August 2012

4th Circuit Adopts Narrow Construction of CFAA

Does an employee act “without authorization” or “exceed authorized access” under the Computer Fraud and Abuse Act, 18 USC § 1030, by accessing  computers with a username and password provided by an employer, albeit in a manner against the employer’s policies and/or interests?  The Fourth Circuit has joined other courts taking a narrow view of the CFAA, holding that the statute does not give rise to a cause of action in such circumstances.  WEC Carolina Energy Solutions, Inc. v. Miller, 687 F.3d 199 (4th Cir. July 26, 2012). Mike Miller, before resigning his employment from the plaintiff, WEC, allegedly obtained proprietary information that he subsequently used to successfully win business on behalf of Arc Energy Solutions, WEC’s competitor.  Miller and his assistant, Kelly, allegedly downloaded documents and emailed them to personal email addresses.  The downloading was accomplished via user accounts that WEC had provided to Miller and Kelly.  The District Court held that this conduct could not be the basis for a CFAA claim. As the Fourth Circuit noted, and as a review of CFAA cases discussed on this blog amply illustrates, the circuits (and the district courts) have been split on the issue of whether an employee using an… Read More »4th Circuit Adopts Narrow Construction of CFAA

Are Webpages “Published” Under U.S. Copyright Law?

Allegedly infringed webpages were held not to be “publications” under U.S. copyright law.  Rogers v. The Better Business Bureau of Metropolitan Houston, Inc., No. H-10-3741 (Aug. 15, 2012).  The plaintiff had described the webpages as unpublished when applying for copyright registrations.  The defendant argued that the webpages were published, and that the copyright registrations were therefore invalid.  Although acknowledging a split in authority concerning whether web pages are publications, the court rejected the defendant’s argument, and denied the defendant’s motion for partial summary judgment. The plaintiff had contracted with the defendant to create webpages for its individual member businesses.  Further, the plaintiff agreed “to create a website at the uniform resource locator (‘URL’) reliabilitymall.com for hosting the webpages, to license the URL to Defendant, and to maintain the URL and webpages.” After the defendant exercised its right to terminate the parties’ agreement, and before bringing the lawsuit, the plaintiff “applied for a certificate of copyright registration for www.reliabilitymall.com as an unpublished, nondramatic literary work,” which registration subsequently issued.  The plaintiff later applied to the Copyright Office for a “supplementary registration to add the words ‘Web Page Collection’ to the title of the work and to add information about the nature… Read More »Are Webpages “Published” Under U.S. Copyright Law?

Telephone Transaction Data Claims Not Patent-Eligible

Claims directed to storing transaction data captured via a telephone are invalid under 35 U.S.C. § 101, says a Delaware District Court.  Cyberfone Sys. LLC v. Cellco Partnership, Civ. Nos. 11-827-SLR, 11-829-SLR, 11-831-SLR (D. Del. Aug. 16, 2012).  Accordingly, the court granted summary judgment of invalidity in favor of the defendants concerning U.S. Patent No. 8,019,060.  Representative claim 1 from the ‘060 patent is reproduced at the end of this post. The plaintiff argued that the question of Section 101 invalidity could not be decided until claim construction had been performed. The Federal Circuit has noted that claim construction often will be a prerequisite, but not an “inviolable prerequisite,” to the patent-eligibility analysis.  Here, the plaintiff gave no explanation as to how claim construction might change the analysis. Therefore, the court proceeded without claim construction. The plaintiff further argued that the claims met the machine-or-transformation test because data was allegedly being transformed, and because the telephone recited in the claims allegedly was a specific machine.  To analyze this argument, the court broke claim 1 into its component parts, i.e., three recited steps.  The transformation prong was not met because transforming data does not affect any physical object.  The machine prong… Read More »Telephone Transaction Data Claims Not Patent-Eligible

Functional Language Renders Claims Indefinite

Patent claims broadly reciting functions of a “controller” are indefinite under 35 U.S.C. § 112, second paragraph, according to the court in Markem-Imaje Corp. v. Zipher, Ltd., Civil No. 07-cv-00006-PB (D. N.H. Aug. 9, 2012).  The court therefore granted accused infringer Markem’s motion for summary judgment of invalidity. A representative patent claim recited a tape drive having two motors and a controller, the court emphasizing language at issue describing functional capabilities of the controller as follows: wherein the controller energizes both said motors to drive the spools in a tape transport direction, and said controller calculates a length of tape to be added to or subtracted from tape extending between said spools in order to maintain tension in said tape between predetermined limit values and controls said motors to drive the spools to add or subtract the calculated length of tape to or from the tape extending between said spools. Markem argued that functional language was indefinite where it recited a claim’s point of novelty.  However, the court explained that U.S. Supreme Court precedent to that effect had been overruled by the 1952 Patent Act, and specifically by the means-plus-function provision of Section 112, sixth paragraph.  Further, the Federal Circuit has… Read More »Functional Language Renders Claims Indefinite

The America Invents Act for Non-Patent Lawyers

The America Invents Act, as every patent lawyer knows, makes significant changes to the practice of patent law in the United States.  Especially if you are not a patent lawyer, you may find helpful my recent article,  “Some Basics of the America Invents Act for Non-Patent Lawyers,” published in the August 2012 issue of the Michigan Bar Journal.  In this article, I cover various new features of U.S. patent law implemented by the AIA, including the new first-to-file regime, which is less straightforward than it might be.  I also discuss new procedures for post-grant review, as well as other facets of the law of interest to anyone dealing with technology issues.  

Claims for Vicarious Liability for Direct Patent Infringement Dismissed (But Claims for Direct Infringement Were Adequately Pled)

Allegations that the popular Slingbox device directly infringes two patents satisfied Form 18 of the Federal Rules of Civil Procedure, and thus survived a motion to dismiss.  Joao Control and Monitoring Systems of California LLC v. Sling Media Inc., No. C-11-6277 EMC (N.D. Cal. Aug. 7, 2012).  However, the plaintiff’s allegations that Sling Media was liable for vicariously directly infringing the patents did not establish that Sling directed and controlled its customers’ alleged infringement.  Therefore, the plaintiff’s claims of Sling’s vicarious liability were dismissed. In addressing claims of direct infringement, the court cited the recent Federal Circuit decision in In re Bill of Lading Transmission Processing and System Patent Litigation, which held that a complaint alleging direct patent infringement was sufficiently pled where it included the elements in Form 18 attached to the Federal Rules.  Although noting that technically it did not need to follow Bill of Lading because that case applied Sixth Circuit law, the court acknowledged that, as a practical matter, Bill of Lading was controlling. Sling argued that the plaintiff’s allegations of direct infringement were insufficient because each of the patent claims required a personal computer, a device that Sling did not make, use, or sell.  The… Read More »Claims for Vicarious Liability for Direct Patent Infringement Dismissed (But Claims for Direct Infringement Were Adequately Pled)

Medical Method Claims Recite Patentable Subject Matter, Prometheus Notwithstanding

Patent claims directed to a method for choosing an immunization schedule recite patentable subject matter even in light of the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Labs, 132 S. Ct. 1289 (2012), according to the District Court in Classen Immunotherapies, Inc. v. Biogen Idec, No. WDQ-04-2607 (D. Md. Aug. 9, 2012).  The District Court had previously declined to consider the issue of patentability on a motion to dismiss for failure to state a claim, and had stated that additional briefing in light of the Prometheus decision would not be helpful.  However, in this opinion, the court agreed to reconsider its earlier decision, which it then upheld. Although the patents at issue in this case were in the medical field, the decision here is clearly of interest to those of us who practice in the software arena.  In discussing 35 U.S.C. § 101, the court acknowledged that an abstract idea was not made patentable by the addition of “token post-solution components.”  However, the court distinguished Classen’s claims from the claims at issue in Prometheus.  There, test results within a certain range indicated a recommended dosage level of a drug, but the claims recited no more than reaching a… Read More »Medical Method Claims Recite Patentable Subject Matter, Prometheus Notwithstanding

Software Can Be a “Good” under the California UCC

Sale of a software license constituted sale of a “good” for purposes of applying the California UCC.  Gross v. Symantec Corp., No. C 12-00154 CRB (N.D. Cal. July 31, 2012).  A putative class action plaintiff sued Symantec, alleging that a free trial for its software “was essentially a scam, and that the software does not increase security.”  Among other causes of action, the plaintiff alleged a breach of the express warranties set forth in the California Uniform Commercial Code, Cal. Com. Code § 2312. The court held that, in California, the UCC applied to this type of software transaction, and UCC warranties could govern the license. Symantec argued that the California UCC “only covers the sale of goods, which excludes licenses for the use of intellectual property, like Symantec’s software.”  Citing RRX Indus., Inc. v. Lab-Con, Inc., 772 F.2d 543, 546 (9th Cir. 1985), the court acknowledged that “[s]oftware transactions often straddle the line between goods and services, so courts look to the ‘essence of the agreement’ to determine how best to characterize the transaction.”  Because software varies depending on consumer needs being met, software contracts are analyzed on a case-by-case basis. The transaction here was similar to a retail… Read More »Software Can Be a “Good” under the California UCC

Are Links on a Social Network Contributory Copyright Infringement?

Because it was not satisfied that a social network, hosting links to copyrighted videos, was a contributory infringer, the Seventh Circuit has vacated a preliminary injunction against the social network.  Flava Works, Inc. v. Gunter, No. 11-3190 (7th Cir. Aug. 2, 2012).  According to Judge Posner’s opinion for the court, even if the defendant, myVidster, knew that its website hosted links to infringing videos, there was no evidence that the defendant facilitated copying constituting copyright infringement.  Therefore, the plaintiff, Flava Works, had not shown a likelihood that it would successfully show that the defendant was a contributory infringer. The Court began its opinion by chastising the District Court for equating the plaintiff’s purported showing of a likelihood of success with a showing of irreparable harm.  Although eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), was a patent case addressing a permanent injunction, the Court found that case to govern here.  However, although “likelihood of success was only one factor for the district judge to consider in deciding whether to grant a preliminary injunction,” it was the only factor the parties had addressed, and the only factor the Court needed to consider here. Flava’s allegedly infringed videos were of a… Read More »Are Links on a Social Network Contributory Copyright Infringement?

Prior Art Publications Are Presumed to Be Enabling

The presumption that a prior art reference is enabled applies to printed publications in addition to patents, the Federal Circuit has explained in In re Antor Media Corp., No. 2011-1465 (Fed. Cir. July 27, 2012).  Further, the Federal Circuit affirmed the Board of Patent Appeals and Interferences and upheld rejections issued in a re-examination of U.S. Patent 5,734,961. The claims of the ‘961 patent related “to a method and apparatus for transmitting information recorded on digital disks from a central server to subscribers via a high data rate telecommunications network.”  Three of the four references used to reject the claims of the ‘961 patent were research publications or journal articles; the fourth was a United States patent.  During re-examination, the patent owner submitted an expert declaration to support an argument that two of the printed publications (“Ghafoor” and “MINOS”) were not enabling. The PTO submitted no rebuttal evidence. The Board found that the patent owner had failed to show that the references were non-enabling, “and had not shown that their performance required undue experimentation.”  The Board then found the majority of the ‘961 patent claims anticipated by Ghafoor, and that most of these were also anticipated by another reference.  The… Read More »Prior Art Publications Are Presumed to Be Enabling