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Intellectual Property

Obama Administration to the Supremes: Judges Should Defer to U.S. Patent and Trademark Office Expertise

WASHINGTON, March 21, 2011 — The Obama Administration told the U.S. Supreme Court on Friday that federal judges should trust the procedures undertaken at the United States Patent and Trademark Office to ensure that any patents that they approve are valid, and thus uphold a strict legal standard that is currently used by juries to decide whether a piece of key evidence presented during litigation is sufficient to invalidate disputed patents.

The case pits technology giant Microsoft against i4i Limited Partnership, a small consulting company in Toronto, Canada.



WASHINGTON, March 21, 2011 — The Obama Administration told the U.S. Supreme Court on Friday that federal judges should trust the procedures undertaken at the United States Patent and Trademark Office to ensure that any patents that they approve are valid, and thus uphold a strict legal standard that is currently used by juries to decide whether a piece of key evidence presented during litigation is sufficient to invalidate disputed patents.

The administration’s argument is particularly noteworthy on several counts. The USPTO has come under fire in recent years for granting patents of questionable quality as it strains to keep up with the workload imposed by an explosion of increasingly complex applications.

The Obama Administration has made improving the situation at the patent office a centerpiece of its effort to modernize the U.S. economy, and to create high-value jobs. It’s been vigorously lobbying congress and public opinion to enact a sweeping patent reform package that would give the USPTO the resources its advocates say it needs to improve its performance.

The case pits technology giant Microsoft against i4i Limited Partnership, a small consulting company in Toronto, Canada. The consulting company owns a patent to a specific configuration  for editing custom XML, a computer mark-up language, and it sued Microsoft for patent infringement in 2007 for selling a version of its Word processing program that incorporated the ability to edit custom XML without licensing it.

A sign of how big of a financial impact the Supreme Court’s decision in this case could have on the economy is the eye-opening range of entities that have chipped in with their opinions.

Household brand names from every corner of the business world — from pharmaceuticals, technology, finance, retailing, to autos, and their industry trade groups — as well as public interest groups have weighed in with their opinions.

As of Friday, 22 friend-of-the-court briefs were filed with the court against Microsoft, and on the same side as i4i and the Obama Administration.

Opinions are all over the map, with many venture funds, former patent commissioners, technology companies and universities siding with i4i, and many Silicon Valley companies such as Apple, CISCO, Google and Intel (who are often the target of similar suits) siding with Microsoft.

Microsoft had responded to the patent infringement suit by asking the federal district court to find i4i’s patent invalid and unenforceable.

A jury in the federal district court for the Eastern Texas decided in favor of i4i on multiple counts, and Microsoft repeatedly, and unsuccessfully, appealed its decision.

Microsoft didn’t give up. The Justices of the Supreme Court agreed in September to hear company’s appeal of the Federal Circuit’s 2009 affirmation of the district court’s decision. Chief Justice Roberts, an expert in business law, is recused from the case.

Microsoft argues that the legal standard for considering evidence to invalidate a patent during litigation is too high.

The current standard juries are instructed to use when they have to decide whether a piece of evidence renders a patent invalid or not is “clear-and-convincing,” which is higher than a preponderance of the evidence — the legal standard for evidence considered in all other civil litigation.

This standard, established by the Federal Circuit,  is even more ironic in this particular case because the consultants destroyed the source code before they filed for the patent, so Microsoft has nothing other than individual testimonies to prove its contention that i4i and Information Infrastructures sold a version of its patented product more than a year before it filed for a patent. The USPTO does not grant patents on ideas that have been sold or used for a year before an application.

As Microsoft’s lawyers put it in their legal brief on the case to the Supremes:

“Yet because i4i had destroyed the source code for the software before filing its  action against Microsoft, i4i’s technical expert and counsel were able to stress to the jury repeatedly that Microsoft could not prove by clear and convincing evidence that the software embodied the patented invention.”

Microsoft is also arguing that the legal standard shouldn’t be applied to evidence used to prove that a patent is invalid during litigation if that evidence was never considered by the USPTO examiner when granting the patent.

“Where an agency has failed to address the relevant evidence or issue, no deference could even conceivably be warranted,” argued Microsoft’s lawyers Matthew Powers of Weil, Gotshal & Manges, former Attorney General Ted Olson and his colleagues at Gibson, Dunn & Crutcher and Microsoft’s in-house counsel. “The Federal Circuit accordingly erred when it affirmed the district court’s application of a clear-and-convincing-evidence standard to Microsoft’s onsale-bar defense, which (it is undisputed) the PTO never considered because the patent applicants did not disclose their own prior-art software.”

The Obama Administration argued in a filing with the Supreme Court of Friday that changing the standard would undercut patent examiners’ authority.

“A contention that a patent is invalid is in essence a collateral attack on the PTO’s prior administrative action, and it therefore implicates principles of deference to agency authority and expertise,” wrote Bernard J. Knight, the USPTO’s general counsel, his colleagues at the agency, and Neal Kumar Katyal, the acting solicitor general, Tony West, assistant attorney general and Malcom L. Stewart, deputy solicitor general and several other Justice Department colleagues.

“By allowing a lay jury to second-guess the PTO’s judgment even in close cases, the preponderance standard would diminish the expected value of patents and would reduce future investors’ incentives to innovate and to disclose their inventions to the public,” they added.

It should be Congress, not the courts, that get to change the standard, if the standard has to be changed, they argued.

The Supreme Court is scheduled to hear oral arguments mid-April. The administration on Friday petitioned the court to participate.

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.


Public Knowledge Celebrates 20 Years of Helping Congress Get a Clue on Digital Rights



Screenshot of Gigi Sohn from Public Knowledge's 20th anniversary event

February 27, 2021 – The non-profit advocacy group Public Knowledge celebrated its twentieth anniversary year in a Monday event revolving around the issues that the group has made its hallmark: Copyright, open standards and other digital rights issues.

Group Founder Gigi Sohn, now a Benton Institute for Broadband and Society senior fellow and public advocate, said that through her professional relationship with Laurie Racine, now president of Racine Strategy, that she became “appointed and anointed” to help start the interest group.

Together with David Bollier, who also had worked on public interest projects in broadcast media with Sohn, and is now director of Reinventing the Commons program at the Schumacher Center for a New Economics, the two cofounded a small and scrappy Public Knowledge that has become a non-profit powerhouse.

The secret sauce? Timing, which couldn’t have been better, said Sohn. Being given free office space at DuPont Circle at the New America Foundation by Steve Clemmons and the late Ted Halstead, then head of the foundation, was instrumental in Public Knowledge’s launch.

The cofounders met with major challenges, Sohn and others said. The nationwide tragedy of September 11, 2001, occurred weeks after its official founding. The group continued their advocacy of what was then more commonly known as “open source,” a related grandparent to the new “net neutrality” of today, she said.

In the aftermath of September 11, a bill by the late Sen. Ernest “Fritz” Hollings, D-S.C., demonstrated a bid by large copyright interest to force technology companies to effectively be the copyright police. Additional copyright maximalist measures we launched almost every month, she said.

Public Knowledge grew into something larger than was probably imagined by the three co-founders. Still, they shared setbacks and losses that accompanied their successes and wins.

“We would form alliances with anybody, which meant that sometimes we sided with internet service providers [on issues like copyright] and sometimes we were against them [on issues like telecom],” said Sohn. An ingredient in the interest group’s success was its desire to work with everyone.

Congress didn’t have a clue on digital rights

What drove the trio together was a shared view that “Congress had no vision for the future of the internet,” explained Sohn.

Much of our early work was spend explaining how digitation works to Congress, she said. The 2000s were a time of great activity and massive growth in the digital industry and lawmakers at the Hill were not acquainted well with screens, computers, and the internet. They took on the role of explaining to members of Congress what the interests of their constituents were when it came to digitization.

Public Knowledge helped popularize digital issues and by “walking [digital information] across the street to [Capitol Hill] at the time created an operational reality with digitization,” said Bollier.

Racine remarked about the influence Linux software maker Red Hat had during its 2002 initial public offering. She said the founders of Red Hat pushed open source beyond a business model and into a philosophy in ways that hadn’t been done before.

During the early days of Public Knowledge, all sorts of legacy tech was being rolled out. Apple’s iTunes, Windows XP, and the first Xbox launched. Nokia and Sony were the leaders in cellphones at the time, augmenting the rise of technology in the coming digital age.

Racine said consumers needed someone in Washington who could represent their interests amid the new software and hardware and embrace the idea of open source technologies for the future.

Also speaking at the event was Public Knowledge CEO Chris Lewis, who said Public Knowledge was at the forefront of new technology issues as it was already holding 3D printing symposiums before Congress, something totally unfamiliar at the time.

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Intellectual Property

U.S. and EU Privacy and Intellectual Property Landscape Complicate Data Use Requirements



Photo of Lee Tiedrich in February 2020 from the Regulatory Review on Twitter

February 7, 2021 – Differences in the intellectual property and privacy landscape between Europe and the United States account are among the forces complicating the regulatory landscape around commercial data, partners at Covington’s Second Annual Technology Forum said on January 27.

Further, because intellectual property laws do not provide robust protection for databases, organizations are increasingly relying on contracts that define rights and restrictions to protect their data.

When learning how to best to handle data, companies need to know what sources it is coming from, said Lee Tiedrich, a partner at Covington. Knowing the type of data is quite important, he said, since data comes in many forms. For example, open or proprietary data should be handled differently than user contributions and scraped data that comes off of public websites.

Differences between U.S. and European intellectual property laws also factor into database protection. Clients need to know how to source data properly because they want to protect their rights to their data and reduce their liability risks, Tiedrich said.

There is no sui generis database protection in the U.S., a term which means databases do not have strong legal protections. This is not unusual as intellectual property laws in the U.S. typically do not provide protection for databases, said Tiedrich.

From a EU legal perspective, there may be some form of IP protection in data but that does not eliminate privacy requirements applying to that data, said Freddie Argent, a partner at Covington.  

The panelists also discussed key terms of contracts for data licensors. Data licensors need to employ best practices, have standardized terms, and apply consistency across deals, said Adrian Perry, partner at Covington. Terms of service and privacy policies require clarity with the licensee acknowledging and accepting it, Perry added.

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In Google v. Oracle, Supreme Court Hears Landmark Fair Use Case on Software Copyright



Photo of Tom Goldstein from the Peabody Award used with permission

October 12, 2020 – The Supreme Court on Wednesday publicly struggled with the copyrightability of software in a uniquely contested case between Google and Oracle, the outcome of which could play a significant role in the future of software development in the United States.

The oral arguments were the culmination of a battle that started 10 years ago, when tech company Oracle accused Google of illegally copying its code. Oracle owns the copyright to the Java application programming interface that Google utilized to establish a new mobile operating system.

The company has sued Google for more than $9 billion in damages.

Yet Google claimed a “fair use” defense to its copying. Google copied less than 1 percent of the Java code. Even though the law generally treats computer programs as copyrightable, Google’s attorney before the Supreme Court, Thomas Goldstein, said that by adapting Oracle’s code to serve a different purpose, Google’s use was “transformational,” and entitled to fair use protections.

Goldstein said that this form of unlicensed copying is completely standard in software, and saves developers time and lowers barriers to innovation.

He referenced a famous Supreme Court precedent about public domain works, Baker v. Selden, which in 1880 declared that once information is published to the public, the public has a right to use it.

“Google had the right to do this,” said Goldstein.

Still, Oracle attorney Joshua Rosenkranz asserted that the Java code is an expressive work eligible for copyright protections. Rosenkranz further argued that Google’s use of the code was not transformational.

Justice Sonia Sotomayor appeared to suggest that jurors in the lower court case properly found Google’s use to be transformational because it took the APIs from a desktop environment to smartphones.

“Interfaces have been reused for decades,” said Goldstein. Google had to reuse Oracle’s code to respond to interoperability demands.

“It has always been the understanding that this purely functional, non-creative code that is essentially the glue that keeps computer programs together could be reused, and it would upend that world to rule the other way,” he said.

Supreme Court observers said that the high court appeared leaning toward upholding the 2016 jury verdict vindicating Google’s fair use defense.

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