TLJ News: January 6-10, 2013.

TLJ News from January 6-10, 2013

Obama Signs VPPA Amendments Act

1/10. President Obama signed HR 6671 [LOC | WW], the "Video Privacy Protection Act Amendments Act of 2012". See, White House news office release.

This Act revises the Video Privacy Protection Act (VPPA) to facilitate practices of social media web sites. See, stories titled "House Passes Video Privacy Protection Act Amendments" in TLJ Daily E-Mail Alert No. 2,494, December 19, 2012, and "Senate Passes VPPA Amendments" in TLJ Daily E-Mail Alert No. 2,496, December 21, 2012.

Rep. Bob Goodlatte (R-VA) stated in a release on January 10 that "Federal laws need to catch up with the technology of today ... Over the past two decades, video distribution and the way consumers view video content has changed dramatically. Social media users, especially young people, do not understand why they cannot share information about their favorite movies or TV shows in the same way that they can music or books. My legislation preserves careful protections for consumers' privacy while modernizing the law to empower consumers to do more with their video consumption preferences, including sharing favorite TV shows or recently watched movies via social media networks in a simple way."

DOJ Sues Bazaarvoice to Force Divestiture of Recently Acquired PowerReviews

1/10. The Department of Justice (DOJ) filed a civil complaint [21 pages in PDF] in the U.S. District Court (NDCal) against Bazaarvoice Inc. alleging that Bazaarvoice's acquisition of PowerReviews Inc. in June of 2012 lessened competition substantially in interstate trade and commerce in violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18.

Section 7 provides in part that "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital" or "acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." (Emphasis added.)

Bill Baer, who was confirmed as Assistant Attorney General in charge of the DOJ's Antitrust Division at the close of the 112th Congress, stated in a release that "Bazaarvoice bought PowerReviews knowing that it was acquiring its most significant rival and hoping to benefit from diminished price competition".

William Baer Baer (at right) added that "Without competitive pressure from PowerReviews, Bazaarvoice will be able to increase prices to retailers and manufacturers for its product ratings and reviews platform. This lawsuit seeks to prevent one firm from dominating the product rating and review platforms market, and demonstrates that transactions that are not reported to us are not immune from scrutiny."

The complaint alleges that "many retailers and manufacturers purchase product ratings and reviews platforms ("PRR platforms") to collect and display consumer-generated product ratings and reviews online. Bizaarvoice provides the market-leading PRR platform, and PowerReviews was its closest competitor. No other PRR platform competitor has a significant number pf PRR platform customers in the United States. By acquiring PowerReviews, Bazaarvoice elilminated it most significant rival and effectively insulated itself from meaningful competition."

The complaint requests that this acquisition "be adjudged to violate Section 7 of the Clayton Act", and that "the Court order Bazaarvoice to divest assets, whether possessed originally by PowerReviews, Bazaarvoice, or both, sufficient to create a separate, distinct, and viable competing business that can replace PowerReviews' competitive significance in the marketplace."

This case is U.S.A. v. Bazaarvoice, Inc., U.S. District Court in the Northern District of California, D.C. No. C-13-0133-JSC.

Federal Circuit Rules on Domestic Industry Requirement of Section 337

1/10. The U.S. Court of Appeals (FedCir) issued its per curiam en banc order denying rehearing, and rehearing en banc, in Interdigital Communications v. ITC, a Section 337 case involving wireless cellular phones.

The Court of Appeals also issued a second divided opinion that addressed at length the domestic industry requirement of Section 337. The majority held that the domestic industry requirement does not require domestic manufacture, and that mere licensing may suffice. Judge Newman dissented.

InterDigital filed a complaint with the U.S. International Trade Commission (USITC) alleging that Nokia violated 19 U.S.C. § 1337 by importing into the US phones that infringe its U.S. Patent Nos. 7,190,966 and 7,286,847, both of which are titled "Method and Apparatus for Performing an Access Procedure". InterDigital sought an exclusion order blocking imports of certain Nokia phones.

The USITC found the patents were not infringed. InterDigital appealed to the Court of Appeals. The three judge panel issued its divided opinion [35 pages in PDF] on August 1, 2012. It held that the USITC erred in construing certain critical claim terms in both patents, reversed the USITC's order finding no infringement, and remanded. That opinion focused on the issue of infringement.

Only four pages of that opinion addressed the domestic industry requirement. The Court of Appeals held that InterDigital satisfied the domestic industry requirement. It held that patent licensing alone can constitute a domestic industry.

Nokia petitioned for rehearing, which was denied on January 10, 2013. The three judge panel also issued another opinion [49 pages in PDF] on January 10. This opinion focuses on Nokia's domestic industry argument.

Subsection 1337(a)(1) provides that it is unlawful, among other things, to import into the US articles that infringe a valid and enforceable U.S. patent.

But then, subsection 1337(a)(2) provides that this exclusion applies "only if an industry in the United States, relating to the articles protected by the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of being established."

Also, subsection 1337(a)(3) provides that "an industry in the United States shall be considered to exist if there is in the United States, with respect to the articles protected by the patent, copyright, trademark, mask work, or design concerned--
(A) significant investment in plant and equipment;
(B) significant employment of labor or capital; or
(C) substantial investment in its exploitation, including engineering, research and development, or licensing."

Nokia argued that InterDigital's patent licensing activities do not satisfy the domestic industry requirement, emphasizing the phrases "with respect to the articles protected by the patent".

The Court of Appeals held that "section 337 makes relief available to a party that has a substantial investment in exploitation of a patent through either engineering, research and development, or licensing. It is not necessary that the party manufacture the product that is protected by the patent, and it is not necessary that any other domestic party manufacture the protected article." (Emphasis added.)

The Court of Appeals continued that "As long as the patent covers the article that is the subject of the exclusion proceeding, and as long as the party seeking relief can show that it has a sufficiently substantial investment in the exploitation of the intellectual property to satisfy the domestic industry requirement of the statute, that party is entitled to seek relief under section 337."

Finally, "section 337 protects American industries, including American industries that are built on the exploitation of intellectual property through engineering, research and development, or licensing."

Judge Newman wrote in her dissent that the majority's opinions "erred in holding that the domestic industry requirement is met by licensing the importation of foreign-made products."

She explained that "The purpose of the 1988 amendments to Section 337 was to permit patentees that do not themselves manufacture their patented products, such as universities and others that perform research or engineering, to have access to the Section 337 remedy. The 1988 amendments did not remove the requirement that ``articles protected by the patent´´ must be produced in the United States; the amendments were designed to enlarge the incentive for domestic production, not to eliminate it."

This case is Interdigital Communications LLC, et al. v. ITC, and Nokia Inc., et al., intervenors, U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2010-1093, an appeal from the U.S. International Trade Commission, Investigation No. 337-TA-613. Judge Bryson wrote both opinions, and Judge Mayer joined both. Judge Newman dissented in both.

People and Appointments

1/10. The W3C Advisory Committee announced the selection of new members of its Technical Architecture Group (TAG): Marcos Caceres, Yehuda Katz (jQuery Foundation), Alex Russell (Google), and Anne van Kesteren. They replace Peter Linss (HP), Ashok Malhotra (Oracle), and Larry Masinter (Adobe). The other members are Noah Mendelsohn, Jonathan Rees, Jeni Tennison (Open Data Institute), Henry Thompson (University of Edinburgh), and Tim Berners-Lee.

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1/10. The California Department of Justice released a report [27 pages in PDF] titled "Privacy on the Go: Recommendations for the Mobile Ecosystem". It offers a "set of privacy practice recommendations to assist app developers, and others, in considering privacy early in the development process".

Sen. Wyden Describes His Tech Policy Agenda

1/9. Sen. Ron Wyden (D-OR) gave a speech at the Consumer Electronics Show (CES) in Las Vegas, Nevada, in which he listed and discussed his proposals for legislative and agency action.

He said the foreign IP infringing activity should be dealt with by trade policy rather than by bills such as the SOPA and PIPA. He called for legislation to regulate broadband data caps. He advocated a Congressional review of software patents. He urged expansion of the FCC's December 2010 order regulating broadband internet access service (BIAS) providers to regulate wireless providers the same as wireline. He advocated amending antitrust statutes to prohibit BIAS providers from discriminating against content providers. He advocated rewriting the ECPA to protect privacy. He advocated passage of cyber security legislation, but criticized the leading House and Senate bills in the 112th Congress.

He also identified the People's Republic of China's blocking of access to US web sites, such as Google and Facebook, not as censorship, but as protectionism intended to advantage PRC based competitors. He did not, however, offer a solution to this, other than giving President Obama negotiating instructions.

See, full story.

Supreme Court Holds Covenant Not to Enforce Trademark Removes Standing to Sue to Declare Trademark Invalid

1/9. The Supreme Court issued its opinion [22 pages in PDF] in Already v. Nike, a trademark case in which the issue is standing to sue.

Nike, which makes shoes, filed a complaint in the U.S. District Court (SDNY) against Already, which makes competing shoes, alleging trademark infringement. Already counterclaimed that Nike's trademark is invalid. Nike then issued a covenant not to sue, stating that Already's actions "no longer infringe or dilute". Nike then moved to dismiss both its claims and the counterclaim of Already.

The District Court dismissed both claims and counterclaim. Already appealed the dismissal of its counterclaim. The U.S. Court of Appeals (2ndCir) affirmed. See, November 10, 2011 opinion. The Supreme Court affirmed the judgment of the Court of Appeals.

The question before the Supreme Court was whether a covenant not to enforce a trademark against a competitor's existing products and any future "colorable imitations" moots the competitor's action to have the trademark declared invalid.

The Supreme Court held that "Already's only legally cognizable injury -- the fact that Nike took steps to enforce its trademark -- is now gone and, given the breadth of the covenant, cannot reasonably be expected to recur. There being no other basis on which to find a live controversy, the case is clearly moot."

Chief Justice Roberts wrote for a unanimous court. However, Justice Kennedy wrote a concurring opinion, joined by Justices Thomas, Alito and Sotomayor, "to underscore that covenants like the one Nike filed here ought not to be taken as an automatic means for the party who first charged a competitor with trademark infringement suddenly to abandon the suit without incurring the risk of an ensuing adverse adjudication."

Kennedy wrote that "Courts should be well aware that charges of trademark infringement can be disruptive to the good business relations between the manufacturer alleged to have been an infringer and its distributors, retailers, and investors. The mere pendency of litigation can mean that other actors in the marketplace may be reluctant to have future dealings with the alleged infringer. Nike appears to have been well aware of that dynamic in this case."

He added that "Courts should proceed with caution before ruling that" covenants not to sue can be used to terminate litigation.

This case is Already v. Nike, Supreme Court of the U.S., Sup. Ct. No. 11-982, a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 11-314-CV. The Court of Appeals heard an appeal from the U.S. District Court for the Southern District of New York, Judge Richard Sullivan presiding. Judge Lohier wrote the opinion of the Court of Appeals, in which Judges Livingston and Leval joined. See also, Supreme Court docket.

FTC Grants HSR Early Terminations

1/9. The Federal Trade Commission (FTC) granted early termination on January 7, 2013 of the Hart Scott Rodino Act (HSR) waiting period for the following transactions:

priceline.com Incorporated and Kayak Software Corporation
Elliott Associates, L.P. and Compuware Corporation
Liberty Spinco, Inc. and Barnes & Noble, Inc.
Liberty Spinco, Inc. and Live Nation Entertainment, Inc.
Robert R. Bennett and Liberty Spinco, Inc.
John C. Malone and Liberty Spinco, Inc.

See, FTC notice of January 8.

The FTC also granted early termination on January 8 of the HSR waiting period for the transaction involving Hewlett-Packard Company and Digital Risk, LLC. See, FTC notice of January 9.

See also, FTC web page titled "Hart Scott Rodino Pre-Merger Notification Program".

OUSTR Lauds Shut Down of Gougou.com

1/9. The Office of the U.S. Trade Representative (OUSTR) claimed some credit for the shutdown of Gougou.com on the basis that it was listed in the OUSTR's December 2012 notorious markets report. See, OUSTR release.

The OUSTR added that it "hopes that the Notorious Markets Review will continue to yield the kind of concrete action from highlighted markets that led to the removal of several markets from the list in 2012."

The OUSTR released a report [9 pages in PDF] on December 13, 2012, titled "Out-of-Cycle Review of Notorious Markets". This report identified internet and physical notorious markets located outside of the US that make available intellectual property infringing products.

It listed numerous deep linking web sites, cyber lockers, B2B and B2C sites, BitTorrent indexing sites, BitTorrent trackers, social media cites, and pay per download sites, as well as physical markets.

The report named Gougou.com, and stated that "Industry reports that this China-based website continues to actively provide users with deeplinks to infringing music files and torrent links from unauthorized sources." (At page 4.)

See also, story titled "OUSTR Releases 2012 Notorious Markets Report" in TLJ Daily E-Mail Alert 2,492, December 17, 2012.

Copyright Office Revises Rules Regarding Refunds of Cable Royalties Under the STELA

1/9. The Copyright Office (CO) published a notice in the Federal Register (FR) that announces, describes, recites, and sets the effective date for, its new rules regarding its practices for providing refunds of cable royalties under the provisions of the Satellite Television Extension and Localism Act of 2010 (STELA).

This notice explains that "A cable operator must pay royalties to and file Statements of Account with the Office every six months in order to use the statutory license that allows for the retransmission of over-the-air broadcast signals" under 17 U.S.C. § 111.

This notice continues that the STELA, which was S 3333 [LOC | WW] in the 111th Congress, "allows a cable operator to calculate its royalty obligation for the carriage of distant signals on a community-by-community basis for accounting periods beginning on or after January 1, 2010, instead of calculating its royalty obligation based on the system as a whole. STELA also states that a cable operator shall not be subject to an infringement action if it used the subscriber group methodology to calculate its royalty obligation in a Statement filed prior to the effective date of STELA. Although a cable operator cannot be held liable for using the subscriber group methodology, the regulation clarifies that a cable operator's obligation to pay for the carriage of distant signals prior to the effective date of STELA was determined on a system-wide basis."

"Therefore, refunds for an overpayment of royalty fees on a Statement filed prior to the effective date of STELA will be made only when a cable operator has satisfied its outstanding royalty obligations (if any), including the obligation to pay for the carriage of each distant signal on a system-wide basis." (Parentheses in original.)

The effective date is February 8, 2013. See, FR, Vol. 78, No. 6, January 9, 2013, at Pages 1755-1759.

1st Circuit Rules in Trademark Case

1/9. The U.S. Court of Appeals (1stCir) issued its opinion in Swarovski v. Building #19, a civil trademark infringement case.

Swarovski makes luxury goods, including the crystal figurines at issue in this case, which it sells via posh retailers. Building #19 is a discount store chain that acquired a large amount of Swarovski's figurines at an insurer's salvage sale after a severe storm damaged the warehouse where they had been stored by their prior owner. Building #19 ran newspaper ads that used the word Swarovski in huge print.

Swarovski, which holds U.S. trademarks, filed a complaint in the U.S. District Court (DRI) seeking an injunction against use of its name. The Court of Appeals opinion applies the four prong test for injunctive relief to trademark infringement cases. The Court of Appeals reversed the District Court's preliminary injunction, and remanded.

This case is Swarovski Aktiengesellschaft, et al. v. Building #19, Inc., U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 12-1659, an appeal from the U.S. District Court for the District of Rhode Island, Judge Mary Lisi presiding. The Court of Appeals issued a per curiam opinion of a two judge panel comprised of Judges Lynch and Woodlock.

People and Appointments

1/9. Secretary of Labor Hilda Solis announced in a letter to Department of Labor (DOL) employees that "This afternoon, I submitted my resignation to President Obama". See also, statement by President Obama.

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1/9. The Association for Competitive Technology (ACT) announced the launch of an "ACT 4 Apps Initiative" to "educate app makers on issues including privacy and data security". See, ACT release.

1/9. The Copyright Office (CO) published a notice in the Federal Register (FR) that announces, describes, recites, and sets the effective date for, it rules changes regarding its practices for providing refunds of cable royalties under the provisions of the Satellite Television Extension and Localism Act of 2010. The effective date is February 8, 2013. See, FR, Vol. 78, No. 6, January 9, 2013, at Pages 1755-1759.

DOJ and USPTO Issue Statement on Injunctive Relief for Infringement of SEPs Subject to FRAND Commitments

1/8. The Department of Justice's (DOJ) Antitrust Division and the U.S. Patent and Trademark Office (USPTO) released a document [10 pages in PDF] titled "Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments".

This policy statement addresses "whether injunctive relief in judicial proceedings or exclusion orders in investigations under section 337 of the Tariff Act of 1930 are properly issued when a patent holder seeking such a remedy asserts standards-essential patents that are encumbered by a RAND or FRAND licensing commitment." (Footnotes omitted.)

This policy statement argues that an exclusion order or injunction for a FRAND encumbered SEP may be inconsistent with the public interest. However, there are exceptions. For example, an exclusion order or injunction may be appropriate where the putative licensee has refused to take a FRAND license.

See, full story.

Dish Makes Bid for Clearwire

1/8. Clearwire announced in a release that "it has received an unsolicited, non-binding proposal" from the Dish Network Corporation.

Clearwire, which is based in Bellevue, Washington, provides broadband wireless internet access. Dish provides video programming via satellite.

Clearwire elaborated that Dish's proposal "provides for DISH to purchase certain spectrum assets from Clearwire, enter into a commercial agreement with Clearwire, acquire up to all of Clearwire's common stock for $3.30 per share (subject to minimum ownership of at least 25% and granting of certain governance rights) and provide Clearwire with financing on specified terms." (Parentheses in original.)

Clearwire added that "The DISH Proposal is only a preliminary indication of interest and is subject to numerous, material uncertainties and conditions, including the negotiation of multiple contractual arrangements being requested by DISH (some of which, as currently proposed, may not be permitted under the terms of Clearwire's current legal and contractual obligations). It is also subject to regulatory approval." (Parentheses in original.)

The Dish Network Corporation announced in a release that "it has formally approached Clearwire Corporation with respect to a potential strategic transaction on terms as generally outlined in the Clearwire release, including an offer to purchase all of the Clearwire common shares at $3.30."

Back on December 17, 2012, Sprint announced in a release that it "has entered into a definitive agreement to acquire the approximately 50 percent stake in Clearwire ... it does not currently own for $2.97 per share, equating to a total payment to Clearwire shareholders, other than Sprint, of $2.2 billion." See also, Clearwire release of December 17.

Microsoft Addresses Inconsistent Policies of FTC and DOJ on SEPs

1/8. Microsoft Deputy General Counsel Dave Heiner wrote a piece titled "DOJ Patent Policy Means FTC Should Think Again about Google Patent Order".

It is understandable that Microsoft would have liked antitrust regulators to take a firmer line with Google on abusive assertion of standards essential patents (SEPs) subject to fair, reasonable and nondiscriminatory (FRAND) commitments. However, realistically, the Federal Trade Commission (FTC) is not going to re-examine its recently announced Google determinations in the foreseeable future.

Nevertheless, Heiner in effect makes the argument that there is now a divergence of antitrust policy with respect to SEPs between the two US antitrust regulators, the FTC and Department of Justice (DOJ).

Heiner argues that the DOJ policy is better. But, aside from which agency has the better policy, if the argument that Heiner advances is correct, there are now two inconsistent sets of rules regarding SEPs, and whether a company has violated the law may depend upon which agency conducts the investigation.

On January 3, 2013, the FTC filed and simultaneously settled an administrative complaint against Google regarding its abuse of SEPs for which it was bound by FRAND commitments. An accompanying order imposes some limitations on its ability to abuse these SEPs. However, it left Google free to assert SEPs subject to FRAND commitments in some situations.

Microsoft had lobbied for more aggressive action by the FTC in this investigation, as well as in its search bias investigation. See, story titled "FTC Concludes Its Investigation of Google" in TLJ Daily E-Mail Alert No. 2,504, January 7, 2012.

Almost immediately after the FTC announced its determinations, the DOJ Antitrust Division and the U.S. Patent and Trademark Office (USPTO), on January 8, 2013, released a document [10 pages in PDF] titled "Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments".

See, story titled "DOJ and USPTO Issue Statement on Injunctive Relief for Infringement of SEPs Subject to FRAND Commitments" in TLJ Daily E-Mail Alert No. 2,506, January 9, 2012.

Heiner wrote that the DOJ has concluded that "holders of standard essential patents should not be permitted to seek product injunctions against firms that are willing to take a reasonable license", but that the FTC's settlement with Google "does not live up to the approach outlined by the DOJ".

He added that "This is important because the FTC has suggested that its Google order may serve as a template for the resolution of other cases over time."

He elaborated that "The FTC's order grants Google leeway to seek to block shipments of other firms’ products under circumstances not contemplated by the DOJ/PTO statement. Rather than establish a clear rule that holders of standard essential patents should not seek an injunction against any willing licensee, the FTC’s order allows such lawsuits. In particular, the FTC’s order says (in Section IV.F) that Google may abandon its promise to make its standard essential patents available on reasonable terms with regard to any firm that has tried to obtain an injunction against any product made by Google on the basis of that firm’s standard essential patents. Google can seek a product injunction even if the other firm is willing to take a license to Google’s patents on reasonable terms."

Defendant Pleads Guilty in PRC Based Software Piracy Case

1/8. The Department of Homeland Security's (DHS) Immigration and Customs Enforcement (ICE) announced in a release that Xiang Li pled guilty in the U.S. District Court (DDel) to conspiracy to commit criminal copyright infringement, in violation of 17 U.S.C. § 506(a)(1)(A), 18 U.S.C. § 371, and 18 U.S.C. § 2319, and wire fraud, in violation of 18 U.S.C. §§ 1343 and 1349.

This is not a typical criminal copyright infringement case, for several reasons. First, the illegal operations were based in the People's Republic of China (PRC), beyond the reach of US prosecutors and courts. However, in this case, the US lured one defendant, Xiang Li, to the island of Saipan, where he was arrested. Second, the scale was particularly large. The ICE estimated the retail value of illegally sold software to be at least $100 Million. Third, while Xiang Li pled guilty to only copyright and wire fraud related charges, the underlying facts suggest other criminal offenses.

See, DHS/ICE's presentation slides explaining the criminal operations that gave rise to this case.

Documents released by the US on January 8 do not disclose whether or not PRC law enforcement officials assisted their US counterparts in this case. TLJ phone calls to the ICE and DOJ went unreturned.

The U.S. Attorney's Office (USAO) for the District of Delaware filed a Government's Statement of Facts on January 4, 2013 that states that "Between April 2008 and June 2011, Defendant Xiang Li operated an online business through which he engaged in the unauthorized reproduction and distribution of copyrighted software via the Internet. The copyrighted software sold by Defendant was ``cracked,´´ meaning that the digital license files and access control features created to prevent unauthorized access to the copyrighted software had been disabled or circumvented."

This document continues that this "Defendant engaged in over 500 transactions through which he distributed approximately 550 different copyrighted software titles to at least 325 purchasers located in at least 28 states and over 60 foreign countries. ... These software products were owned by approximately 200 different manufacturers. More than one-third of these purchases were made by individuals within the United States, including small business owners, government contractors, students, inventors, and engineers." retail value "totaling at least $100 million".

The USAO disclosed some of the defendant's purchasers. For example, "Defendant sold and transmitted via the Internet 12 cracked software programs to Cosburn Wedderburn, who was then a NASA electronics engineer, working at NASA's Goddard Space Flight Center, in Greenbelt, Maryland."

Also, this "Defendant sold and transmitted via the Internet 10 cracked software programs to Dr. Wronald Best, who held the position of ``Chief Scientist´´ at a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement with a variety of applications such as radio transmissions, radar usage, microwave technology, and vacuum tubes used in military helicopters."

This document states that Xiang Li that had a co-conspirator in Chengdu, PRC. A previously released indictment disclosed his name, Chun Yan Li. See also, Department of Justice (DOJ) release of April 12, 2012.

Also, Cosburn Wedderburn previously pled guilty to conspiracy to commit criminal copyright infringement.

US law enforcement authorities arranged for Xiang Li to travel from Chengdu, China to the Island of Saipan in June of 2011 to meet with undercover agents. The Statement of Facts discloses that "Defendant stated that he had approximately twenty gigabytes of valuable internal data from an American software company, which he offered to sell to the undercover agents for an additional $3,000."

This "Defendant also provided the agents with disks containing approximately twenty gigabytes of proprietary data unlawfully obtained from an American software company."

The December 13, 2012 plea agreement also provides for forfeiture of DVDs, thumb drives, an external hard drive, a laptop computer, and six domain names.

Jodie Kelley of the Business Software Alliance (BSA) praised the ICE in a release. She stated that "The massive scale of this single case highlights the broader, persistent problem we face with software piracy around the world ... Software piracy has huge economic consequences, which underscores the need for continued vigilance by industry, law enforcement authorities, and end users."

This case is U.S.A. v. Xiang Li, U.S. District Court for the District of Delaware, D.C. No. Cr. A. No. 10-112-LPS.

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1/8. The Cato Institute published a paper [28 pages in PDF] titled "China, America, and the Pivot to Asia". The author is the Cato's Justin Logan.

1/8. The Copyright Alliance published an essay titled "Copyright and the 113th Congress". The author is Marla Grossman (American Continental Group). It lists and describes copyright issues that the Congress is likely to consider in 2013. These are copyright reform, exceptions for libraries and archives, the first sale doctrine and the Supreme Court's forthcoming opinion in Kirtsaeng v. John Wiley & Sons, orphan works, creating a small copyright claims process, and music licensing (such as the 112th Congress's Internet Radio Fairness Act and Interim FIRST Act). There will also be appointments to replace David Kappos (USPTO), and possibly James Billington (Library of Congress).

Supreme Court Denies Cert in Patent Cases

1/7. The Supreme Court of the U.S. (SCUS) denied certiorari in several patent cases. See, January 7, 2013 Orders List [26 pages in PDF].

First, the SCUS denied certiorari in Leader Technologies v. Facebook. See, Orders List at page 6.

Leader Technologies filed a complaint in the U.S. District Court (DDel) against Facebook alleging patent infringement. The patent in suit relates to software that allows users on a network to communicate and collaborate on a large scale.

The trial jury, and the court, found the relevant claims invalid for the reason that Leader Technologies had offered for sale and publicly demonstrated the claimed invention prior to the critical date.

The Court of Appeals affirmed the judgment of the District Court. See, May 8, 2012 opinion [15 pages in PDF] of the U.S. Court of Appeals (FedCir). The denial of certiorari lets stand the judgment of the Court of Appeals.

This case is Leader Technologies, Inc. v. Facebook, Inc., Supreme Court of the U.S., Sup. Ct. No. 12-617, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2011-1366. The Court of Appeals heard an appeal from the U.S. District Court for the District of Delaware. See also, Supreme Court docket.

Second, the SCUS denied certiorari in Trans Video Electronics v. Sony Electronics, a patent infringement case involving technology for distributing video content through the Sony PlayStation Network. See, January 7, 2013 Orders List at page 6.

The Court of Appeals affirmed the District Court's summary judgment for Sony. See, August 10, 2012 judgment of the Federal Circuit.

This case is Trans Video Electronics, Ltd v. Sony Electronics, Inc., et al., Supreme Court of the U.S., Sup. Ct. No. 12-575, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. Nos. 2012-1110 and 2012-1134. The Court of Appeals heard an appeal from the U.S. District Court for the Northern District of California, D.C. No. 09-CV-3304, Judge Edward Chen presiding. See also, Supreme Court docket.

Third, the SCUS denied certiorari in Retractable Technologies v. Becton Dickinson and Becton Dickinson v. Retractable Technologies, another patent dispute. See, Orders List at page 3.

See also, July 8, 2011 opinion of the Federal Circuit. See also, petitioner for writ of certiorari, respondent's brief, and amicus curiae brief of the Solicitor General urging the Supreme Court to deny certiorari.

These cases are Retractable Technologies, et al. v. Becton, Dickinson and Co. and Becton Dickinson and Co. v. Retractable Technologies, et al., Supreme Court of the U.S., Sup. Ct. Nos. 11-1154 and 11-1278, petitions for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2010-1402. The Court of Appeals heard an appeal from the U.S. District Court for the Eastern District of Texas. See also, Supreme Court docket.

Fourth, the SCUS denied certiorari in Three-Dimensional Media v. Kappos. See,Orders List at page 3.

See also, December 12, 2011 judgment of the U.S. Court of Appeals (FedCir), and Solicitor General's opposition brief.

This case is Three-Dimensional Media Group Ltd. v. David Kappos, Supreme Court of the U.S., Sup. Ct. No. 12-48, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. No. 2011-1055. The Court of Appeals heard an appeal from the Board of Patent Appeals and Interferences. See also, Supreme Court docket.

People and Appointments

1/7. President Obama nominated John Brennan to be Director of the Central Intelligence Agency (CIA). Rep. Mike Rogers (R-MI), Chairman of the House Intelligence Committee (HIC), stated in a release that "I congratulate Mr. Brennan on his nomination to lead the CIA. I look forward to working with him."

1/7. The Federal Communications Commission (FCC) announced in a release that Jordan Usdan "will step down as Acting Director of Public-Private Initiatives this month", and that Rebecca Hanson, who is Senior Advisor in the FCC's Media Bureau, will take her place. FCC Chairman Julius Genachowski created this initiative in March of 2012. He stated then in a release that this initiative will "drive collaboration among government and private sector entities, including non-profit organizations, on broadband-related national priorities."

1/7. The Securities and Exchange Commission (SEC) announced in a release that Geoffrey Aronow will become SEC General Counsel "later this month". He is a partner in the Washington DC office of the law firm of Bingham McCutchen.

1/7. Comcast announced in a release that Joe Waz "will return to Comcast Corporation as Senior Strategic Advisor in public policy and external affairs".

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1/7. The U.S. Court of Appeals (7thCir) issued its opinion in US v. Keskes, affirming a criminal conviction and sentence for wire fraud and mail fraud. The defendant for years bought goods stolen from retail stores and resold them on the internet via eBay, Amazon and his own web site. This case is U.S. v. Ahmet Keskes, U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 12-1127, an appeal from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 1:09-cr-00797-1, Judge Samuel Der-Yeghiayan presiding. Judge Tinder wrote the opinion of the Court of Appeals, in which Judges Rovner and Williams joined.

1/7. The Cato Institute published a paper [36 pages in PDF] titled "A Rational Response to the Privacy Crisis". The author is Larry Downes.

1/7. The U.S. Court of Appeals (1stCir) issued its opinion in Harney v. Sony Pictures Television, a photograph copyright infringement case involving the issue of substantial similarity. The Court of Appeals affirmed the judgment of the District Court, against the photographer. This case is Donald Harney v. Sony Pictures Television, Inc., et al., U.S. Court of Appeals for the 1st Circuit, App. Ct. No. 11-1760, an appeal from the U.S. District Court for the District of Massachusetts, Judge Rya Zobel presiding. Judge Lipez wrote the opinion of the Court of Appeals, in which Judges Torruella and Howard joined.

1/7. The U.S. Court of Appeals (6thCir) issued its amended opinion [28 pages in PDF] in American Beverage Association v. Rick Snyder, et al., a case regarding the dormant commerce clause and extraterritorial effects of state regulation. The Court of Appeals issued its original opinion on November 29, 2012. See, story titled "6th Circuit Construes Dormant Commerce Clause" in TLJ Daily E-Mail Alert No. 2,481, December 3, 2012. This case is American Beverage Association v. Snyder, U.S. Court of Appeals for the 6th Circuit, App. Ct. No. 11-2097, an appeal from the U.S. District Court for the Western District of Michigan at Grand Rapids, D.C. No. 1:11-cv-195, Judge Gordon Quist presiding. Judge Clay wrote the opinion of the three judge panel. Judges Sutton and Rice both wrote concurring opinions.

Go to News from January 1-5, 2013.