Cyberlaw Cases

Case and Court

• Am. Booksellers Found. for Free Expression v. Strickland (6th Cir.), on certified questions to Ohio Supreme Court as Cordray v. Am. Booksellers Found. for Free Expression.

On January 27, 2010 the Ohio Supreme Court issued its opinion in American Booksellers Foundation for Free Expression v. Cordray. We previously wrote about the oral argument in this case, and discussed this case with other state efforts to regulate the internet.

To recap, this case involved the Sixth Circuit’s certification of questions of state law for the Ohio Supreme Court to consider, particularly whether the Ohio Attorney General was correct to construe narrowly Ohio’s R.C. 2907.31, an anti-dissemination statute aimed at restricting material deemed harmful to minors, such that its application be limited to personally directed communications via instant messaging, person-to-person e-mails, and private chat rooms and not to material posted on generally accessible websites and in public chat rooms.

The Ohio Supreme Court agreed with the Attorney General’s narrow reading. The American Booksellers Foundation for Free Expression had instead urged the court to find the statute unconstitutional and leave the task of writing a constitutional statute to the Ohio state legislature.

In a very short opinion the Ohio Supreme Court believed the statute could be salvaged because the Ohio Attorney General claims “that a person who does not ‘know or have reason to believe that a particular recipient of the information or offer is a juvenile’ does not violate the statute upon transmitting harmful-to-juveniles material, even if a minor receives it.” Thus, the Court limited the scope of the statute to personally-directed communications and not those communicated through generally accessible websites or public chatrooms where an individual cannot control whether a particular recipient is a juvenile.

Particularly disappointing in this opinion was the Court’s avoidance of the tough hypothetical questions asked at oral argument. At oral argument the parties discussed email listservs where a sender might have knowledge or reason to believe that juveniles were subscribers but because of the nature of listserv technology a sender would lack the ability to restrict recipients. Any time one had reason to believe at least one juvenile were subscribed to a list, one would be forced to restrict one’s otherwise permissible adult-to-adult communications via that list or run afoul of this statute. As I wrote before, this may be the right policy result, but it is not what the statute says in section (D)(2)(b). The court fails to discuss listservs at all, leaving this question unresolved.

However, recall that this case had an odd posture in which both parties were essentially arguing for this same narrow reading of the statute. With the above-mentioned exception of greater clarity on listservs, mailing lists, and perhaps USENET groups that ABFFE desired, both ABFFE and the Attorney General can claim something of a victory here. The case now returns to the Sixth Circuit and we will see how they apply the Ohio Supreme Court’s interpretation of this statute.

See also:

• James Nash, State high court upholds Net law to protect kids, The Columbus Dispatch (Jan. 28, 2010).
• Laura A. Bischoff, Anti-predator porn law doesn’t apply to web sites, Dayton Daily News (Jan. 28, 2010).
• Julie Carr Smyth, Ohio high court narrowly interprets anti-porn law, BusinessWeek (Jan. 27, 2010).

Case and Court:

Jacobsen v. Katzer, (N.D. Cal.)

We recently covered the summary judgment arguments in the model railroad free software case. Just days later a decision from the court granted Jacobsen victories on virtually every issue suitable for resolution on summary judgment.

Summary judgment was granted in favor of Jacobsen on the Anticybersquatting Consumer Protection Act (ACPA) claim, on his copyright infringement claim, on Defendant’s counterclaim for copyright infringement, and partial summary judgment on the DMCA Copyright management information claim (on everything but the knowledge and intent elements).

We had previously highlighted the actual damages issue as particularly noteworthy, and while the court does not reach an award of damages in this ruling, the court wrote,

“[T]he Court may assume at this procedural stage that there is some value for the expenditure of time invested in the JMRI Project and that it therefore has some monetary value.”

and

“[T]he Court is unpersuaded that Plaintiff cannot prove damages.”

The parties are supposed to attend another settlement conference shortly and the writing is on the wall on this one, so if both parties adopt reasonable positions going in to that conference, they should come out with a resolution. Timing will be interesting, however, as the Federal Circuit appeal on irreparable harm is slated for oral argument on Jan. 4, 2010, and that appeal might not go forward if a settlement is finalized beforehand.

Earlier this week, Judge Gertner entered judgment to the tune of $675,000 in Sony BMG v. Tenenbaum. Nothing particularly surprising there. This was the number arrived at by the jury, based on a statutory damages calculation of $22,500 per infringed work.

The court also issued an injunction barring Joel Tenenbaum from infringing plaintiffs’ work in the future, and requiring him to destroy all infringing copies of plaintiffs’ works. Again, all pretty standard fare.  But a couple issues of note crop up in the court’s memorandum on the issue of injunctive relief. First, the court rightly refused the record labels’ effort to enjoin Tenenbaum from “promot[ing] … using the Internet or any online media distribution system to infringe copyrights,” recognizing the First Amendment implications of such an ambiguous prior restraint.

More troubling is the court’s treatment of the standard for injunctive relief. A permanent injunction requires a showing that the harm at issue is irreparable and that monetary damages are inadequate. If you are not a copyright litigator, you might wonder how plaintiffs who are to receive $675,000 in damages for sharing 30 songs could argue with a straight face that they have suffered irreparable harm for which money alone cannot possibly compensate.
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Case and Court:

Jacobsen v. Katzer, (N.D. Cal.)

Occasionally we will blog about “Other cases to watch” that are not on our Top 10 list.

On Friday, Dec. 4, 2009, I attended the oral argument in Jacobsen v. Katzer on the parties’ cross-motions for summary judgment. This case has made one trip to the Federal Circuit already and has oral argument in another appeal scheduled for Jan. 4, 2010. It seems to be less recognized that at least two interesting issues remain in the case at the district court level: 1) the alleged infringement of the selection and arrangement of certain data, and 2) the appropriate method of calculating actual damages to a free software project that, through failure to timely register its copyrights, is not eligible for statutory damages.

Background

In Jacobsen’s first appeal, the Federal Circuit vacated and remanded the denial of Jacobsen’s motion for a preliminary injunction premised on an allegation of copyright infringement. Jacobsen, a UC Berkeley physics professor, leads the Java Model Railroad Interface (JMRI) free software project which, at the time of this dispute, was provided under the Artistic license. The key issue on the first appeal was whether the alleged breach of a free software license, such as the Artistic License, provided JMRI with a cause of action for copyright infringement or merely for breach of contract.
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As reported on Google’s Public Policy Blog and in the New York Times, the Authors Guild, the AAP members, and Google have announced their amended settlement in the Book Search case.

The amended settlement attempts to address a number of the objections raised regarding antitrust issues, international copyright ownership, pricing, and access to out-of-print and/or orphaned works. It also has provisions for Open Access options for rightsholders, such as the option to put a Creative Commons license on your work. There do not seem to be any amendments to address reader privacy concerns, at least not directly.

No dates for filing objections or a fairness hearing have been set, but the parties have requested the following:

• December 14 – Supplemental Notice commences.
• January 28 – Class member Opt outs are due.
• February 4 – DOJ comment on settlement is due.
• February 11 – Plaintiffs’ motion for final settlement approval is due.
• February 18 – Final fairness hearing occurs.

Update: Judge Chin has granted preliminary approval to the amended settlement and agreed to hold the fairness hearing on February 18, 2010.

Case and Court

• Am. Booksellers Found. for Free Expression v. Strickland (6th Cir.), on certified questions to Ohio Supreme Court as Cordray v. Am. Booksellers Found. for Free Expression.

In our previous coverage of state efforts to regulate the internet, we discussed the American Booksellers Foundation for Free Expression’s challenge to Ohio’s O.R.C. § 2907.31, which prohibits providing material and performances with certain sexual content to juveniles, while exempting material and performances disseminated to a juvenile by a “method of mass distribution [which] does not provide the [sender] the ability to prevent a particular recipient from receiving the information.” O.R.C. § 2907.31(D)(2)(b).

The Sixth Circuit certified two questions regarding the appropriate interpretation of the statute to the Ohio Supreme Court, which heard oral argument in the case on Oct. 20, 2009. You can view video of the oral argument from the Supreme Court of Ohio’s website:

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We’ve previously covered the challenge to the FCC’s 2008 Order declaring Comcast’s network management practices unreasonable and discriminatory. The FCC recently filed its brief to the D.C. Circuit, as have amici and intervenors. Here’s a rundown of those briefs.
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As has been reported in the press, Judge Chin held a short hearing today on the GBS Settlement and gave the parties until November 9, 2009 to submit an amended settlement agreement to address the concerns raised. There are no official dates for responses to be filed, but there was some indication that the Court would hold a new fairness hearing in December or early January 2010.

Today was the deadline for amicus (”friend of the court”) briefs in support of the Obama Administration’s position in the Bilski case. On behalf of the U.S. Patent Office, they argue that patentable processes must be limited to technological processes, which include but are not limited to those that are tied to a particular machine or that transform matter into a different state or thing. Because the Bilski application does neither, they argue it is unpatentable.

Prof. Pamela Samuelson and I filed a brief in support of this position on behalf of the Kauffman Foundation, EFF, Public Knowledge, MIT business professor Eric von Hippel, and several well-known technology entrepreneurs. The brief urges the court to affirm the rejection of the Bilski application for three reasons: (1) the history and structure of § 101 limit the construction of “process” to technological processes (which we define), (2) allowing patents on non-technological processes such as those in the business and service industries is unnecessary and harmful to innovation, and (3) removing the long-standing technological limit on § 101 processes would undermine the institutional competence of both the PTO and the federal courts to protect innovation.

EFF has done a blog post on the brief and the case here.

Briefs in support of Bilski’s position can be found here.

I will try to post links to various briefs as they come in.

To start, you can find the Redhat brief here.

UPDATE: Patently-O has most of the amici supporting the USPTO here.

Case and Court:

• Vernor v. Autodesk, Inc. (W.D. Wash.).

In this blog’s previous coverage of the “Copy Ownership Cases,” I attempted to briefly summarize three important cases where ownership of copies is critical and so did not delve into a detail relevant to this update.

The decision in Vernor v. Autodesk from May of 2008 was a decision on Autodesk’s motion to dismiss the case. Motions to dismiss are among the first motions one might file in a federal case and occur prior to the exchange of documents or the deposition of witnesses that occurs during the discovery process. Typically once that discovery process is complete, the parties may bring motions for summary judgment in which a party will argue that, based on the undisputed facts, and resolving any disputed fact in favor of the other party, the court can simply apply the law to those facts and rule in their favor. In a grand demonstration of the ability of opposing lawyers to take on diametrically opposed world views, parties often both file such summary judgment motions, which are called “cross-motions” for summary judgment.

Such cross-motions for summary judgment were filed in Vernor v. Autodesk and the court held oral argument on the motions on Tuesday, Sep. 29, 2009. A few news outlets covered the oral argument: PC World, Zeropaid, Slashdot.

With somewhat dizzying speed, the court issued its opinion on the cross-motions for summary judgment the next day, Sep. 30, 2009. Having seventeen months to consider any new developments, the court was obviously not persuaded that anything important had changed as it reached the same conclusions for the same reasons, and directed the clerk to enter final judgment for Vernor.

The court’s opinion is, like its earlier opinion, careful, methodical, well-researched, and thorough. So many courts addressing the issue of copy ownership have dispensed with the question just by noting that software distributors claim to merely “license” and not to sell their software. The Vernor court finally cuts through this misleading way of framing the question by noting that “the use of software copies can be licensed while the copies themselves are sold.”

The court explains again why the Ninth Circuit precedent that it is bound to follow, United States v. Wise, requires the result that Vernor is the owner of the copies of the software. “Wise requires the court to look at a transaction holistically, and the court finds no basis for the conclusion that an agreement to permit perpetual possession of property can be construed as reserving ownership.” This is the key factor in copy ownership cases: perpetual possession. When a transaction results in an individual being entitled to perpetual possession of the copy, as was the case for Vernor, then courts should find that such individuals are owners of their copies, entitled to a “first sale” right to resell the copy if they so choose.

Autodesk now has to decide whether to appeal this ruling and has to do so without the benefit of Ninth Circuit guidance in UMG Recordings, Inc, v. Augusto, which has all the briefs filed but has not yet had oral argument and MDY Industries LLC v. Blizzard Entertainment, Inc., in which the briefing on appeal is still ongoing. Decisions in either of these cases could greatly clarify how things will go for Vernor and Autodesk, but the Ninth Circuit’s decisions in these cases are likely over a year away. However, the Vernor court has now, twice, provided a valuable roadmap for future courts that address the issue of copy ownership.

See Also:

• Thom Holwerda, Judge Sides with Vernor, Slams Autodesk, OS News (Oct. 1, 2009).
• Nancy Gohring, In Autodesk Case, Judge Rules Secondhand Sales OK, PC World (Oct. 1, 2009).

The Solicitor General has filed its brief on behalf of the Patent and Trademark Office in the Bilski v. Kappos case before the Supreme Court.

In sum, it argues that United States patent law only protects “industrial and technological” processes and not methods, like Bilski’s method of hedging financial risk, that are “untethered to technology.” Amicus briefs in support of the PTO’s position are due this Friday, Oct. 2. I plan to file one and will post a link to it and others when they are public.