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Will the Supreme Court end the East Texas patent scam?

Tech companies and interest groups seek to alter the geography of litigation.

From Apple to Zendesk, tech sector supports transgender boy at Supreme...

Companies all allow employees to use bathrooms "consistent with their gender identity."

Patent-holding company’s $533M verdict against Apple is dust on appeal

Massive verdict would have been largest ever for a non-practicing entity.

Proposed federal law demands probable-cause warrants for geolocation data

"Outdated laws shouldn't be an excuse for open season on tracking Americans."

US Supreme Court loaded with First Amendment cases

dcwriterdawnreader comments 25 Share this story The First Amendment is being put to the test on multiple levels this term before the US Supreme Court.

The high court will hear cases about the right to trademark offensive names and whether merchants have a right to inform customers that a credit-card surcharge is actually a surcharge.

Two cases involve the free exercise of religion clause of the First Amendment.

The first is about whether Missouri breached that clause by supplying recycled tire material for playgrounds to public and secular schools, but not to religious schools.

The court has already decided to hear the Missouri case, but it has not decided whether it will consider a request to revive a challenge to Utah's law against polygamy.

That lawsuit claims the law is a violation of "religious liberty rights protected by the First Amendment." (PDF) At this stage, however, the justices most likely could decide this case without actually having to weigh in on polygamy or the First Amendment. More on that later. First up on the docket is Expressions Hair Design v.
Schneiderman
, which the justices are to argue Tuesday.

A law in 10 states forbids merchants from imposing a surcharge on goods paid for via a credit card.
Surcharges help merchants recover the so-called "interchange" fees banks charge them for accepting credit cards.
Strangely, in those 10 states, merchants may offer "cash" discounts.

Either way, the result is the same: people who use credit cards can be charged more. But how this pricing structure is described to customers is at the heart of the First Amendment battle.

The laws require that merchants inform customers that price differences for cash or credit purchases are cash "discounts" and not credit card surcharges.

This means merchants are not allowed to charge a base price before tacking on a fee to those using credit cards. frankieleon In New York, breaching that law, heavily backed by the banking industry, is punishable by up to a year in jail. Merchants brought a challenge to the Supreme Court contending the measure is a violation of their First Amendment rights of speech because it restricts what they can say about their prices, not how much they can charge. What's more, they say the law does not protect consumers. "Its effect is to criminalize truthful speech conveying price information," they argue. New York maintains the law is designed to minimize profiteering. "... the imposition of a surcharge is not an act of speech that the First Amendment restricts the government from regulating." Meanwhile, the justices are scheduled to hear another First Amendment case, Lee v.

Tam,
on January 18.

The case essentially asks whether federal intellectual property regulators can bar people from trademarking an offensive name. A section of trademark law actually forbids the US Patent and Trademark Office (USPTO) from approving a trademark if it "consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute." The issue reached the justices in a case concerning a Portland-based Asian-American rock band that sought to trademark its name, The Slants. Previously, decisions have come down on both sides regarding trademarking offensive names.

The most notable denial is likely the name of the NFL's Washington franchise, "Redskins." But lesser-known denials include "Stop the Islamization of America," "The Christian Prostitute," "AMISHHOMO," "Mormon Whiskey," "Ride Hard Retard," "Abort the Republicans," and "Democrats Shouldn't Breed." By contrast, other potentially offensive names have been trademarked.
Some of these examples include "Dangerous Negro," "Celebretards," "Stinky Gringo," "Midget-Man," and "Off-White Trash." In the Slants case the justices agreed to review, the US Court of Appeals for the Federal Circuit cited the First Amendment and sided with The Slants and its founder Simon Tam.

The appeals court struck down that entire section of trademark law, ruling that "the First Amendment protects "even hurtful speech." Tam said the band's name is to bring awareness to racial and cultural issues.
In its appeal, the government argued that being denied a trademark is not a "restriction on speech" because trademarks are "federal benefits" to advance intellectual property rights. (PDF) Another First Amendment case the high court has agreed to hear is Trinity Lutheran Church of Columbia v. Pauley.

This case doesn't concern free speech, but instead deals with the First Amendment in the religious context.

The case involves recycled tires and a Missouri grant program that provides shredded recycled tire pieces to soften playgrounds.

The dispute is this: Trinity Lutheran argues that its constitutional rights are being violated by being excluded from the grant program.

The church says its members have a right to exercise religion while at the same time being treated the same as others. Nathan Barry Missouri counters that the state has done nothing to interfere with the church's ability to worship or run its church child daycare program. Missouri's constitution prohibits state funds from going "directly or indirectly, in aid of any church, sect, or denomination of religion." And Missouri also said that the First Amendment prohibits government from making laws that "prohibit" the free exercise of religion.

But Missouri also says it is free to enact laws that "frustrate" religion. Many groups watching this case suggest that a ruling in favor of Missouri could jeopardize government funding for a wide array of faith-based social services, including soup kitchens and even battered women's shelters.

The justices have not announced a hearing date. The final First Amendment case before the high court also touches on religion. Brown v.

Buhman
concerns a polygamous Mormon family from Utah on TLC's Sister Wives reality TV show.

The family sued Utah over the state's anti-polygamy law, and a federal judge struck down (PDF) portions of the law that made "cohabitat[ing] with another person" illegal if they weren't legally married.

But a federal appeals court ruled that, because the state and local county said they would not prosecute—even after police opened an investigation once the show aired—the case was therefore "moot" and should not have been decided by the lower courts. The family said it moved to Nevada to avoid prosecution. But on appeal to the Supreme Court, the Sister Wives family wants that federal appeals court's decision (PDF) overturned.

They say a lawsuit can't simply go away because the government adopted a non-enforcement policy during the pendency of litigation—a non-enforcement policy that is not even enforceable. "At its core, this case concerns whether a Utah statute that bans married persons from engaging in voluntary cohabitation with other persons is unconstitutional—either as a violation of Petitioners' sexual privacy rights protected by this Court’s decision in Lawrence v.

Texas, 539 U.S. 558 (2003), or their religious liberty rights protected by the First Amendment," according to the family's petition to the justices.

The petition adds that "this constitutional question is currently blocked from continuing on the merits." The justices are to consider whether to hear the case at their January 19 private conference.

The court only has eight members, as we await President-elect Donald Trump's pick to replace Justice Antonin Scalia, who died in February.

FBI let alleged pedo walk free rather than explain how they...

'Tor pedo' torpedo torpedoed In a surprising and worrying move, the FBI has dropped its case against a man accused of downloading child sex abuse images, rather than reveal details about how they caught him. Jay Michaud, a middle school teacher in Vancouver, Washington, was arrested in July last year after visiting the Playpen, a dark web meeting place tens of thousands of perverts used to swap mountains of vile underage porn. Unbeknown to him at the time, the FBI were, for about a fortnight, running the site after taking over its servers, and managed to install a network investigative technique (NIT) on his computer to get his real public IP address and MAC address. The Playpen was hidden in the Tor anonymizing network, and the spyware was needed to unmask suspects – about 1,300 public IP addresses were collected by agents during the operation. According to the prosecution, a police raid on his home revealed a substantial hoard of pictures and video of child sex abuse on computer equipment. But now, guilty or not, he's now off the hook after the FBI filed a motion to dismiss its own case [PDF] late last month. Why? Because Michaud's lawyer insisted that the FBI hand over a sample of the NIT code so it could be checked to ensure that it didn't breach the terms of the warrant the FBI obtained to install the malware, and to check that it wouldn't throw up any false positives. US District Judge Robert Bryan agreed, saying that unless the prosecution turned over the code, he'd have to dismiss the charges. The FBI has since been arguing against that, but has now decided that it's better to drop the case than reveal its techniques. The Playpen affair has proved to be a legal minefield in more ways than one. For a start, the admission that the FBI had been distributing such images and videos online troubled many. But the agency also only sought a single warrant to distribute its NIT internationally, which may have been illegal at the time. That's no longer the case, since a change in Rule 41 of the Federal Rules of Criminal Procedure was nodded through by the US Supreme Court and came into effect on December 1 last year. Judges in Playpen cases – there have been hundreds of prosecutions similar to Michaud's lined up by the Feds – haven't always agreed that the FBI had the right to introduce evidence gathered without a local warrant. In the past the FBI has dropped cases rather than reveal their investigation techniques, particularly with its cellphone-tracking Stingray equipment. But those were minor cases – nothing so serious as child abuse. ® Sponsored: Customer Identity and Access Management

The most dramatic patent and copyright cases of 2016

reader comments 6 Share this story Many of the biggest legal disputes in technology relate to "intellectual property," a broad term used for laws relating to everything from copyrights to patents, trademarks to trade secrets.

This year saw significant changes in the copyright and patent landscapes. "Patent trolls" who sue technologists for fun and profit got smacked down by courts more often—and harder—than ever before.

At the same time, universities were filing patent lawsuits at an increased rate, and often winning.In the copyright realm, the Oracle v.

Google
trial dominated the spring.

A jury was left to decide the murky rules about when using an API could be "fair use." That legal uncertainty led to the two tech giants clashing over the ethics of each others' business practices and the history of the smartphone industry. In two very different cases in 2016, copyright issues led to criminal charges being filed. US authorities are seeking to extradite and put on trial a man named Artem Vaulin, who they say made $16 million annually by running a massive online storehouse of pirated films and songs.

And more than three years after they were condemned by a federal judge, lawyers behind a vast array of copyright lawsuits, a firm known as Prenda Law, were arrested and accused of fraud. Here's a look back at 2016's most dramatic IP cases. Graphiq CEO Kevin O'Connor and former director of operations Danny Seigle.

Graphiq (formerly FindTheBest) became the first company to win attorneys' fees in a patent case under the Supreme Court's new Octane Fitness standard.

An appeals court approved the fee award in January 2016. Patent trolls continued to face stiff fines throughout 2016. eDekka, the most litigious patent company just a year ago, collapsed and dropped its appeal after being hit with fees in East Texas. Carnegie Mellon University ended a prolonged patent battle with Marvell Technology in February, with Marvell agreeing to pay a $750 million settlement—the largest payout ever for a patent related to computer science. Pictured here is CMU Professor José Moura, inventor on the two patents in the case. An image explaining one of two patents owned by Carnegie Mellon University, which describe a method of reducing noise when reading data from hard disks.

The patents were used by CMU to sue Marvell Technology. Universities have increasingly been willing to become plaintiffs in high-stakes patent lawsuits, and are sometimes partnering with professional patent enforcement companies to do so.

The Electronic Frontier Foundation launched a "reclaim invention" campaign in June 2016, seeking to pressure universities not to partner with such "patent trolls." Since the US Supreme Court's 2014 Alice v.

CLS Bank
decision, it's been easier to get software patents thrown out of court. Until this year, the US Court of Appeals for the Federal Circuit had only upheld software patents in one post-Alice case.

But in 2016, the Federal Circuit gave approval to software patents in three more cases.

The image above is pulled from the McRo v.

Bandai Namco Games
opinion.

A Federal Circuit panel said McRo's digital animation patents could survive, rejecting arguments from public interest groups like EFF that McRo was being allowed to essentially patent mathematics. In May, a second jury trial between Oracle and Google over whether the Android operating system violated Java copyrights ended with a second resounding win for Google.

The testimony of Jonathan Schwartz, former president of Sun MicroSystems, loomed large in the case.
Schwartz testified that he had no problem with Android, since Google had followed the rules around Java intellectual property that Sun had established. Noah Berger/Bloomberg via Getty Images Oracle attorneys tried to sway the jury by painting former Sun Microsystems president Jonathan Schwartz as a hypocrite, who praised Google in public but privately decried its licensing practices.
It didn't work.

Above is a slide from Oracle's closing argument. In June, a Los Angeles federal jury considered whether or not Led Zeppelin's "Stairway to Heaven" was ripped off from a song by psychedelic rock band Spirit.

The jury found in Led Zeppelin's favor, quelling some fears that the music industry may continue to be plagued with copyright lawsuits over similar-sounding songs.

The case followed a high-profile 2015 trial in which a jury found that the hit song "Blurred Lines" infringed the copyright of Marvin Gaye's "Got to Give it Up." In July, US prosecutors charged Artem Vaulin, a 30-year-old Ukrainian man, with criminal copyright infringement for running the popular website KickAssTorrents.
Vaulin was arrested and is being held in Poland awaiting extradition.
It's the highest profile criminal copyright case since the US charged Kim Dotcom—who's still living in New Zealand, where he's desperately hoping to avoid extradition.

Above is a screenshot of the now-shuttered torrent website. On July 21, the Electronic Frontier Foundation filed a lawsuit that's been a long time coming.

EFF claims that the DMCA's ban on circumventing digital locks violates the First Amendment.

Digital locks may need to be sidestepped "in order to create a running critical commentary on... a political debate, sporting event, or movie," all legitimate activities that should be protected by fair use, EFF argues.

The government has asked for the case to be dismissed, and the matter is awaiting a judge's decision. Pictured above is EFF client Andrew "bunnie" Huang, who wants to market a product for editing HD television signals, but is hampered by copyright limitations he believes are unconstitutional. Record label EMI sued MP3tunes, an early music locker service, in 2007, along with its founder Michael Robertson, pictured above in a 2006 photo.

The litigation caused MP3tunes to go bankrupt in 2012, but Robertson kept fighting his battle in court.
In October 2016, the 2nd Circuit appeals court upheld and even expanded EMI's court win—a disastrous result for Robertson and MP3tunes.

Today, cloud music services are thriving.

But the MP3tunes precedent shows that innovators who cross the music industry still must risk paying a heavy price. In an opinion published December 6, the US Supreme Court stopped Apple from collecting $399 million in patent infringement damages from Samsung over iPhone-related design patents.

The high court held that the lower court erred when it allowed Apple to automatically collect "lost profits" damages based on the entire value of a phone.
It was the first time in more than a century that the Supreme Court took a case involving design patents. Pictured above is one of the infringed patents, D618,677, describing a black rectangle with rounded corners. The lawyers behind Prenda Law were denounced in 2013 by a federal judge who called them a "porno-trolling collective" that had abused federal courts.
In December 2016, two of those lawyers, John Steele and Paul Hansmeier, were arrested and charged with fraud and perjury. Pictured above is John Steele's banner advertisement from his old firm, which practiced family law. Two band members of 60's rock band The Turtles, pictured above, have turned the once-obscure issue of pre-1972 songs into a hot copyright issue.

The Turtles sued Sirius XM and Pandora, demanding royalties for their old sound recordings, which are not protected by federal law.
Sirius and Pandora lost key legal battles in 2015, and Sirius paid out a $210 million settlement to record labels.

But the Turtles case went on, and on Dec. 21, 2016 the New York Court of Appeals handed a big victory to Sirius, saying that the state's common law offered no copyright protection for pre-1972 recordings.

The decision may be influential in other states. Nokia and Apple fought each other over smartphone patents between 2009 and 2011, but settled their case. Nokia has backed out out of the smartphone business, but is still licensing its patents, so the two companies are back at war. Nokia has sued Apple over patents in 11 different countries. Meanwhile, Apple has filed an antitrust lawsuit against Nokia, accusing the Finnish firm of working together with "patent-assertion entities"—a.k.a. patent trolls—to "maximize the royalties that can be extracted from product companies."

These three 2016 cases gave new life to software patents

For software patent defenders, Planet Blue's patent on lip synchronization in animated characters was their last, great hope.McRO, Inc. reader comments 6 Share this story In 2014, the US Supreme Court dealt a major blow to software patents. In their 9-0 ruling in Alice Corp v. CLS Bank, the justices made it clear that just adding fancy-sounding computer language to otherwise ordinary aspects of business and technology isn't enough to deserve a patent. Since then, district court judges have invalidated hundreds of patents under Section 101 of the US patent laws, finding they're nothing more than abstract ideas that didn't deserve a patent in the first place. The great majority of software patents were unable to pass the basic test outlined by the Supreme Court. At the beginning of 2016, the nation's top patent court had heard dozens of appeals on computer-related patents that were challenged under the Alice precedent. DDR Holdings v. Hotels.com was the only case in which a Federal Circuit panel ruled in favor of a software patent-holder. The Alice ruling certainly didn't mean all software patents were dead on arrival—but it was unclear what a software patent would need to survive. Even DDR Holdings left a teeny-tiny target for patent owners to shoot at. That all changed in 2016. Judges on the US Court of Appeals for the Federal Circuit found three more cases in which they believe that software patents were wrongly invalidated. What once looked like a small exception to the rule now looks like three big ones. The results of those cases could portend a coming year that will be friendlier to patent owners than the past few have been. As 2016 winds down, let's take a closer look at the details of these three software patent battles and how patent-holders kept their patents alive through the appeals court. Enfish LLC v. Microsoft Decided: May 12, 2016 Panel: Circuit Judges Kimberly Moore, Richard Taranto, Todd Hughes. In 1993, Enfish Corporation was founded in Pasadena, California, by a former Gemstar executive who wanted to find a better way to track and sort e-mail, files, and other data. By 2000, when Enfish founder Louise Wannier was profiled in the Los Angeles Times, the company had 45 employees and had raised $20 million in capital. But Enfish still wasn't profitable. The "Enfish Find" desktop search tool, and other company products, got positive write-ups in PC World and were downloaded by more than 200,000 users. In the end, though, it wasn't enough. By 2005, Enfish was out of business. The Enfish patents, though, lived on. By 2012, Wannier had formed Enfish LLC and decided to sue several huge software companies: Microsoft, Inuit, Sage Software, and financial tech heavyweights Fiserv and Jack Henry & Associates. The Enfish lawsuit (PDF) claimed that Microsoft's .NET Framework infringed two patents, numbered 6,151,604 and 6,163,775. Enfish claimed to have built a new type of "self-referential" database, with a priority date stretching back to 1995. The district court judge disagreed, though. He said a table is just a table. Emphasizing terms like "non-contiguous memory" (a ubiquitous method for computer storage) and "indexing" wasn't going to save the Enfish patents. In his 2014 order, US District Judge George Wu wrote: For millennia, humans have used tables to store information. Tables continue to be elementary tools used by everyone from school children to scientists and programmers.... the fact that the patents claim a "logical table" demonstrates abstractness... Humans engaged in this sort of indexing long before this patent. In May 2016, a Federal Circuit panel reversed Judge Wu. Software improvements are not "inherently abstract," the judges ruled (PDF). The Bilski and Alice cases were directed at processes "for which computers are merely invoked as a tool." Those cases didn't rule out a patent on a "specific asserted improvement in computer capabilities." The Enfish patent claims were "directed to a specific improvement to the way computers operate, embodied in the self-referential table." The self-referential table "is a specific type of data structure designed to improve the way a computer stores and retrieves memory," and thus deserves a patent. The panel also shot down Wu's finding that the Enfish invention was rendered doubly invalid by Microsoft Excel 5.0, a database product that was in public use more than a year earlier than the Enfish patent was filed. With all five of the patent claims now patent-eligible again, the case was sent back to the lower court. Discovery is underway and a trial is scheduled for 2018. For patent lawyers, the Enfish breakthrough was "like a ray of light at the end of a long dark tunnel," wrote one attorney at Fish & Richardson, the nation's biggest IP law firm, who analyzed the decision in a blog post. "Reaction by the patent bar was swift. Notices of additional authority and requests for reconsideration were submitted to district courts around the country." McRO v. Bandai Namco Games America Decided: September 13, 2016 Panel: Circuit Judges Jimmie Reyna, Richard Taranto, Kara Stoll. For patent system defenders, the next case was clearly a hill to die upon. In its opening Federal Circuit brief, patent-holder McRO Inc., which does business under the name Planet Blue, told the judges that the district court's ruling against it "violates supreme court precedent and threatens all software patents." Planet Blue was founded in 1988 by Maury Rosenfeld, a computer graphics and visual effects designer who worked for shows like Star Trek: The Next Generation, Max Headroom, and Pee Wee's Playhouse, according to his Federal Circuit brief (PDF). Rosenfeld's firm was hired by several video game companies "to work on animation and lip-synchronization projects." But, at some point, they clearly had a falling out. Beginning in 2012, Planet Blue sued more than a dozen big video game companies, including Namco Bandai (PDF), Sega, Electronic Arts, Activision, Square Enix, Disney, Sony, Blizzard, and LucasArts. Several of those big players had been Rosenfeld clients before the lawsuits. The complaints said the companies infringed two Rosenfeld patents, US Patents No. 6,307,576 and 6,611,278, which describe a method of lip-synching animated characters. Earlier methods of animating lip synchronization and facial expressions, said Planet Blue lawyers, were too laborious and expensive. US District Judge George Wu ruled against Planet Blue in September 2014. He acknowledged that Rosenfeld may have been an innovator, but his patents were nonetheless invalid because they claimed an abstract idea. The patents would have preempted any lip synchronization that used a "rules-based morph target approach." On appeal, the case was immediately seen as one to watch, in part because Rosenfeld was seen as a real innovator in his field. "The patents utilize complex and seemingly specific computer-implemented techniques," wrote Patently-O blogger Prof. Dennis Crouch. "An initial read of the claims in the Planet Blue patents seems to be a far cry from basic method claims." BSA—aka the Software Alliance, a trade group that includes Microsoft and other big software companies—weighed in on the case by filing an amicus brief (PDF) in favor of Planet Blue. The asserted claims weren't abstract, BSA argued. The district court judge, BSA said, had "imported" questions about obviousness into his analysis when he should have only considered a strict Section 101 analysis about abstraction. In BSA's view, the big swath of patents being thrown out in the post-Alice era should "not include claims directed to technological problems specific to the digital environment." The battle was joined on the other side, too. The Electronic Frontier Foundation and Public Knowledge jointly submitting a brief (PDF) arguing in favor of the video-game defendants. "The claims embody nothing more than the concept of applying numerical rules—that is, equations—to numerical inputs to obtain numerical outputs," wrote Public Knowledge attorney Charles Duan. "Since the law rejects Appellant’s theories of patentability, Appellant resorts to whitewashing its broad claims by extensively discussing the specification and implementing software. This is totally irrelevant," as it is the claims that are important. When the Federal Circuit found in Planet Blue's favor in September, it was the biggest win yet for software patentees in the post-Alice era. The three-judge panel held that the claims were "limited to rules with specific characteristics." Quoting the specification, they held that "the claimed improvement here is allowing computers to produce 'accurate and realistic lip synchronization and facial expressions in animated characters,' which could previously only have been produced by human animators." The judges didn't buy the defense argument that there was nothing new in having computer-based rules for animation. "Defendants concede an animator's process was driven by subjective determination rather than specific, limited mathematical rules." BSA was jubilant about Planet Blue's win. BSA President Victoria Espinel wrote: The Federal Circuit’s opinion reaffirms that software is worthy of patent protection just as any other field of technology. Software is a major component of today’s greatest innovations, and it is imperative that our patent system continues to encourage innovators in all fields of technology. Today’s Federal Circuit’s decision is a step in the right direction. McRO v. Namco Bandai is now back in Wu's Los Angeles courtroom, awaiting a scheduling conference for the litigation to go forward. Amdocs v. Openet Telecom Decided: November 1, 2016. Panel: Circuit Judges S. Jay Plager, Pauline Newman, Jimmie Reyna (dissenting). Israel-based Amdocs went to US courts to sue (PDF) an Irish company, Openet Telecom, in 2010. Amdocs asserted that four patents related to online accounting and billing methods were all derived from the same original application: Nos. 7,631,065; 7,412,510;  6,947,984; and 6,836,797.  The patents all describe the same system, which allows network operators to account and bill for internet protocol (IP) traffic. Claim 1 of the '065 patent claims computer code for "receiving... a network accounting record," then correlating the record with other accounting information, then computer code that uses that information to "enhance the first network accounting record." The district court found that Amdocs' claim wasn't much more than the abstract idea of correlating two networks. The court tossed the patent. And the Federal Circuit majority recognized that, in other cases, "somewhat... similar claims" had been thrown out under § 101—but then the Circuit majority went on to say that, despite that, the patent should have been allowed. "[T]his claim entails an unconventional  technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows that previously required massive databases)," wrote US Circuit Judge S. Jay Plager. "The components needed were "arguably generic" but had been used in such an "unconventional manner" that they led to "an improvement in computer functionality." The Amdocs saga isn't back in the lower courts quite yet. Defendant Openet has filed a petition for rehearing by the whole court. However it turns out, these three decisions mean that anyone seeking to enforce a software patent will come into 2017 in a far better position than they were a year ago. The Federal Circuit is continuing to debate the patent-eligibility of software. The random draw of judges on a Federal Circuit panel is increasingly looking like the most important factor on whether a patent prevails or dies at the appeals court. As Crouch notes in his analysis, two of the three judges that made up the majority in the Amdocs case can be seen as being in the minority of the court as a whole, since they pushed against the Alice patent. How such a split will be reconciled isn't clear. Crouch points out there may be two or three vacancies on the Federal Circuit during Trump's first term, and the Supreme Court has shown a continued interest in taking up patent cases. But looking back at the key decisions of 2016, anyone wanting to enforce software patents is in a far better position than they were a year ago, thanks to the three decisions above. 2016 may go down in history as the year that saved software patents.

New York law banning right to bear “electronic” arms faces lawsuit

A civilian practices firing a stun gun at Travis Air Force Base in California last year.Travis AFB reader comments 79 Share this story A New York law making it illegal for members of the public to possess "electronic" arms like Tasers is facing a federal lawsuit claiming that making such possession a criminal misdemeanor is a violation of the Second Amendment. New York, one of five states outlawing electronic weapons, is being sued (PDF) by the Firearms Policy Foundation and Matthew Avitabile—the mayor of Middleburgh, New York.

Avitabile wants to purchase a Taser for self-defense.

But New York Penal Law § 265.01 says, "A person is guilty of criminal possession of a weapon in the fourth degree when:(1) He or she possesses any firearm, electronic dart gun, electronic stun gun..." The suit claims the New York law is unconstitutional, saying: Defendants’ laws, customs, practices and policies generally banning the acquisition, possession, carrying and use of Tasers and other electronic arms violates the Second Amendment to the United States Constitution, facially and as applied against the Plaintiffs in this action, damaging Plaintiffs in violation of 42 U.S.C. § 1983. Plaintiffs are therefore entitled to preliminary and permanent injunctive relief against such laws, customs, policies, and practices. New Jersey is also facing a similar lawsuit in an era when all manner of weapons are being constructed at home with 3D printers. The New York suit, meanwhile, comes nine months after the US Supreme Court questioned the rationale behind a Massachusetts law outlawing stun guns and a Massachusetts state top court ruling supporting that law. The decision set aside a 2015 ruling from the Judicial Court of Massachusetts, which upheld the law that carries up to 2.5 years in prison.

The state's top court had ruled that the US Constitution's framers never envisioned the modern stun-gun device, first patented in 1972.

The state court also said that stun guns are not suitable for military use and that it did not matter that state lawmakers had approved the possession of handguns outside the home. The Supreme Court, however, didn't hold that the Massachusetts law was unconstitutional.
Instead, the Supreme Court sent the case back to the Massachusetts high court to reconsider its analysis because the reasoning of the lower court's ruling violated US Supreme Court precedent. But Massachusetts subsequently dropped its prosecution of a woman at the center of the case who brought a legal challenge against the stun-gun possession charges levied against her.

That, in essence, ended the case and left the Massachusetts law on the books, "though with a cloud over it as a result of the Supreme Court's decision," as the Washington Post wrote. The Supreme Court precedent the Post was referencing was a 2008 decision known as Heller (PDF).

The ruling overturned a District of Columbia firearms law and concluded that a "ban on handgun possession in the home violates the Second Amendment, as does its prohibition against rendering any lawful firearm in the home operable for the purpose of immediate self-defense." In the wake of Heller, every state allows people to carry weapons of sorts, some with or without permits.

But a handful of states view stun guns differently and bar civilians from having them. Heller rejected the proposition that "only those weapons useful in warfare are protected." The Supreme Court, in its stun-gun ruling earlier this year, said the Massachusetts high court's reasoning was flawed because the Second Amendment extends to weapons "not in existence at the time of the founding." The New York suit cites Heller and claims that New York "may not completely ban the keeping and bearing of arms for self-defense that are not unusually dangerous, deny individuals the right to carry arms in non-sensitive places, deprive individuals of the right to keep or carry arms in an arbitrary and capricious manner, or impose regulations on the right to keep and carry arms that are inconsistent with the Second Amendment." The suit added that stun guns are less lethal than firearms and that 18,000 law enforcement agencies deploy them worldwide.

Samsung victorious at Supreme Court fight with 8-0 opinion against Apple

EnlargeDAMIEN MEYER/AFP/GettyImages reader comments 82 Share this story For the first time in a century, the US Supreme Court has weighed in on how much design patents are worth.

The answer: not nearly as much as Apple thinks. The 8-0 opinion (PDF) is a rebuke to the US Court of Appeals for the Federal Circuit, which held that the relevant "article of manufacture" for calculating damages was—in fact, had to be—the entire smartphone.

That meant even though Apple's patents covered only certain design elements, it was entitled to $399 million in lost profits damages. In an opinion authored by Justice Sonia Sotomayor, the Supreme Court rejected that approach, finding that the statutory term "article of manufacture" could mean either a whole product or just one component of a product. "Reading 'article of manufacture' in §289 to cover only an end product sold to a consumer gives too narrow a meaning to the phrase," writes Sotomayor. The damage numbers in this case, the first of two mammoth Apple v.
Samsung
trials, have shifted over time.
In 2012, the first Apple v.
Samsung
trial ended with a jury slapping Samsung with a $1.05 billion verdict for infringing Apple patents and trademarks.

After appeals, the trademark damages were thrown out, with $548 million in damages remaining, based entirely on patent infringement. With this Supreme Court case, Samsung was looking to get back most of that money—the $399 million that's based on three design patents. The patents at issue are D618,677 (a black rectangle with rounded corners, shown above), D593,087 (with bezel on surrounding rim), and D604,305 (a colorful grid of 16 icons.) The Supreme Court declined to rule on exactly what should be the "article of manufacture" in the case, saying that issue wasn't sufficiently briefed—a suggestion made by the US Solicitor General during oral arguments. The case will go back down to the Federal Circuit, which will recalculate the damages using the Supreme Court's criteria. However, today's ruling is narrow enough that the appeals court could still come up with a high number—or even the same number.

The Supreme Court said only that they can't assume the whole product is the damages base, but Sotomayor's opinion acknowledges that it could be appropriate in some cases. That seems unlikely to happen, however. Even though it's a narrow opinion, it's a sign that the Supreme Court is seeing overreach here, and it is going to expect a smaller number.

The Federal Circuit will not want another high court rebuke to add to its growing list.

Supreme Court considers when US patent violations are “induced” abroad

EnlargeZach Gibson/Getty Images reader comments 7 Share this story Here's a seemingly sure-fire way to avoid violating US patent laws: just don't make or use your product in the US. Pretty straightforward, right? Maybe not, in the age of modern supply chains and manufacturing.

Today, the US Supreme Court takes up a case that will determine how much help an overseas manufacturer can get from the US without running afoul of US patent laws. The case originates in a dispute between two competitors in the field of genetic testing.

Both Promega Corporation and Life Technologies (selling through its Applied Biosciences brand) make DNA testing kits that can be used in a variety of fields, including forensic identification, paternity testing, medical treatment, and research. Promega licensed several patents to Applied Biosystems that allowed its competitor to sell kits for use in "Forensics and Human Identity Applications." The license forbade sales for clinical or research uses.
In 2010, Promega filed a lawsuit in federal court, saying that Life Technologies had "engaged in a concerted effort to sell its kits into unlicensed fields," thus infringing its patents. A Wisconsin federal jury found that Life Tech had willfully infringed and should pay $52 million in damages.

But the district judge overseeing the case set aside that verdict after trial, ruling that since nearly all of the Life Tech product had been assembled and shipped from outside the US, the product wasn't subject to US patent laws. The Life Tech testing kits had five parts, four of which were made in a manufacturing facility based in the United Kingdom.

The fifth component, called a Taq polymerase, was supplied from the United States. US patent law can apply to products assembled abroad, but only in situations in which "all or a substantial portion" of a product are supplied from the US. In the judge's view, the generic polymerase that Life Tech was shipping from the US to the UK didn't meet that standard. Promega appealed the decision to the nation's top patent court, the US Court of Appeals for the Federal Circuit.

A split panel of judges at that court held that the polymerase shipments were, in fact, enough to get Life Technologies in trouble. The appeals court held that in this context, "substantial" should be seen as meaning "important" or "essential," and thus shipping "a single important or essential component" from the US is enough to show patent infringement. Life Technologies pointed out that Taq polymerase is "only one commodity component out of five in the kit," but the appeals court focused on the fact that "[w]ithout Taq polymerase, the genetic testing kit... would be inoperable." Reaching too far? Life Technologies took its case to the US Supreme Court and argued (PDF) that the Federal Circuit had inappropriately extended US law to reach overseas, violating both the text of the law and the "presumption against extraterritoriality." Promega countered (PDF) that Life Tech was looking for a "rigid, bright-line rule with no foundation in the statutory text." The high court agreed to take the case in June, and Promega will probably have an uphill battle.

First, in recent years, the Supreme Court has been more interested in reeling in patent rights rather than expanding them.
Second, there's the simple argument that if the Supreme Court had been satisfied with the outcome after the Federal Circuit, they could have simply done nothing and let the ruling stand. The opinion of the US Solicitor General, who has been asked to weigh in on the case, may be the most influential.

The Solicitor General's brief (PDF) favors Life Tech, saying that the statute's use of the word "substantial portion" means "a quantitatively substantial percentage of those components." In a five-part invention, one part "cannot constitute a substantial portion of the components." The US government also argues that the "presumption against extraterritoriality" favors Life Tech.

That's the presumption that foreign conduct is, generally, governed by foreign law.
In the government's view, the Federal Circuit's decision that the Life Tech kits infringe US patents could adversely affect "legitimate... sovereign interests." Life Tech also asked the Supreme Court to review another part of the Federal Circuit decision, but the justices declined to do so. The Federal Circuit found that Life Technologies can be liable for "inducing" infringement of a patent, even though no third party was involved.
In other words, the judges held that Life Technologies was inducing itself to infringe. Whether or not it's possible to be "inducing with yourself" is what Patently-O writer Dennis Crouch called the "Billy Idol question" of patent litigation.

But the Solicitor General didn't find that question compelling enough to warrant review, and the Supreme Court justices agreed. The original Promega lawsuit accused Life Tech of infringing five patents that it either owned or licensed.

The Federal Circuit found that four of those patents were invalid, leaving just one remaining patent in the litigation, US Patent No. RE 37,984, which describes a method of "analyzing length polymorphism in DNA regions."

Feds Get Expanded Hacking Powers

Rule 41 goes into action today, despite congressional efforts to block the changes.

New rules that expand the US government's hacking powers take effect today.

Multiple efforts in Congress to block the changes—which some worry will threaten basic privacy rights—were intercepted by Sen. John Cornyn (R-Texas), Reuters reported.

Sen. Ron Wyden (D-Ore.), with bipartisan support from fellow lawmakers, made a trio of attempts to prevent the implementation of a federal court procedure known as Rule 41.

.@RonWyden: We have more Senate debate over the tax treatment of race horses than massive expansions of surveillance authority #Rule41

— WydenPress (@WydenPress) November 30, 2016

Approved in May, the guideline makes it easier for the Justice Department to obtain warrants for remote electronic searches. It also allows judges to issue a single warrant authorizing government hacking of numerous devices around the world.

"This is a dramatic expansion of the government's hacking and surveillance authority," Wyden said earlier this year. "Such a substantive change with an enormous impact on Americans' constitutional rights should be debated by Congress, not maneuvered through an obscure bureaucratic process."

.@RonWyden: Law-abiding Americans will ask "what were you guys thinking?" when the FBI starts hacking victims of a botnet hack #Rule41

— WydenPress (@WydenPress) November 30, 2016

Rule 41, recommended by the Justice Department, comes from a government advisory committee and updates the Federal Rules of Criminal Procedure. It was adopted by the US Supreme Court and submitted to Congress, which sat on the initiative until Dec. 1, at which point it goes into effect.

With great power, however, comes great fear: Many people are concerned about a loss of privacy, especially at the hands of the incoming administration. President-elect Donald Trump, "openly said he wants the power to hack his political opponents the same way Russia does," Wyden said during a speech in the Senate.

In an effort to ease citizens' minds, US Assistant Attorney General Leslie Caldwell this week penned a blog post touting the benefits of Rule 41, arguing that the amendments "do not create unintended consequences."

"The possibility of such harm must be balanced against the very real and ongoing harms perpetrated by criminals—such as hackers who continue to harm the security and invade the privacy of Americans through an ongoing botnet, or pedophiles who openly and brazenly discuss their plans to sexually assault children," she wrote.

"No one familiar with the harm caused by anonymized child sexual abuse, anonymized firearms trafficking or overseas malware can seriously contend that it makes more sense for Americans to fear federal investigators seeking search warrants from independent federal courts," Caldwell added.

Not everyone agrees: The Electronic Frontier Foundation (EFF) earlier this year asserted that the risks associated with Rule 41 are two-fold.

"The first part of this change would grant authority to practically any judge to issue a search warrant to remotely access, seize, or copy data relevant to a crime when a computer was using privacy-protective tools to safeguard one's location," the organization said.

That includes those using the Tor VPN service, or even folks who declined to share their location with a smartphone app.

The second part allows the feds access to a PC compromised by a botnet.

"This means victims of malware could find themselves doubly infiltrated: their computers infected with malware and used to contribute to a botnet, and then government agents given free rein to remotely access their computers as part of the investigation," EFF continued.

The Justice Department, meanwhile, argued that the move updates federal rules for the digital age. Previously, magistrate judges can only grant requests that cover their jurisdictions, which can hamper efforts to go after bad actors online, who are not limited to one area.