill" in TLJ Daily E-Mail Alert No. 2,485, December 7, 2012, and "Capitol Hill News" in TLJ Daily E-Mail Alert No. 2,490, December 14, 2012.

Finally, Sen. Leahy said that "We must also reauthorize the satellite TV license, make books accessible to those with visual disabilities, and create incentives for innovation."

Update on Fox v. Dish

1/16. TLJ last published an article on Fox v. Dish when the U.S. District Court (CDCal) announced its ruling on Fox's motion for a preliminary injunction on November 7, 2012. Subsequently, the District Court released a redacted copy of that opinion. Then, Fox filed an interlocutory appeal with the U.S. Court of Appeals (9thCir), which is pending.

See, story titled "District Court Denies Motion for PI in Dish Hopper Case" in TLJ Daily E-Mail Alert No. 2,470, November 6, 2012.

Also, this week, CNET and others disclosed that in the process of selecting CNET's "Best of CES Awards", it initially picked the Dish Network's digital video recorder know as the "Hopper" as the best. Its "Auto Hop" feature enables users to hop over commercials, much to the alarm of Fox, CBS and other broadcasters.

CNET's Lindsey Turrentine wrote a piece published in CNET on January 14 titled "The 2013 Best of CES Awards: CNET's story: The true story of what happened before last week's Best of CES Awards unveiling".

She wrote that "Last week, about 40 members of the CNET editorial staff met in the CNET trailer in the parking lot of the Las Vegas Convention Center to vote on our official Best of CES winner", and "we chose the Dish Hopper for our Best of CES award". But, she continued, before CNET publicly announced this, CBS, owner of CNET, instructed them not to give the Dish Hopper the award.

Technology journalists have authored a large number of news stories, blogs and tweets since condemning CBS for interfering with journalistic independence, and CNET for submitting to such interference.

Turrentine wrote that "The conflict of interest was real".

Another conflict of interest should also be noted. News publications compete for subscription and advertising revenue. The many news media that have been criticizing CBS and CNET also stand to benefit from tarnishing the reputations of those entities.

Fox, ABC, CBS, and NBC filed complaints in May of 2012 alleging direct copyright infringement by the Dish Network. See for example, Fox's complaint, filed on May 24, 2012. See also, CBS's complaint.

The Fox complaint alleges that broadcasters licensed Dish to retransmit primetime network programming, but that Dish "launched it own bootleg broadcast video-on-demand service called PrimeTime Anytime that is available to top-tier DISH subscribers who lease the Hopper set top box from DISH. Once enabled, PrimeTime Anywhere makes an unauthorized copy of the entire primetime broadcast schedule for all four" networks. And, Dish operates this service "so that the copies it makes are viewable commercial free".

The District Court's November 7, 2012 opinion, titled "Order Re Plaintiff's Motion for Preliminary Injunction", released on November 12, denied Fox request for a preliminary injunction.

However, the District Court also wrote that Dish directly infringed Fox's exclusive right of reproduction. Moreover, it rejected, after a lengthy analysis, Dish's fair use defense. That is, so far, Fox has won on the issue of liability, but has lost as to its choice of remedy. The District Court's denial of preliminary injunctive relief was based in part on the adequacy of monetary relief. Even without overturning the denial of injunctive relief, Fox stands to recover considerable financial damages.

For a more detailed summary of the District Court's November ruling, see related story in this issue titled "District Court's Legal Analysis in Fox v. Dish".

Fox filed an interlocutory appeal with the Court of Appeals, which is pending.

CNET's initial decision to name the Dish Hopper as the "Best of CES" implied a recommendation to consumers that they subscribe to a service, acquire the DVR, and invest time in learning how to use these. At any time the courts might reverse, issue an injunction, thereby rendering consumers' decisions to select the Dish service a waste of time and money.

Also, CNET's initial award demonstrated a disrespect for the Congress, the judiciary, and law. The US is a nation committed to the rule of law. The elected Congress has enacted copyright laws. While various litigation parties dispute whether the Dish Hopper violates this copyright law, Article III courts have exclusive jurisdiction over such cases and controversies. Moreover, one such court is presiding over several cases.

Many tech journalists have confidently opined that the Dish Hopper service is legal. Yet, under the US legal system, it is emphatically the province and duty of the judicial department to say what the law is. And, the one court that has spoken, has determined that the Dish infringes copyright.

Of course, the broadcasters and Dish might settle. Or, the courts might ultimately hold that the Dish Hopper does not violate copyright.

But, until then, the law of the case is that Dish has infringed Fox's copyrights. CNET was poised to give a grand award to a copyright infringing company.

People and Appointments

1/16. President Obama announced his intent to nominate Vinton Cerf to be a member of the National Science Foundation's (NSF) National Science Board. See, White House news office release.

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1/16. The U.S. Court of Appeals (DCCir) issued its Judgment [2 pages in PDF] in InContact v. FCC, denying without opinion a petition for review of a Federal Communications Commission (FCC) order denying an application for review of an FCC Wireline Competition Bureau (WCB) universal service tax invoice. InContact filed its application late. See also, FCC brief, filed on September 11, 2012. This case is InContact, Inc. v. FCC and USA, U.S. Court of Appeals for the District of Columbia Circuit, App. Ct. No. 12-1133, a petition for review of a final order of the FCC. The three judge panel was comprised of Judges Garland, Griffith and Randolph.

1/16. The U.S. Court of Appeals (FedCir) issued its opinion [25 pages in PDF] in Parallel Networks v. Abercrombie & Fitch, a patent infringement case. Parallel Networks is the owner of U.S. Patent No. 6,446,111 titled "Method and Apparatus for Client-Server Communication Using a Limited Capability Client Over a Low-Speed Communications Link". It filed four complaints in the U.S. District Court (EDTex) against 120 defendants, including Abercrombie & Fitch, that operate web sites that provide applets in response to user requests in a manner that Parallel Networks alleged infringe its patent in suit. The District Court construed claims, granted motions for summary judgment of non-infringement, and denied a FRCP Rule 59 motion for leave to amend its infringement contentions. This appeal followed. The Court of Appeals affirmed. This case is Parallel Networks LLC v. Abercrombie & Fitch, U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2012-1227, an appeal from the U.S. District Court for the Eastern District of Texas, D.C. No. 12-CV-0018, Judge Leonard Davis presiding. Judge Bryson wrote the opinion of the Court of Appeals, in which Judges Prost and Wallace joined.

Go to News from January 11-15, 2013.