Technology Continues to Test The Bounds of Copyright Law

The Internet is an unprecedented source of disruption. From retail services (e.g. Amazon) to media and entertainment, almost every industry has been forced to rethink its business model due to the accessibility, ubiquity and democratizing force of the Internet. Aereo was positioned to disrupt the traditional media distribution model by giving consumers greater control over what were otherwise “free” over-the-air transmissions.

The Aereo service was premised on the idea that consumers should be able to watch and record over-the-air broadcast television programming via the Internet. Major broadcast networks that owned the content made accessible through Aereo challenged the model on the grounds that Aereo was violating the exclusive “public performance” right guaranteed by the Copyright Act.

Copyright law provides copyright owners six exclusive rights. One of those rights is the exclusive right to publicly perform the copyrighted work. Because this right is a statutory construct, one must look to the statute to determine its meaning. To “perform” and to perform “publicly” means “to transmit or otherwise communicate a performance or display the work to a place … or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”

While many reacted by asking whether the case would stifle innovation and have a chilling effect on start-ups, this case does highlight the increasing tension between technological advances and copyright law.

From a practical standpoint, one need not be alarmed about the impact of the decision on most types of innovation. For one thing, the Court went to some lengths to craft a reasonably narrow decision, which applies only to broadcast TV retransmitted over the Internet.

As with any type of innovation, there are different types of risk. On the one hand, there is technology risk: the risk that whatever technology is necessary for some business plan simply won’t work. On the other hand, there is legal risk, highlighted by the Aereo decision: the risk that the entrepreneur’s interpretation of some act or case law won’t ultimately prevail. That’s what happened to Aereo.

As an IP lawyer, I am somewhat perplexed. It is hard for me to understand why Aereo made such a bold move. However, at least the district court agreed with Aereo’s interpretation.

Contracts for Interior Design Professionals

This crash course on legal contracts is designed for interior designers who are drafting a contract for the first time or wanting to make an existing one airtight.

There’s a reason you became a designer, and it probably didn’t have anything to do with lawyers and contracts.

You’re the expert in color, fabric, floor plans, and furniture schemes, not intellectual property and arbitration provisions. If you’re already confused, don’t fret. This crash course is designed for those drafting a contract for the first time or wanting to make an existing one airtight. Led by David Adler, an actual lawyer who understands the ins and outs of the design industry, this workshop will cover the clauses you need to protect yourself in the unfortunate event that something doesn’t work out as planned. Clients can be difficult enough. Don’t let legal trouble slow you down.

In this class, you will learn how to:

  • Define what you are doing for your client, as well as NOT doing for them
  • Make sure you get paid on time and in full
  • Protect yourself against outside factors that may affect cost and ability to complete a project
  • Give yourself a way to get out of your contract if things aren’t working

By the end of class, you will have:

  • A basic understanding of key contract terms and the reasons as to why they are there
  • A basic client agreement that you can use or customize

The Instructor, David Adler, is an attorney, nationally-recognized speaker, and founder of a boutique law practice focused on serving the needs of creative professionals in the areas of intellectual property, media, and entertainment law. He provides advice on choosing business structures, protecting creative concepts and ideas through copyright, trademark, related intellectual property laws and contracts, and structuring professional relationships. He has 17 years experience practicing law, including drafting and negotiating complex contracts and licenses with Fortune 500 companies, advising on securities laws (fundraising) and corporate governance, prosecuting and defending trademark applications, registrations, oppositions, and cancellations before the US Patent & Trademark Office (USPTO), and managing outside counsel. Currently recognized as an Illinois SuperLawyer® in the areas of Media and Entertainment Law, he was also a “Rising Star” for three years prior. He received his law degree from DePaul University College of Law in 1997 and a double BA in English and History from Indiana University in Bloomington, Indiana. Outside the practice of law, David is an Adjunct Professor of Music Law at DePaul College of Law, formerly chaired the Chicago Bar Association’s Media and Entertainment Law Committee, and is currently a member of the Illinois State Bar Association Intellectual Property Committee.

Do you work with start-up companies and need a basic understanding of the various intellectual property issues that can arise?

I will be co-presenting in this online seminar that will help you:

  • understand the trademark and copyright problems your client may encounter with branding;
  • learn how to protect your client’s branding once established;
  • familiarize your practice with patents, including what they protect, timing, and strategies to prevent inadvertent loss of patent rights before filing the application;
  • understand trade secrets and the importance of non-disclosure and confidentiality agreements;
  • recognize intellectual property issues relating to technology, including open source code and the cloud;
  • establish a proactive approach toward intellectual property ownership between cofounders, employees, and vendors; understand business names, domain names, promotional issues, and website content concerns.

The program qualifies for 1.5 hours MCLE credit.

I would like to personally invite you to attend the upcoming Law Ed program titled, “Identifying Intellectual Property Issues in Start-Ups,” which I will be co-presenting via live webcast on Tuesday, May 27th.

Presented by the ISBA Business Advice and Financial Planning Section

Co-Sponsored by the ISBA Intellectual Property Section

Privacy Law Update: California “Do Not Track” 

Two California laws went into effect at the beginning of the year that  require additional notifications to consumers.  The California Online Privacy Protection Act (“CalOPPA”) requires that web sites, mobile apps and other online services available to California residents (in reality anyone with a web site that may be accessed by a CA resident) post a privacy policy that gives notice to consumers regarding behavioral or interest-based advertising practices (“OBA”).

Disclosures must explain:
1. If a web site operator allows other parties to use tracking technologies in connection with the site or service to collect certain user data over time and across sites and services; and
2. How it responds to browser “do not track” signals or other mechanisms designed to give consumers choice as to the collection of certain of their data over time and across sites and services

In addition, the “California Shine the Light Act” requires that companies (except non-profits and businesses with less than 20 employees) collecting broadly defined personal information from California consumers on or offline either: (a) give consumers a choice as to the sharing of that information with third parties (including affiliates) for direct marketing purposes; or (b) provide notice of, and maintain, a method by which consumers can annually obtain information on the categories of information disclosed the names and addresses of the recipients of that data, and a description of the recipients’ business.

If an e-commerce service offers tangible goods or services, or vouchers for them, to California consumers, it must give certain notices to consumers, including how they can file a complaint with the CA Department of Consumer Affairs.

Are you  concerned about how to disclose how your service responds to “Do Not Track” signals or similar tools and settings, and whether third parties are permitted to collect personally identifiable information about consumer online activities over time and across different websites when a consumer uses that online service? We may be able to help. We can review your policies, your information gathering and sharing practices, and advise on whether there is room for improvement.

Please contact us for a no-fee consultation.

One of the key issues that must be examined when negotiating or drafting any contract is how the parties may get out of, or “terminate,” that contract. While many attorneys will rest on standard “termination for breach with notice and cure” language, the recent case of Powertech Tech. v. Tessera, Inc. demonstrates how artful drafting can put limitations on a party’s right to terminate. The Opinion in U.S. District Court for the Northern District of California case No. C 11-6121 can be found here.

Powertech and Tessera were parties to a patent license agreement, although the court’s reasoning does not seem limited to only those types of agreements. The license agreement allowed Powertech to use Tessera’s patents in exchange for payment of license fees.

The contract contained the following clause regarding termination for breach:

“Termination for Breach. Either party may terminate this Agreement due to the other party’s breach of this Agreement, such as failure to perform its duties, obligations, or responsibilities herein (including, without limitation, failure to pay royalties and provide reports as set forth herein). The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof.”

The court held that Powertech was not permitted to terminate a license agreement with Tessera for Tessera’s breach because Powertech itself was in breach of the agreement by its failure to pay royalties to Tessera.

Acknowledging Powertech’s argument that Tessera was itself in breach, that in and of itself did not give Powertech the right to terminate the contract. Only a “non-breaching” party may terminate the agreement. Said the court “[a]lthough the first sentence of the termination clause is broad – ‘Either party may terminate this Agreement due to the other party’s breach’ — the language of the clause as a whole makes clear that only a non-breaching party may terminate. Reading the clause as a whole, the court concluded “[t]he termination clause refers to a “breaching party” and a “non-breaching party” in every sentence after the first… [therefore]…the clause requires the party seeking to terminate for the other party’s purported breach to be substantially in compliance with its own obligations first.

The Powertech agreement’s termination clause is useful because it put conditions on a party’s ability to terminate the agreement even when the other party was in breach.

At the end of August, the California passed an amendment to the California Online Privacy Protection Act that will require commercial websites and services that collect personal data to disclose how they respond to Do Not Track signals from Web browsers.

AB 370, as introduced by California Assemblyman Al Muratsuchi, requires a business that discloses a customer’s personal information to a third party for direct marketing purposes to provide the customer, within 30 days after the customer’s request, as specified, in writing or by e-mail the names and addresses of the recipients of that information and specified details regarding the information disclosed.

This bill, available here, would declare the intent of the Legislature to enact legislation that would regulate online behavioral tracking of consumers.


A presentation on what goes into creating original designs and how these differ from copycats.

WHERE: Decoration & Design Building, J. Robert Scott Showroom, Suite 220

WHEN: Wednesday, October 2,2013 !2 p.m.

WHAT: From film to fashion, creative industries are taking steps to protect and promote original work. Designers and manufacturers need to know what steps they can take to protect their designs, their businesses, and their profits. The discussion will address issues related to how to protect original design (copyright & design patent) and the manufacturers (trademark, unfair competition).

WHO:

INTERIORS Magazine Editorial Director Michael Wollaeger

J. Robert Scott Founder Sally Sirkin Lewis

Designer Laura Kirar [Web Site]

Intellectual Property lawyer David Adler

Showroom reception to follow.

 

Download the full Fall Decoration & Design Building Market Brochure Here.

Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., Fed. Cir., No. 2012-1221, 8/13/13

On August 13, 2013 the Federal Circuit held that litigation misconduct and unprofessional behavior may be sufficient to meet the “exceptional case” standard under 35 U.S.C. §285 for an attorney fees award of $9 million.

Relying on Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005), the court clarified that “it is only absent litigation misconduct or misconduct in securing the patent that we require the finding of both ‘bad faith’ and ‘objectively baseless’ litigation to warrant sanctions under §285.” In this case, the district court did not err in awarding attorney fees for the entire litigation because Defendant’s “extensive misconduct was enough to comprise an abusive ‘pattern’ or a vexatious ‘strategy’ that was ‘pervasive’ enough to infect the entire litigation.”

As a result of the rapid shift in marketing from unilateral one-to-many communications, to the multilateral, many-to-many or many-to-one conversations enabled by Social Media, employees and employers are struggling to manage accounts that are used for both work and personal purposes.

This new phenomenon has benefits, but it also creates a number of legal challenges. For employees, it may result in greater efficiency, more opportunities for authentic customers engagement and the ability to stay on top of the most current grands and business issues. For employers, it presents opportunity to reap substantial benefits from lower communications and customer support costs. For in-house counsel, it raises a host of legal and practical issues with few easy solutions and significant liability and regulatory risks.

First, there are hardware issues. Smartphones, tablets and other personal electronics often have social networking capabilities built in. in addition, they contain contain both personal and business data. Because these devices are always on and always connected, they are more than just personal property. They have become essential business tools. For both sides of the workplace equation, employers and employees must understand where the privacy lines fall between personal versus work-related information.

Second, there are data issues. Employers must balance their needs to monitor employee usage, employees’ privacy concerns, and the risk of liability for theft or exposure of data if a device is lost or stolen, or from lack of proper safeguards on account usage. For in-house counsel tasked with drafting policies to address these risks, , Prior to implementation of any policy, the legal team needs to educate front line employees and management on reasonable expectations of privacy and security and the harms that the organization seeks to prevent.

Lastly, recent cases such as the Cristou v. Beatport litigation, highlight the struggle to define and control the beginning and end of employee social media accounts, ownership and protection of intellectual property and the post termination risks that arise from the absence of appropriate policies.

As we prepare to start a new year, the time is ripe to establish security and privacy policies governing creation, maintenance and use of employees’ social media accounts for work functions. In-house counsel must lead the charge to educate, inform and train employees about privacy, security and evidence-recovery implications associated with use of social media.

German cybersecurity agency prods users to ditch IE

Computerworld – Germany’s cybersecurity agency on Monday urged users to drop Internet Explorer (IE) and switch to a rival, like Chrome or Firefox, until Microsoft patches a new critical bug in its browser.

Democratic senators call for ‘cybersecurity’ executive order
CNET

Senators call for ‘cybersecurity’ executive order. This summer’s partisan sparring that derailed a federal cybersecurity law has resumed, with Democrats proposing an executive order and Republicans saying it would levy “more mandates.”

Cybersecurity scholarships to be offered
UPI.com

“The nation is in dire need of people who are capable of handling the cybersecurity challenges we face,” professor of computing and information sciences Xinming “Simon” Ou said. “We are lagging behind in the number of experts we have versus the threats.

Cybersecurity: Kay Bailey Hutchison condemns Obama’s ‘heavy handed …
Houston Chronicle (blog)

Amid escalating partisan rhetoric over the bipartisan goal of protecting U.S. computer systems from terrorist attacks, Texas Kay Bailey Hutchison criticized President Obama for a “heavy handed, regulatory regime” that would be created.

National Cyber Security Alliance Announces Theme for Data Privacy Day
The Herald | HeraldOnline.com

18, 2012 /PRNewswire-USNewswire/ — The National Cyber Security Alliance (NCSA), a non-profit public-private partnership focused on helping all digital citizens stay safer and more secure online and official coordinator of Data Privacy Day (DPD), today …

When it comes to cybersecurity law, where do we draw the line?
ZDNet

Over the past few years, the Obama administration and Congress have taken a variety of legislative runs at creating comprehensive cybersecurity law. See Also: How cybersecurity is like Star Trek’s transporter.

Cyber security biggest challenge for universal credit, says David Freud
ComputerWeekly.com

Cyber security is the biggest challenge for the government’s universal credit roll-out, welfare reform minister David Freud has told a select committee. Speaking to a select committee, pensions minister Ian Duncan Smith said government had consulted …

NetLib teams with CIS to fight cyber security
Mass High Tech

Neil Weicher wants to win the battle in cyber security. NetLib, a Stamford, Conn.-based provider of encryption software founded by Weicher, has partnered with the Center for Internet Security, a non-profit focused on cyber security readiness.

UK spy agency tests Britons’ cyber skills
Reuters

The Government Communications Headquarters (GCHQ) said those aged 16 or over and not already working in cyber security could apply to test their ability to guard a computer network but only 150 contestants at most would be eventually allowed.

Former FBI Cybersecurity Official Steven Chabinsky Thinks FBI is Doing Great …
ticklethewire.com

The FBI’s former top attorney for cybersecurity, Steven Chabinsky, who stepped down this month, thinks the FBI is doing a great job battling the problem, but told the Washington Post that the “federal government” has taken a “failed approach”.

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