On September 24, 2013, US District Judge Rodney Gilstrap of East Texas ����������’s , filed two years ago in 2011, as a defendant-intervener in the action against Apple’s app developers for alleged patent infringement. In the , Lodsys claimed that small-time iOS app developers were infringing the firm’s patents by using technology such as in-app purchasing and feedbacks surveys, without paying a licensing fee. In other words, Lodsys contended that it underlying some of the most basic app functions across mobile operating systems, namely iOS and Android.

Apple’s motion to intervene was recently dismissed on the grounds that the developers had already with Lodsys and as such, Apple’s arguments were moot. However, the arguments may still be made in a subsequent action, should the occasion arise. Apple had also filed an opposition to Lodsys’ motion to dismiss, which can be read .

The motion to intervene was right at the heels of Lodsys’ suit, back in 2011, against the app developers, who were understandably relieved to have Apple's support in the litigation. Prior to Apple’s attempt at intervening, Senior Vice President and General Counsel Bruce Sewell sent an usually detailed to the CEO of Lodsys, Mark Small, outlining the lack of merit in the latter’s claims against Apple. While the letter did not prevent Lodsys from commencing litigation, it clearly expresses the tech industry's position with respect to patent infringement litigation commenced solely for pecuniary ends.

It is not surprising that Sewell might have wanted to say a little more than required to Lodsys in his letter. Lodsys is based in East Texas, which is a jurisdiction now infamous for rulings friendly to “.” These shell-companies do not create any products. They exist solely to threaten patent litigation in hopes of a quick and relatively low settlement by targeting companies that will pay out to avoid protracted litigation. In addition to Apple, Lodsys has also brought patent infringement actions against��, , and most recently, (“Martha Stewart Living”), amongst . Patent trolling has become an effective means to a fast settlement.

In Canada, patent trolls are few and far between, but (“Dovden”) is already a name that might make a developer shudder. Dovden has filed 32 lawsuits in Canada just this year. Recently, Dovden withdrew a suit against a bus app developer originally filed at the Federal Court demanding $10,000 in licensing fees. Perhaps the Federal Court has less of a stomach for such claims. In the United States, Vermont has enacted legislation to address the issue of patent trolling - Bad Faith Assertions of Patent Infringment. (For more information on this patent trolling legislation, see my article .) In Canada, however, no legislation yet exists to address this emerging issue, although sanctions do exist for bringing meritless claims.

While Apple is temporarily out of the arena, Martha Stewart Living, as mentioned above, has joined the fight against Lodsys, which claims that the Martha Stewart Weddings iPad app infringes its patents. Martha Stewart Living has filed a �� and will be taking the battle home to East Texas, where it all began. Furthermore, Lodsys’ bark might be worse than its bite. When faced with the possibility of real litigation on potentially meritless claims, Lodsys opted to ��in the suit against Kaspersky Lab.

Ying Cheng is an IPilogue Editor and is in the BCL/LLB program at the McGill Faculty of Law in Montreal, Canada.

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Specifically, Lee is in a legal battle with the ��in Alabama; a non-profit that has maintained a long-standing exhibit dedicated to Lee and her novel, whilst also selling merchandise tied to the novel in its gift shop.

Why is Lee Fighting for Her Own Book Title?��

On September 12, 2012, Lee filed an for the title of her literary work. Based on Lee’s filing with the , the trade-mark would be used for “clothing for men, women and children, namely T-shirts, hats, jackets." Per procedure, the trade-mark was , following��the initial application. Opposition is a��process that allows any party that believes it may be damaged by the pending trade-mark registration to contest the filing. It would seem unlikely that any party could contest Lee’s claim to an original title to her own novel which, in itself, is an entirely fictional account set in a fictional town in Alabama. However, during the opposition stage, the Monroe County Heritage Museum made itself known by doing exactly that. The against Lee’s registration occurred on August 19, 2013. ��Essentially, the Monroe County Heritage Museum asserts that it has a better claim to the mark because it has been using it since 1995, that customers associate the brand with the museum, and that Lee’s registration and usage to produce her own merchandise would damage the “distinctiveness, uniqueness, effectiveness and prestigious connotations” of the museum’s brand and merchandise.

Trademark, Copyright, or Door #3?

Why can’t Lee just register or copyright the book title? Per U.S. trade-mark law, under the , titles of literary works in themselves may not be registered as a trade-mark unless they are in a series, such as the “Chicken Soup for the Soul” collection or the “For Dummies” do-it-yourself books. Lee had no recourse under U.S. copyright law either, because the ��does not consider book titles to be intellectual property. As set out in , copyright law does not extend protection to “idea, procedure, process, system, method of operation, concept, principle, or discovery” per se.����published by the U.S. Copyright Office further explains the limitations of copyright protection with respect to names, titles and short phrases. As such, Lee could neither copyright the title nor register a trade-mark, as the novel is not part of a series, but in fact, the sole creative work published by Lee in her lifetime.

To add to the author's legal woes, until a few days ago, the 87-year-old Lee was involved in a separate ��against her former literary agent and other named defendants for allegedly depriving her of book royalties. The case was .

Would Lee Have Better Luck in Canada?

Perhaps a few years ago. In Canada, owners of intellectual property may register a book title as a trade-mark only if the mark is��not��“clearly descriptive” per����of the Trade-marks Act, meaning that the mark must convey��something more��than subject matter or content. ��As such, one may argue that��To Kill a Mockingbird, as a book title deeply entrenched in symbolism and metaphor, surpasses the “clearly descriptive” threshold because one would have little idea of the book's content or subject matter from the title alone. However, in����(2009 FC 17), the Federal Court, by denying the defendants relief on an alleged trade-mark infringement relating to the title of a book, appears to have set a high threshold for deeming a book title to be��not��“clearly descriptive” so as to convey subject matter or content. Indeed, Justice de Montigny opined that the title of a literary work is “inherently descriptive,” which begs the question of whether any other case involving book titles may be able to surpass the content or subject matter threshold in s 12(1)(b),��or whether Canadian trade-mark law has effectively aligned itself with legislation in other common law jurisdictions by shutting out legal protection for book titles.

In this matter, Lee may be in need of her own Atticus Finch to set things right.

Ying Cheng is an IPilogue Editor and is in the BCL/LLB program at the McGill Faculty of Law in Montreal, Canada.

Editor's Note (25/09/13):��The last paragraph, under the heading "Would Lee Have Better Luck in Canada" was updated to correct a mischaracterization of s.12(1)(b) of the Trade-Mark Act.

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Facts and Findings

In 2007, Virgin Atlantic Airways Limited (“Virgin”) began proceedings against Zodiac Seats UK Limited (“Zodiac”) to recover damages exceeding £49 million (roughly $775 million CAD).�� The English courts held that Virgin’s patent was valid and had been infringed. ��Subsequently, the EPO found the infringed claims were invalid by reason of prior art and accepted proposed amendments by Virgin to remove these claims from the patent. As such, following the amendment, Zodiac argued that it no longer owned the sum alleged by Virgin, or any sum at all, as the registered version of the patent was no longer valid. ��As the issue was put forth by the Court: “The fundamental question is whether Zodiac is entitled to contend upon the enquiry as to damages that there have been no damages because the patent has been retrospectively amended so as to remove the claims held to have been infringed” ().��


In short, Zodiac argued that, following the EPO’s decision, Virgin was claiming infringement of patent claims��that no longer existed.�� At the Court of Appeal, the reasons cited a long line of case law (including and ) in order to apply the principle of res judicata. By doing so, that court found that, notwithstanding the retroactive effect of the Technical Board of Appeal's ("TBA") finding, the same parties and/or their privies were estopped from re-litigating the same cause of action (i.e. cause of estoppel) or issue (i.e. issue estoppel), in the interest of fairness and efficiency.


To even the casual observer, it is not surprising that one party may not claim a patent infringement against another in any jurisdiction if said patent does not exist.�� Indeed, it seems that such a claim would be frivolous and baseless.


Now, here’s the twist. Under the authority granted to the EPO, per the (“EPC”), a patent that is valid today may be held to be invalid a number of years down the line, as was the case with Virgin’s patent. ��As such, a finding by the TBA that a patent is invalid operates both retroactively and prospectively for all UK patents.�� In the UK, the provisions of the EPC are given effect in the . Due to the legal regimes related to these entities, the EPO and the UK courts manifest "parallel jurisdiction" with respect to the statutory and normative framework governing patents.��


In Virgin v Zodiac, the UKSC held that Virgin’s patent on airplane seats, which was approved in 2007, is to be considered invalid retroactively, from the day it was registered, thus rendering any claims for damages from infringement on that specific patent baseless.�� Relying on the statutory framework governing patents, the UKSC held that Virgin’s alleged patent, in its previously registered manifestation, had been deemed to have never existed by the TBA and thus could not be infringed: “The revocation of the patent deprived the patentee of the rights which the patent had bestowed on him as against the world; furthermore, it did so retrospectively. In other words, the effect of the revocation was that everyone was entitled to conduct their affairs as if the patent never existed” ().


Impact

In Canada, the ��governs the issuance and��validity of patents.�� Furthermore, patents issued under Canadian jurisdiction are not subject to��parallel jurisdiction, contrary to the��Virgin v Zodiac litigation.�� As such, it is unlikely, in my��opinion, that the decision will have a significant impact on the strategy and timelines relevant to Canadian patent litigation.


In the UK, however, current and future litigants with applications for both the court and the EPO��will likely need to revise their strategy following the Virgin v Zodiac decision.�� Specifically, plaintiffs alleging patent infringement may��need to tread carefully with respect to temporary injunctions.�� Generally, EPO hearings take years, while court cases are resolved between 12-18 months, with additional time for potential��appeals.�� As such, if a plaintiff requests a temporary injunction pending an EPO case, the��defendant is more likely to go out of business before a plaintiff can even collect damages, as the defendant will be unable to profit from the process or product upon which the patent is based.����Furthermore, from the perspective of courts and��regulators, the disconnect between EPO hearings and court proceedings will likely need to be��addressed to prevent conflicting holdings in the future.


That said, the Supreme Court by applying an EPO decision to overrule a Court of Appeal holding has, in my opinion, set a clear precedent with respect to how conflicting decisions in co-pending EPO and court proceedings should be undertaken in the future. Some have this precedent as being a waste of resources to have rulings by qualified patent judges overturned when in conflict with decisions from the EPO, as the latter undertakes a significantly less rigorous investigation with respect to the law and facts of a case than judges do.


It is unclear as to��how the EPO’s involvement in patent disputes��improves or facilitates resolution.�� In my opinion,��a potential solution may be to simply eliminate the parallel��jurisdiction held by the courts and the EPO, leaving the UK courts to interpret the statutory framework and international norms governing patent infringement.�� Such an approach would facilitate access to justice, fairness and efficiency –the triumvirate of principles underlying a reasoned approach to legal resolution.

Ying Cheng is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

The post Now You See It, Now You Don’t: Patent Litigation After Virgin v Zodiac appeared first on IPOsgoode.

Synopsis of the Law

The new law, , or Bad Faith Assertions of Patent Infringement, is to be codified at 9 V.S.A. § 4195-4199. It is the first piece of state legislation in the United States that cracks down on patent trolling. ��of patent trolling is “the practice of making deceptive claims of patent infringement in the hopes of collecting licensing or settlement money.” Simply put, patent trolling means alleging patent infringement against an individual or business for the purpose of extorting money, where a legitimate case is not likely to exist. The new law is an amendment to the state’s ��which is, arguably, a quiet way to introduce a patent law without seeming to encroach on federal jurisdiction.��How does the new law work?�� It basically sets out a list of guidelines for judges to determine whether an assertion for a patent is legitimate or illegitimate. For example, to weed out bad faith assertions, a judge may consider whether the claimant is demanding too quick a response or too much money, or whether the potential litigant is making meritless assertions with little factual basis. Conversely, a judge may find that an assertion of patent infringement is legitimate if the claimant is the original inventor or if the individual has successfully enforced the patent in a different court. In lieu of providing hard and fast definitions, the new law essentially sets out a list of factors against which a court might assess the particulars of a case to see whether the allegation is being made in good faith.

Question of Authority – The Limits of Federalism

One of the more debated issues is whether Vermont has legal authority to regulate patent activity. On the one hand, Vermont is stepping right into federal jurisdiction. That is, due to federal pre-emption laws, states are not allowed to enact their own patent laws. As such, Vermont’s new law may be struck down in its nascent stage.�� Furthermore, the new law is arguably not entering uncharted territory either. Congress has already taken significant steps with cracking down on patent trolling at the federal level by introducing additional bills such as the , the and the .�� Simply put, if Vermont’s new law oversteps its boundaries and overlaps in purpose or effect, it may have a challenge ahead in terms of establishing its legitimacy. On the other hand, it could also be argued that the new state law fills a gap that has yet to be addressed in the existing federal legislation. Legal scholar Camilla Hrdy takes this route in suggesting that the does not directly address threats from “patent trolling” by Patent Assertion Entities (PAEs) and that the Federal Circuit has sanctioned “baseless” lawsuits in the past which indicates a potential need for a tighter net, perhaps at the state level. She argues that while federalism may benefit patent law to a certain extent, states must also be given enough autonomy to “use state law to grow local innovation ecosystems, like California has with Silicon Valley.” In short, the new VT law has created at least two distinct camps: one side seems to champion a traditional approach through federalism, whereas the other side proposes an alternative vision of federalism that is, arguably, closer to a bottom-up approach to anti-patent trolling law.

A Canadian Perspective

How might such a situation play out in Canada, which has ? Federals courts do not have inherent jurisdiction, whereas provincial superior courts do, which may potentially give the latter lee-way to overlap in subject matter jurisdiction with the federal courts. Generally though, in Canada, like in the US, patent law is under the jurisdiction of federal power and cases are decided at the federal court level which has statutory authority to hear intellectual property disputes. from Canadian IP firm, MBM Intellectual Property Law, suggests that it is generally “” the effects of a state law in the IP sphere given the lack of precedent both in the US and in Canada. Tracy points out that a likely consequence will be that cease and desist letters will become more expensive to come by, going forward, in the state of Vermont. As such, potential litigants are likely to take more time at the front-end considering whether to enforce their rights. On the one hand, the law would likely disincentive frivolous and vexatious lawsuits; on the other hand, rights holders with bona fide claims will see the cost of litigation increase, contrary to Hrdy’s prediction, as previously discussed. What is certain is that industry players, academics and bloggers on both sides of the border will keep an eye on how the new Vermont law interacts with existing federal legislation as an indicator of the way in which similar legislation might play out in other provinces and states. In the meantime, happy hunting Vermont.

Ying Cheng is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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In the case, the court disposed of the remaining issues left undecided from the April 5, 2012, New York Court of Appeal decision that had most of Viacom’s case. Viacom had brought the appeal following a , which was also decided by Judge Stanton (see and�� for our previous posts on this case). ��Viacom had alleged that hundreds of thousands of unauthorized clips of its programming, such as SpongeBob SquarePants��and The Daily Show, were readily accessible on YouTube, thereby infringing its copyright. In the most recent decision, the 2nd Circuit District Court considered: (1) Whether YouTube had knowledge of the infringing activity; (2) Whether YouTube was willfully blind to the infringing activity; (3) Whether YouTube had the “right and ability to control” the infringing activity; and (4) whether YouTube could claim protection under “safe harbor” pursuant to Section 512(c) of the (“DMCA”). ��In sum, Judge Stanton found no copyright infringement on the part of YouTube with regard to any of the remaining issues.

Issue 1: Did YouTube have knowledge or awareness of any specific infringement?

On this first issue, Viacom was challenged to bring forth evidence that YouTube had actual knowledge of the 63,060 infringing clips-in-suit. Put another way, Viacom had to demonstrate not only that YouTube had general knowledge of infringing activity on its website, but that YouTube knew exactly which clips were infringing Viacom’s copyright. On this point, Viacom conceded that it did not have evidence to support knowledge of specific infringement. Viacom argued, however, that this did not matter as the onus would be on the defendant to establish each element of its affirmative defence, including lack of knowledge or awareness, if it wished to apply the statutory "safe harbor" defence. ��As such, Viacom reasoned, it would be unlikely that YouTube could demonstrate it had no knowledge or awareness whatsoever of infringement, given the high volume of copyright-infringing material uploaded daily onto YouTube. ��On balance, the judge held that Viacom’s argument was “extravagant” and that per Congress, the DMCA was enacted specifically to protect service providers from the very burdensome task of monitoring for infringing material uploaded by users.�� Judge Stanton held that it was both fair and reasonable, under the DMCA, to place the burden of identifying infringing material on the copyright owners and that Viacom failed in establishing specific infringement by YouTube.

Issue 2: Was YouTube willfully blind to specific infringements?

On this second issue, the court explained that the threshold for willful blindness depended on the particular law governing the factual situation. Specifically, for cases under the DMCA, the threshold for willful blindness and subsequent disqualification from “safe harbor” is blindness to “specific and identifiable instances of infringement”.�� In the case at bar, the court did not find that Viacom provided specific locations of infringement, thus leaving YouTube to find the infringing clips on its own. ��Under these circumstances, it could not be��said that YouTube was willfully blind towards infringing activity, pursuant to the “safe harbor” provision of the DMCA. The holding on this issue is nicely summed up in a footnote of the decision: “Plaintiffs often suggest that YouTube can readily locate the infringements by using its own identification tools. [YouTube] has no duty to do so.”

Issue 3: Did YouTube have the “right and ability to control infringing activity” per ��of the DMCA?

On this third issue, the court defines the ability to “control infringing material” as requiring “'something more' than just the ordinary power over what appears on the provider’s website.” ��As such, the fact that a provider may be able to remove or block access to material posted is not sufficient to meet the threshold of control set out in of the DMCA. The governing principle on the “right and ability to control infringing activity” is set out as follows: “Clear knowledge of the prevalence of infringing activity, and welcoming it, does not itself forfeit "safe harbor". To forfeit that, the provider must influence or participate in the infringement.” ��Under this governing principle, the court held that YouTube did not meet the threshold for “influence” or “participation,” in contrast to - the only case to date in which a service provider was held to have met the required “something more” by strictly controlling user experience on its website and refusing access to users who failed to comply with its instructions.

Issue 4: Did YouTube syndicate the clips-in-suit to a third party, and if so, did such syndication occur “by reason of the storage at the direction of the user” within the meaning of ��of the��DMCA, so that YouTube may claim safe harbor?

On this fourth and last issue, the court quotes YouTube’s brief in reasoning that “syndication agreements merely give users alternate ways to view videos that users have stored on YouTube’s system.” ��As such, the court held that syndication merely provides access to material uploaded by users and does not imply that YouTube manually selected the infringing materials delivered over mobile and other systems, thus allowing the service provider to claim protection of "safe harbor".

Conclusion

Does the��DMCA��tend to favour the service provider over the copyright holder? ��In my opinion, this most recent decision reflects a broader, ongoing struggle to protect the commercial value of artistic production while allowing service providers like YouTube a certain amount of lee-way to develop their platforms for users. Enacted in 1998 under the Clinton Administration, the DMCA was drafted to comply with the�� and the . ��The "safe harbors" provision is, arguably, one of the aspects of the DMCA. ��On the one hand, as outlined in the discussion in Viacom v Youtube, it allows for service providers to develop their platforms for third-party users without the overhanging risk of copyright liability. ��In this manner, user-generated content is given the space to flourish, hosted by various online platforms. ��However, the "safe harbors" provision can also place a tremendous burden on copyright holders to monitor these service providers for potential infringement of their intellectual property. ��Short of having round-the-clock staff monitor sites such as YouTube, it is likely that copyright infringement would occur on a regular basis. ��Perhaps it is too early to take a side, but as it now stands, under the DMCA,��copyright holders must do much of the legwork in protecting their creative productions.

Recent amendments to the����under ��("CMA")��have propelled Canadian IP legislation into the twenty-first century, as the last modification occurred in 1997.���� that the "enabler provisions" of the amended legislation, along with increased tightening of the digital locks provisions, could potentially have led to a different outcome for Viacom, had it been a Canadian case. ��Under the CMA, the service provider is liable for copyright infringement merely if it��"enables" copyright infringement, which��is a less onerous burden to meet for the copyright holder than that of "specific knowledge" of copyright infringement under the��DMCA.����On the other hand, the "enabler provision" under the��CMA��is being for encouraging innovation in digital products from the copyright holder's perspective.����Barry Sookman argues that these new amendments, which are in line with WIPO Treaties standards, will allow Canada to become a bigger player in the twenty-first century by expanding legal protection for developers and copyright holders. ��Looking forward, as the digital and legal-scapes develop and expand, the Canadian Federal Court may find a homegrown��Viacom v Youtube��on its docket soon rather than later.

Ying Cheng is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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