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For Lawyers Turned Video-Porn Mass Copyright Plaintiffs, Litigation May Not Pay

May 10, 2013

I didn’t think I’d have a chance to write another “what were they thinking” post only two weeks after the last one. But, here goes …. I’ve written about Bittorrent swarm mass copyright suits in the past, but Monday’s decision by California federal district court judge Otis D. Wright tops everything that has come before. A lot of people have followed this case and similar cases filed by so-called “Prenda Law”—Ingenuity 13 v. John Doe. In other words, the plaintiffs in this case have made a lot of people mad.* *Techdirt is at or near the top of this lengthy list. The Ingenuity 13 case has been dismissed, but on Tuesday the judge issued a withering sanctions decision in the case. Here is some of what he had to say. The opening paragraph of the opinion sets the stage for the indictment that follows: Plaintiffs have outmaneuvered the legal system. They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle—for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow, starving attorneys in this electronic-media era to plunder the citizenry. Their…

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Federal Judge Tells Redigi to Shut It Down

April 2, 2013

As I reluctantly predicted last week, U.S District Court Judge Richard Sullivan has ruled that Redigi’s digital resale business is not protected by the first sale doctrine. His March 30, 2013 decision falls squarely in line with the arguments made by Capitol Records and rejects all of Redigi’s positions. I have written quite a bit on this case (here and here), and there is nothing new or surprising in the court’s decision. The court described the issue before it as “the novel question . . . whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine.” In answering this question the court emphasized that because it is “a court of law and not a congressional subcommittee or technology blog, the issues are narrow, technical, and purely legal.” Indeed, the court hewed closely to the statute. It noted that “the plain text of the Copyright Act makes clear that reproduction occurs when a copyright work is fixed in a new material object.”* The court states that “put another way, the first sale defense is limited to material items, like records, that the copyright owner put into the stream of commerce. Here, ReDigi is not distributing such material items; rather, it is distributing reproductions of the copyrighted code embedded in new material objects, namely, the ReDigi server in Arizona and its users’ hard…

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Redigi Case Poses A Novel Copyright Question on the Resale of Digital Audio Files – Is “Digital First Sale” Legal?

March 16, 2012

You know all those used music stores you used to love to go to back in the day when you bought music on CDs?  You could browse through used CDs and buy them for less than retail.  Maybe you still do (kudos to Deja Vu Records in Natick, Mass.).  Of course, you can do the same thing online. The founders of Massachsetts-based Redigi figured, why can’t we create a marketplace that will allow people to do the same thing with their digital music files?  Or, as Redigi puts it: ” Sell your old songs legally – The world’s first used digital music marketplace - Buy used music insanely cheap”.  However, in starting this business Redigi may have run smack into the disconnect between the U.S. copyright statute and digital media.  And, it has been forced to defend against a full-on assault by the RIAA  (in the form of its apparent designee, Capitol Records). Redigi’s service launched in October 2011, and by reason of the sheer chutzpah of its business model the copyright industry (the usual ragtag collection of lawyers, industry types, bloggers, reporters and hangers-on) was soon debating the legality or illegality of its service. By early November Redigi was holding a ”roll over and die” letter from the RIAA. By early January 2012 Capitol had filed suit against Redigi in the Southern District of New York. Issue was joined quickly when Capitol filed a motion for preliminary injunction seeking, in effect,…

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Don’t Mess With Texas

May 14, 2010

I’ve written before about how generous juries in the federal courts in the Eastern District of Texas (EdTX) are to patent plaintiffs. (link).  After I wrote about this a year ago there was a feeling that this trend might be reversing itself. However, Johnson & Johnson’s $1.6 billion judgment against Abbott and i4i’s $200 million verdict against Microsoft last summer put an end to those thoughts. So, when Apple, Sirius XM and others were recently sued for patent infringement in EdTX they quite naturally looked for a way out.  Massachusetts, they told the Texas district court, was a far better choice, particularly when you considered the fact that that the patent owner, a non-practicing entity, had set up a Texas company shortly before filing suit, and located its business in the offices of its Texas lawyers. But, it’s not that easy. After the EdTX trial court refused to transfer the case to Massachusetts, Apple and its co-defendants filed a “mandamus” with the Federal Circuit.  Mandamus is a rare procedural tool.  Its a way to ask a court (typically an appellate court) to take an action that isn’t really an appeal (because the there is no final judgment), and no specific statute authority authorizing interlocutory appeal. I think it fair to say that fewer than one in a hundred lawyers has ever filed a “writ of mandamus,” (more likely fewer than…

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There are a lot of pissed off law students and recent grads out there …..

December 28, 2009

I considered tagging this under “humor,” but that wouldn’t be right.  Several more of these at the author’s Youtube site

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Judge Fabricant's Preliminary Injunction Decision in HRH v. Sheppard

October 28, 2008

Attached below is Judge Judith Fabricant’s lengthy decision in Hilb Rogal & Hobbs v. Sheppard, decided by Judge Fabricant in the Suffolk Business Litigation Session early this year. To my knowledge, this decision and order became publicly available only recently. This restrictive covenant case is interesting in one unusual respect: it involves what some lawyers like to call “employee raiding” – a perjorative term that one sometimes hears when a large group of employees leaves to join a new firm. Here, the group was unusually large, consisting of 24 employees who resigned en masse, leaving Hilb Rogal & Hobbs (HRH) identical resignation letters and advising HRH to contact the same lawyer in the event any legal communications were necessary. HRH filed suit and moved for a preliminary injunction, presenting Judge Fabricant with a complex set of facts (the employees did not all have the identical agreements), and factual variations in their circumstances. The decision breaks no new ground in Massachusetts noncompete law, but it’s worth making a few observations about how the Judge approached the case: Employees whose agreements were entered into in connection with a business that had been sold to HRH earlier were treated much more strictly than the “rank and file” employees, as one would expect given Massachusetts law. The Judge viewed HRH’s claim of interference with contractual relations favorably, given that the new employer offered it’s…

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Supreme Court Will Decide Whether Ignorance is a Defense to the Federal Crime of Identity Theft

October 21, 2008

Today, the Supreme Court agreed to decide this issue: Whether an individual who used a false means of identification but did not know it belonged to another person can be convicted of “aggravated identity theft” under 18 U.S.C. 1028A(a)(1). The case involves an illegal alien who was prosecuted for use of false identity papers. It must be hard enough to be arrested as an illegal alien, but much worse to discovery that your punishment will not be deportation, but rather indictment and trial for aggravated identity theft, a felony punishable with two years imprisonment with no probation allowed. Your defense: you may have purchased false identification in order to work, but you didn’t know that you were using another person’s social security number, as opposed to a purely fictitious SSN. This is the situation that Ignacio Carlos Flores-Figueroa faced when the U.S. Court of Appeals for the Eighth Circuit held that the government was not required to prove that Mr. Flores-Figueroa knew that he was using another person’s ID, and upheld his two year sentence under 18 U.S.C. 1028A(a)(1). This was the second time that the Eighth Circuit had ruled this way on this issue. Surprisingly, another federal appellate court saw it differently, and held that knowledge is an element of the crime. Thus, the Supreme Court was presented with a split of authority between the federal circuits which it…

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Judge Gants' Decision in NERA v. Evans

October 15, 2008

One of the great benefits of the Suffolk Business Litigation Session (the BLS) is that the judges tend to write detailed opinions explaining their decisions. This tends to be less true elsewhere in the Superior Court. Recently-retired Superior Court Judge Allen van Gestel created a tradition of written jurisprudence while he headed the BLS, and his successors are keeping up the tradition. While these decisions are not published in an official reporter, and they are not binding precedent in the strict legal sense, they are often made available on the Internet, on legal search engines such as Westlaw and in the unofficial Mass. Law Reporter. In this way attorneys and the public are informed on how the BLS judges tend to see issues that come before them. And of course, any given judge is likely to be greatly influenced by a decision he or she has authored on a particular issue; there’s nothing better than citing a judge back to herself. The extensive and detailed opinion in The National Economic Research Associates, Inc. v. Evans, decided by Judge Ralph Gants in early September 2008, shows that the new BLS judges are continuing Judge van Gestel’s tradition of written decisions. In NERA v. Evans Judge Gants was asked to decide (on summary judgment) a claim that David Evans had violated a covenant not to compete with NERA, his former employer. The…

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Zealous Advocacy, or Abuse of Advocacy?

October 11, 2008

In the Medtronic v. BrainLab patent litigation in U.S. District Court in Colorado, Senior U.S. District Judge Richard P. Matsch has sanctioned Medtronic Navigation, Inc. and its lawyers $4.3 million, an amount which represents part of the attorney’s fees and costs incurred by BrainLab in defending this case. This order is a follow-up to his decision last February ordering that Medtronic be sanctioned, but not deciding (at that time) the precise amount of the sanction. Unusual circumstances led to this disaster for Medtronic and its counsel. As many readers of this blog know, the judge, not the jury, determines the scope of the patent claims in patent litigation. This is done by the judge before trial, in what is often referred to as a “Markman hearing.” The name of the hearing is based on the 1996 U.S. Supreme Court decision in Markman v. Westview, which held that patent “claim interpretation” is the province of the judge, not the jury. After the judge determines the scope of the patent and the meaning of the claims, he or she instructs the jury accordingly, and the lawyers are expected to honor the judge’s rulings and tailor their case to the judge’s pre-trial claim interpretation. So, what went wrong in the Medtronics case? Apparently, during the jury trial on infringement the lawyers for Medtronic (the plaintiff), argued outside of the scope of claim interpretation…

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Chief Judge Paul R. Michel, United States Court of Appeals for the Federal Circuit:

September 26, 2008

. . . the Supreme Court can only decide a couple of patent cases even in a banner year. And, many important patent issues may be so obscure as to discourage its generalist judges from addressing them. The rest, necessarily, are left to us. We have the expertise and the will to resolve doctrinal problems. What we lack is mainly the opportunity. Why for example did it take a full decade to revisit State Street? Because no one asked us to until recently. The same can be said of the central issue decided in KSR. It was never simply presented to us in a petition for en banc treatment. Oddly, we receive over a hundred a year. Yet few raise such fundamental issues as eligible subject matter under §101, or the Teaching-Suggestion-Motivation test, or the proper methodology for assessing requests for the permanent injunction, or barring them, future damages. Speaking at the Harvard Law School Conference On Intellectual Property Law, September 9, 2008. Click here for full text of speech.

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