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Advanced Technology Seminar IP Continued: Digital Content, Trademarks & Copyright Cyrus Daftary & Todd Krieger February 17, 2015.

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Presentation on theme: "Advanced Technology Seminar IP Continued: Digital Content, Trademarks & Copyright Cyrus Daftary & Todd Krieger February 17, 2015."— Presentation transcript:

1 Advanced Technology Seminar IP Continued: Digital Content, Trademarks & Copyright Cyrus Daftary & Todd Krieger February 17, 2015

2 Agenda Administrative Discussion Copyright and Technology (cont.) Trademarks Patents Questions & Answers 2

3 3 Online Content and Other DMCA Technology Disputes      

4 4 Copyright Related Technology Disputes Copyright issues often emerge with the introduction of new audio recording/playing devices. – VCRs (‘time shifting’). – Digital audio tape. – MP3 players (‘space shifting’). – Home CD and DVD duplicators. The RIAA and MPAA have pursued contributory infringers (sites) and individual users.

5 Space Shifting Case Discussion Whether Aereo “perform[s] publicly,” under Sections 101 and 106 of the Copyright Act by supplying remote equipment allowing a consumer to tune an individual, remotely- located antenna to a publicly accessible, over- the-air broadcast television signal, use a remote digital video recorder to make a personal recording from that signal, and then watch that recording. 5

6 May I Borrow and Image from a Twitter Posting? Eli and Jason found some great images online to use for their app. Can they use them? Agence France-Press discussion. 6

7 7 Online Music Introduction The Internet has Changed Content Distribution While Napster was still in business over 3 million unauthorized MP3 files were downloaded daily (M2 Presswire November 21, 2000). Apple sold billions of iTunes and Apps in 2014. Many artists post songs from pending CDs online. Local and unsigned bands can distribute their music worldwide. CD unit sales have dramatically declined (RIAA). Amazon MP3 now offers DRM free downloads for.89-.99 each from all four major labels.

8 Music Theft is Still Common 8

9 9 Evolution of Online Music Cases End User Host ISP End User ISP End User ISP Napster Database End Users Directory Software End Users Napster KaZaA, Grockster FasTrack supernode Network

10 Bit Torrent Facilitates Partial File Transfer from Multiple Users End User 10

11 11 Listeners Have Many Choices Computers and mobile devices now act as virtual jukeboxes. Favorite tracks can be swapped with friends. Virtual music communities help with profiling and sampling of music. Computer speakers or earbuds are adequate for desktop and portable listening. Technology allows consumers to take all of their music with them - everywhere.

12 12 What is Digital Technology Anyway? Like analog, digital refers to a method of data encoding. Digital is a binary code - either 0 or 1. Analog music recording stores and transmits all information - including redundant, inaudible, and relatively insignificant sound. Digitally recorded or compressed music approximates the actual sound by removing the redundant in imperceptible data making files easy to compress.

13 13 Online Music Technology MPEG 3 = Motion Picture Expert Group-1, Audio 3. Open standard. Sound files are compressed by removing information not likely to be noticed. Compression ratio = 10:1 (8.3%). (Minidisc = 5:1, Compact Disc = 1:1). A five minute CD track would be 50 megabytes - with compression = 5 megabytes. Download time reduced from two hours to a few minutes.

14 14 The Future of Digital Music (2001) “(CNN) -- The prospect of music lovers purchasing digital songs on the Internet in the future looks extremely bleak, despite efforts by the recording industry to convince them to do so, according to a new report.” – Portable devices are ubiquitous. – Mobile phones have video-enabled displays. Stand alone devices can play Internet radio. As bandwidth and connection speeds increase, more information can be transmitted. Memory capacity is improving as well. – 80 Gigabyte hard drive was $200 in 2003. – 2 Terabytes drive is less than $100.

15 15 Additional Sources of Law 17 U.S.C. (1976) ( Audio Home Recording Act (1992) (17 U.S.C. 1001) – Must conform to serial copy management system - Rio. Digital Performance Right in Sound Recordings Act (1995) – Exclusive right in residential subscription digital audio transmissions. 6.5% compulsory license rate. WIPO Treaty (1997) – I.S.P. safe harbor. Digital Millennium Copyright Act (12/98) - copy protection.

16 16 Rio R.I.A.A. v. Diamond Multimedia (1998) – Audio Home Recording Act: – Consumers can make copies of music they have purchased for personal use: Analog copies on cassette tape; Digital copies on a compact disc recorder, digital audio tape recorder, MP3, etc. – Digital recording devices and media carry an additional royalty to compensate for home recording. – Computer hard drive is not a “digital music recording” because objects in which one or more computer programs are fixed are exempted from AHRA (1001(5)(B)(ii).

17 17 Dispute provides licensed MP3 files to download for RIO and other MP3 players. adds “” allowing members to log in and recreate their CD collections online - for use anywhere. Members can ‘beam’ their CDs to MP3 for verification. MP3 already has the music converted and on file.

18 18 Why Did take the Legal Risk? Strategic decision to force public negotiations/dialogue. Publicity: (Yahoo Financial News quoting – “[] offers songs no one wants through a technology it doesn’t own. Its market: anyone bored enough to rummage through the offerings of more than 30,000 artists in the hope of finding the next Celine Dion.” Perhaps the unlikely chance of a sympathetic judge? – Is the description of that different from: “YouTube is a video dumpster for a disorganized bazaar of images.” Washington Post July 25, 2006 Settlement contract:

19 19 Webcasting Online radio stations have to follow the same rules as terrestrial radio stations plus: – Additional royalties to performers. – Limits on advanced announcement of songs. – Limits on number of songs from the same album and same artist during a finite period of time. – Those who comply have access to all public music. Not many webcasters have survived. – Current webcasting information available at the Radio and Internet Newsletter: Ever use Pandora?

20 20 Podcasting A podcast is an online audio or video file easily transferred to another device. Popular podcasts are created by individuals and by radio stations. They may contain music, discussions (NPR), or other content. Use of music may require two licenses: – Performance rights for the composer’s work. – License to play the performer’s version of the work. – Synchronization license required if images are shown with music. Statutory web casting royalty scheme not available. Additional licenses may be required for images & videos.

21 21 Trademarks

22 Client Theme Revisited Eli and Jason have developed an iPhone case, the ‘Retro-Cozy Case Beta,’ which is a surprising hit on Etsy. Following their success with the case, they develop a nostalgic phone App. They use “Eli’s Cases” as their brand. 22

23 23 Trademark: Definition A trademark is a word, name, symbol, or device used to identify and distinguish the source of goods. Focus is on consumer protection. Rights are derived from use in commerce and enhanced by registration. 15 USC 1051

24 24 Who are Trademarks Designed to Protect? Trademarks are for consumers’ benefit. Help distinguish source of goods or services. Provides consumers a way to ensure consistent quality. Trademark holder has a right to prevent consumer confusion

25 25 Trademark Holder’s Other Rights To prevent the appearance of affiliation, connection, association, or sponsorship. To prevent misrepresentation of the nature, characteristics, or quality of goods or service. » (15 USC 1125 (a))

26 Infringing Linkedin Profile Avepoint case discussion 26

27 27 Trademark Fair Use - Registration does not Confer Absolute Rights. TM law seeks to protect consumers, not provide registrant with a monopoly of the English language. Descriptive terms are not protected unless they acquire secondary meaning. (Park n Fly). (Secondary meaning does not automatically mean dilution). Parody and commentary is protected by 1st Amendment ( Comparative advertising in encouraged in the U.S., but not worldwide. Often restricted to category of goods and services. Malted Barbie

28 28 Trademarks Online Potential areas of controversy: Domain names Meta-tags and key words. Brand names mentioned within the site. – Attribution – Bait and switch Words hidden within the site.

29 29 Online Definitions Domain names: – Unique Internet addresses which can be numeric (123.456.123.12) or alphanumeric ( – Registrars listed at Top Level Domains : ‘.com,’ ‘.edu,’ ‘.us,’ etc. Meta tags / Key words: – Meta tags are part of the HTML (hypertext markup language) which is not visible within the web site without viewing the source code. – Bing uses meta tags as part of its search result algorithm. – Other search engines may be sensitive to ‘invisible ink.’ – Key words are search terms that trigger advertising within a search engine.

30 30 Online Definitions (cont’d) ICANN: Internet Corporation for Assigned Names and Numbers. – Non-profit organization for domain name system management and other related functions. – Took over for government contractors. – Sometimes controversial (but it is hard to keep everyone happy!) Whois: database of domain name registrants:

31 31 Hidden Text within a Site Meta tag example. – Search term example ( 191059834290 221366130028

32 32 Common Domain Name Disputes: Cybersquatters Multiple trademark holders, but one ‘.com’ available. Generic terms ( Misspelling of trademark ( Acronyms (Computer Design Services = Parody, criticism, and “sucks” sites ( Famous names (including fan sites) Reverse Cybersquatting - corporation that was late sues lawful registrant.

33 New Top Level Domains Thousands of new generic top level domains on the way: –.bike,.clothing,.guru,.holdings,.plumbing,.singles,,.equipment,.estate,.gallery,.graphics,.lighting, as of last week. Companies can apply for TLDs for $185,000 each. Google applied for 101,.cloud 33

34 34 Domain Name Controversy Client owns “” and used it as an e-mail server since 1994. Recently used for club listings in the New York area. Winner Holdings PLC, makers of “The Club,” want client to cede ownership. Sends clients a strongly worded e-mail, followed by a threatening letter

35 35 Domain Name Controversy (cont’d)

36 36 Solution They acquire “”

37 37 New Problem - Ever hear of Club Magazine? Adult magazine “club” claims that the public associates the term with their magazine:

38 38 Why Are Domain Names So Significant? No comprehensive directory of web addresses, so consumers often guess the domain name. Over 100 domain names registered - not too many good ones left! (Source: WIPO) Top level domains, aside from ‘.com’ have not attracted the same degree of prestige or attention. Domain names have sold for over $1 million. High profile sales ( : –$3,000,000 –$1,000,000 – $835,000

39 Domain name Sold in 1997 for $150k Resold in 1999 for $7.5 million Resold in 2007 for $345 million Purchaser files for bankruptcy in 2009. 39

40 40 Many Domain Names are Still Valuable expensive-domain-names-of-2012-2012-12

41 41 Online Trademark Lawsuit Toolbox Causes of Action: Federal and State Trademark infringement (likelihood of confusion) - same product class. Federal and State Trademark Dilution - Blurring / Tarnishment - any product class. State and federal unfair competition. Federal Anti-cybersquatting statute ICANN dispute resolution procedure.

42 42 Anti-Cybersquatting Consumer Protection Act Remedies: – Potential damages for domain names registered after 11/29/99 (and perhaps prior – Sporty’s). – In rem jurisdiction where domain name is registered. – Domain names of a living person registered for profit and without consent

43 43 Trademark Cyberpiracy Prevention Anti-cybersquatting Consumer Protection Act 15 U.S.C. §1125 (d)(1) - A person shall be liable in a civil action by the owner of a mark if… – bad faith intent to profit from the mark and – registers, traffics in, or uses a domain name that: Identical or confusingly similar to a mark. Identical, confusingly similar or dilutive of a famous mark… – Damages from $1,000 to $100,000. – Http:// S. 1948 Intellectual Property and Communications Omnibus Reform Act of 1999

44 44 ICANN Dispute Resolution Policy Effective for: – Domain name dispute under the primary top level domains (.com,.net,.org.,.edu., etc.). – Jurisdictions and registrars that adopt the ICANN policy. – Including names not in commerce. – Allows ‘in rem’ proceeding. (Porsche 51 F. Supp. 2d 707). – Does not allow suspension of a name during the dispute. – Must prove similarity with trademark; establish that there was no legitimate interest and prove bad faith. »

45 45 Domain Name Dispute Resolution is Unpredictable and Potentially Biased Approximately 85% of complainants prevail in arbitration (ICANN statistics): – Many do not even respond to the arbitration notice. – Others quickly cede their domain names without a dispute. – Some settle before the parties arbitrate. Biased toward trademark holders. Decision can be appealed to a court of competent jurisdiction.

46 46 Trademark Disputes Cybersquatter goes to Jail Electronics Boutique v. Zuccarini - Cybersquatter made a significant profit from affiliate advertisements on his site. Court awarded landmark damages. – S.151 – Child Abduction Prevention Act - outlaws misleading domain names

47 47 Search Engine Keywords Can Google auction ‘Rosetta Stone’ trademarks as keywords? – Rosetta Stone Ltd. v. Google Inc. (Case No. 09cv736, E.D. Va., 8/3/10) Rosetta Stone Ltd. v. Google Inc Google keyword program:

48 48 Trademarks: Registration No registration is required but…. – Federal registration allows you exclusive nationwide use of a name within a product class. – State registration provides additional causes of action against infringers. – Registration provides notice to anyone trying to use the name in the same product class. – For info on registering domain names as TMs -

49 49 Patent - Scope “Any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” 35 U.S.C. § 101 Articles of Manufacture Machines Compositions of Matter Processes n Ideas n Scientific Principals n Methods of doing business n Natural Substances Types of work protected:Not protected:

50 50 Patentable subject matter Novelty Utility Non-obviousness Lots of capital Requirements for a valid patent

51 51 U.S. average: >$10,000 – 97% of patents generate less revenue than the cost of filing the patent. Japan: $14,000 European Union (8 states): $44,000 – 25% of the cost is for translation fees. (Costs include legal fees) Filing Patents Can Be Expensive

52 52 Early cases held that an algorithm is like a law of nature, which cannot be the subject of a patent. Later cases recognized patents which contained algorithms. The State Street algorithm case opened the flood gates for Internet related patents by raising awareness and affirming their validity. Bilski gutted most of State Street in 2010, but left the door open for the registration of intangible technology beyond the ‘machine or transformation’ test. – “Software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals.” – Must not be too abstract. Computer Related Patents are Relatively New

53 53 Internet related patents went from 433 in 1997 to 3,512 in 1999 and over 5,000 in 2000. Some of the obscure patents occasionally threaten to impact online activities. IBM earned more than $2 billion in patent licensing in 2014. The pace of registration may have slowed with fewer companies playing in the same arena. Companies were on Patent Registration Frenzy

54 54 “Method and apparatus for a cryptographically assisted commercial network system designed to facilitate buyer-driven conditional purchase offers.” In other words:’s business model for reverse auctions. Is this novel or non-obvious? Patent # 5,794,207

55 55 “Information handling system and terminal apparatus therefor. A central computer means in which plural blocks of information are stored at respectively corresponding locations, each of which locations is designated by a predetermined address therein by means of which a block can be selected.” British Telecom v. Prodigy – hyperlinking. Dismissed. Other Patents Claimed to Threaten the Internet as We Know It (4,873,662 - 1989)

56 56 One click shopping (Amazon) Reverse auctions (Price Line) Online music sales (Sight Sound) Internet coupons (Cool Savings) Online auctions (E-bay) Video downloading (adult & other sites) What other patents are dormant but could disrupt e-commerce? Online Patent Disputes

57 57 Patent owner who enforces patent rights but doesn’t actually manufacture the patented product (or service). Some emerged by buying patents during the dot com bust. Often send an offer for a nuisance level license fee. Threat of injunction pushed settlement. Non-Practicing Entities

58 58 Supreme Court Reiterated Injunction Standard for Patent Infringement Plaintiff must demonstrate: – It has suffered irreparable injury; – Remedies at law are inadequate; – The balance of the hardships weigh in favor of permanent injunction; – Public interest would not be disserved by permanent injunction. eBay vs. MercExchange

59 Are Electronic Medical Records Patentable Subject Matter? Mymedicalrecords case discussion What is the Mayo Test? What is required to pass the second part of the test? What was the Court’s decision?

60 60 Online Patents: Next Steps Technology patent parameters are still evolving. – eBay case gave some justices a forum to complain. Be aware of patent issues when advising clients to help them: – avoid infringement – protect a novel, unique process Patent suits can cost millions to defend – even for a weak claim.

61 Questions & Answers

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