by Lee Gesmer | Jul 22, 2008 | Antitrust, Technology
Nvidia has filed a Sherman Act complaint against Rambus in federal district court in North Carolina. The allegations appear to echo (copy?) the allegations in the FTC case I reported on recently, where the D.C. Circuit reversed the FTC’s finding of illegal monopolization by Rambus. Can Rambus file a successful motion to dismiss in this new case based on the D.C. Circuit’s decision? Very likely.
Why did Nvidia file this suit? My first thought is that Nvidia was concerned about a statute of limitations problem, and this filing (even if dismissed by the District Court) will allow them to appeal and keep their claims alive during the FTC’s motion for en banc review that is pending before the D.C. Circuit, and during a possible Supreme Court appeal by the FTC. Alternatively, they may be hoping that a district court in the Fourth Circuit (or even the Fourth Circuit itself), will see things differently from the D.C. Circuit, and allow their case to proceed.
by Lee Gesmer | Jul 22, 2008 | Procedure, Technology
After writing the post immediately below it occurred to me that although there is much talk about the discovery of electronically stored evidence (ESI), the admissibility of ESI is addressed far less often. In fact, in the two day conference I linked to in that post, the topic is not even mentioned.
For the interested, there are two important starting places for this topic. The first is the 101 page decision in Lorraine v. Markel American Insurance Company by Magistrate Judge Paul Grimm (one of the “rock star judges” mentioned in the ABA article), and the second is The Next Frontier: Admissibility of Electronic Evidence (Listrom, Harlan, Ferguson and Redis). (Note: this last link is on the ABA website and appears to require an ABA membership user name/password; as yet I am unable to locate a copy anywhere else).
by Lee Gesmer | Jul 21, 2008 | Courts, Litigation, Technology
Anytime these judges write an opinion, it’s treated like a papal encyclical,” . . . They really influence other judges, who act like these are the rock stars of their profession. . . These ‘rock star’ judges are not surprised that they, and not the new rules, are still the final word in e-discovery. . . .
Quoted from Rockin’ Out the E-Law, ABA Journal, July 2008.
Rock star judges, huh? OK, I’m trying not to wince, laugh or, well, you know… The American Bar Association needs to sell its publications, so you can’t blame them too much, I suppose.
In any event, this article names several judges as prominent in the area of discovery of electronically stored evidence (“ESI”), including Chief Magistrate Judge Paul Grimm of the U.S. District Court for the District of Maryland, Se
by Lee Gesmer | Jul 8, 2008 | Technology
“You have no privacy. Get over it.”
Scott McNealy
——————————
The Internet and the press are abuzz with the potential privacy issues raised by the federal court order requiring YouTube and Google to produce the YouTube “Logging database.” This database is described in the court order as follows:
[the database] contains, for each instance a video is watched, the unique “login ID” of the user who watched it, the time when the user started to watch the video, the internet protocol address other devices connected to the internet use to identify the user’s computer (“IP address”), and the identifier for the video. . . . That database (which is stored on live computer hard drives) is the only existing record of how often each video has been viewed during various time periods. Its data can “recreate the number of views for any particular day of a video.” [Viacom] seek[s] all data from the Logging database concerning each time a YouTube video has been viewed on the YouTube website or through embedding on a third-party
website.
In addition to this database, YouTube was ordered to produce copies of the millions of videos that had been deleted from YouTube.
Whew! Just a few, eh? My favorite quote from this decision is the judge’s offhand comment that “while the Logging database is large, all of its contents can be copied onto a few “over-the-shelf” four-terabyte hard drives.” (Sorry Judge, you can’t get those at Best Buy ….).
This order, when complied with, is certain to set a new record for a document production in U.S. litigation, or for that matter litigation anywhere, ever. Twelve terabytes (three four-terabyte drives) would hold 12 thousand billions bytes (or characters). Thats 12 trillion bytes, or 12 followed by 12 zeros.
Google is involved in a separate copyright suit over Google Book Search, and all of this makes me wonder what will happen if Google is ordered, in that case, to produce the digital database of all the books that it has scanned. How many bytes would that be? A googol?
Judge have fully caught on to the fact that in electronic discovery size just doesn’t matter. No lawyer will ever again be able to say, with a straight face, those venerable words that applied for so many years to paper document productions: “that’s too much data, your Honor. It would be overly burdensome.” With this court order electronic discovery has truly entered a new era.
by Lee Gesmer | Jun 8, 2008 | Procedure, Technology
Sometimes being a lawyer is like being an airline pilot – hundreds of hours of tedium, interrupted by moments of sheer panic.
In the case of lawyers, the panic can hit from a number of sources: a missed court filing date or statute of limitations, the discovery during trial that your client has failed to produce key documents during discovery, the failure to discover a controlling legal precedent, the realization that a client has lied to you, or “inadvertant disclosure.”
To lawyers, the term “inadvertant disclosure” means that during discovery documents protected by attorney-client privilege or work-product immunity have been produced to the other side, by mistake. You (the disclosing attorney) usually learn of this when the opposing lawyer calls you up to gloat (under the guise of politely informing you of the incident, which is required under the ethical rules). It’s enough to ruin any lawyers day: you demand (or beg for) the return of the documents; the opposing lawyer refuses; you file a motion with the court asking for an order that the documents be returned to you (after that embarrassing call to your client); the other side opposes your motion; and finally, the judge writes a decision ruling one way or the other on your request for return, but in either case informing the world of what a sloppy or incompetent lawyer you were to have produced the documents in the first place.
Of course, a whole body of case law has emerged establishing legal tests for whether documents should be returned in these situations. To make things worse, different courts around the nation have created different tests. To make matter much worse ESI (electronically stored information) has made the whole process far more complicated than in the “old days,” when lawyers or paralegals could simply look through hard copy before production, and be reasonably confident they had caught any privileged documents.
The risks and technical issues associated with privilege review of ESI are illustrated by a May 29, 2008 decision by a judge in the Federal District Court for the District of Maryland. In this case, Victor Stanley, Inc. v. Creative Pipe, Inc., a large quantity of ESI was produced by the defendant. The defendant tried to weed out privileged documents by using a “key word” search. For example, the names of the defendant’s attorneys were searched, in the hope that all communications with defendant’s counsel would be located and the items removed.
In this case the keyword search method failed, and the judge ruled that keyword searching for privileged and work-product documents was not
sufficient to avoid a “waiver.” The decision (linked below via scribd.com) is quite detailed, and provides a good analysis of the risks associated with inadvertent production of ESI based on a keyword search failure.
Of course, there is a potential solution to this problem that ESI savvy lawyers tend to use: in the protective order filed with the Court early in the case (or separately if there is no protective order), include a “clawback” provision that provides that if either side engages in inadvertent production, the waiver doctrine will not apply and the documents will be returned. Especially at the beginning of a case, when the risk of inadvertent production may be viewed as equal by both sides, the lawyers on each side may conclude that it’s in their best interests to agree to clawback.
Here is a sample “clawback” provision:
1. Inadvertent or Unintentional Production
(a) The inadvertent or unintentional production of Discovery Materials without a confidentiality designation shall not be deemed a waiver in whole or in part of a party’s claim of confidential treatment under the terms of this Order. Any document that initially is produced without bearing a confidentiality designation may later be so designated, with respect to future disclosure by the Producing Party, and the receiving party shall make all reasonable efforts to retrieve all copies, if any, of such document disclosed to persons other than those authorized in Sections 6 through 8 hereof and to prevent further use or disclosure of confidential information contained therein by such persons.
(b) If information subject to a claim of attorney-client privilege, attorney work product or any other legal privilege protecting information from discovery is inadvertently produced to a party or parties, such production shall in no way prejudice or otherwise constitute a waiver of, or estoppel as to, any claim of privilege, work product or other ground for withholding production to which the producing party or other person otherwise would be entitled. If a claim of inadvertent production is made pursuant to this Section, with respect to information then in the custody of another party, such party promptly shall return to the claiming party or person that material and all copies or reproductions thereof as to which the claim of inadvertent production has been made, shall destroy all notes or other work product reflecting the contents of such material, and shall delete such material from any litigation-support or other database. The provisions of this Section shall not be deemed to prevent any party from seeking an order compelling production of any document or information, including documents or information contained in documents that are returned as a result of a claim of inadvertent production.
Link to the case: Victor Stanley, Inc. v. Creative Pipe, Inc.
by Lee Gesmer | May 23, 2008 | Readings and Novelties, Technology
If you have a home delivery subscription to the New York Times (even only the Sunday Times), check out the TimesMachine — a collection of full-page image scans of the newspaper from 1851-1922. That’s every issue and every page and article, advertisements and all, viewable in their original format.
April 16, 1912
To read how this was done, click here.
“Using Amazon Web Services, Hadoop and our own code, we ingested 405,000 very large TIFF images, 3.3 million articles in SGML and 405,000 xml files mapping articles to rectangular regions in the TIFF’s. This data was converted to a more web-friendly 810,000 PNG images (thumbnails and full images) and 405,000 JavaScript files – all of it ready to be assembled into a TimesMachine. . . . “
by Lee Gesmer | May 22, 2008 | Antitrust, Patents, Technology
The “Rambus litigation” in all its many permutations — Justice Department investigation, FTC proceedings and multiple civil cases — has been documented and commented upon widely. For a recap see Andy Updegrove’s article here. At the heart of the legal controversy is the allegation that during the 1990s Rambus, the owner of key DRAM patents or pending patents that solved the CPU-memory chip “bottleneck” problem, failed to disclose these patents to JEDEC, an important standards-setting organization (“SSO”) to which Rambus belonged. JEDEC, uninformed of the existence of these patents, incorporated the Rambus technology in its standards, which were then widely adopted in the memory chip market.
Because Rambus withheld disclosure of its patents, JEDEC did not have the opportunity to exercise either of the two options open to it when a member disclosed proprietary technology: either choose another technology or negotiate industry-wide favorable licensing terms as a condition of adoption of the standard (so-called “reasonable and non-discriminatory” license fees, or”RAND” royalties). RAND royalties are negotiated and agreed-upon ex ante, that is, before the technology owner’s IP is adopted, and therefore before the technology owner acquires market power by reason of the adoption.
By the time Rambus announced its patents and began demanding royalties (and filing patent infringement suits against companies that refused to pay royalties), Rambus had achieved a technical “lock-in” that made it difficult for the memory chip industry to move to a different technology. Rambus’s lock-in allowed it to obtain a 90% market-share, and demand supracompetitive royalties from companies that were producing JEDEC-compliant memory devices. Rambus has earned several billion dollars in licensing fees to date, and by some estimates its total royalties could reach as high as $11 billion.
The FTC Decision
The Federal Trade Commission brought proceedings against Rambus, and issued a 120 page decision in 2006 holding that Rambus was guilty of monopolization in violation of Section 5 of the FTC Act. The FTC issued a remedial order mandating the maximum royalties that Rambus would be permitted to charge.
The FTC’s key conclusions were:
- In the early 1990s Rambus engaged in a multi-year, intentional campaign to conceal its pending patents from JEDEC, in violation of JEDEC policies that required disclosure from members. Rambus’s actions constituted a “deliberate course of deceptive conduct” and were calculated to mislead JEDEC. Rambus even went to far as to tailor its patent claims to cover parts of the proposed standards. As a result, JEDEC was unaware of the patents and pending applications when it adopted the standard. The FTC emphasized that Rambus’s conduct occurred in the context of an industry standard-setting process, where members had a legitimate expectation of good faith and candor.
- Rambus’s deception was material, and led to JEDEC adopting the Rambus IP in its standards.
- “But for” Rambus’s deception, JEDEC would have either excluded Rambus’s technologies from the DRAM standards, or would have demanded assurances of reasonable royalties before adopting the technologies. The FTC specifically found that alternative technologies were available that would have provided an alternative to the Rambus technologies, had Rambus been unwilling to negotiate RAND royalties.
- Once the standards were adopted and implemented by chip manufacturers the cost and technical obstacles to switching technologies were significant, and as a result the industry was “locked-in” to the Rambus technology.
- As a result of Rambus’s actions, JEDEC’s adoption of the Rambus technology, and the lock-in effect, Rambus acquired monopoly power – a more than 90% market share in the relevant market. The FTC found that the legal requirement of a “causal link” between Rambus’s conduct and its achievement of monopoly power had been established.
- Rambus’s actions allowed it to charge supracompetitive patent royalties, unconstrained by competition. This harm to competition led to reduced output and decreased overall social welfare.
The FTC rejected Rambus’s “inevitability/superiority” argument: that even in the light of full disclosure JEDEC would have standardized on Rambus’s technologies due to their superiority. The FTC also rejected Rambus’s argument that Rambus’s monopoly power was not enduring because there were no barriers to entry to rivals wishing to challenge its monopoly position. The FTC held that the DRAM industry was locked into the JEDEC/Rambus standards due to switching costs and issues of backward compatibility.
Rambus’s Appeal to the D.C. Circuit
Rambus appealed, and the D.C. Circuit reversed the FTC decision on April 22, 2008. However, the D.C. Circuit was severely constrained in its ability to review the FTC decision. While a federal appeals court has the authority, on appeal, to review, de novo, purely legal issues decided by the FTC, the FTC’s factual findings are conclusive if supported by “substantial evidence.” The FTC’s factual findings were extensive; therefore, the path of least resistance for the D.C. Circuit was to focus on “legal” issues.
Rambus and “Antitrust Injury”
The D.C. Circuit took a legally complex and circuitous path to get to what it concluded was the core issue in the case. That process is itself highly questionable — the D.C. Circuit appears to have misapplied the standard of proof for causation in a case of this sort. In essence, the FTC drew legal inferences in favor of Rambus based on the FTC’s inability to analyze Rambus’s conduct within the context of a hypothetical marketplace that never existed because of Rambus’s fraudulent actions.
Using this reasoning, the court narrowed the case to what it considered to be the key “legal” issue: whether Rambus’s deception caused “antitrust injury” by preventing JEDEC from negotiating RAND royalties before adopting the Rambus technology. The answer to this question is critical, since the Supreme Court has repeatedly warned that conduct evaluated under the rule of reason that harms competitors is not enough, alone, to violate the antitrust laws – the conduct must harm competition. However, what constitutes harm to competition, or “antitrust injury” is a perplexing question. Often, this mantra is simplified to mean harm to consumers, who are the beneficiaries of competition. However, this is an oversimplification — the distinction between harm to competitors and harm to competition is as much a question of economic theory as of law. As George Bernard Shaw famously noted, if all economists were laid end to end, they would not reach a conclusion. The idea of federal judges, who are self-taught in economics at best, applying economics wrapped in the suffocating folds of stare decisis would have left Shaw (and probably even Oscar Wilde) without a bon mot.
Here is the Court’s conclusion on this issue:
JEDEC lost only an opportunity to secure a RAND commitment from Rambus. But loss of such a commitment is not a harm to competition from alternative technologies in the relevant markets. . . . Indeed, had JEDEC limited Rambus to reasonable royalties and required it to provide licenses on a nondiscriminatory basis, we would expect less competition from alternative technologies, not more; high prices and constrained output tend to attract competitors, not to repel them.
The D.C. Circuit went on to reject the arguments that (a) “price raising deception” of the sort alleged against Rambus resulting in higher royalty payments to Rambus was competitive harm, and (b) Rambus’ patents put it in a position of monopoly power, and any conduct that permitted a monopolist to avoid restraints on that power must be anticompetitive. As the D.C. Circuit put it, “an otherwise lawful monopolist’s end-run around price constraints, even when deceptive or fraudulent, does not alone present a harm to competition in the monopolized marketplace.”
D.C. Circuit’s Misplaced Reliance on NYNEX v. Discon
In reaching the conclusion that Rambus’s actions did not present a “harm to competition,” the D.C. Circuit relied almost entirely on the Supreme Court’s 1998 decision in NYNEX Corp. v. Discon. However, the NYNEX decision was largely concerned with whether so-called “two firm boycotts,” which is a vertical arrangement (as opposed to a horizontal “group boycott”), should be reviewed under the rule of reason or put in the forbidden “per se” category of antitrust violations. Boycotts – two firm or multifirm — were not at issue in FTC/Rambus, and in its 90 page appellate brief opposing Rambus’ appeal, the FTC didn’t mention the Discon case at all. Indeed, Rambus itself touched on NYNEX v. Discon only in passing in its appeal brief and its reply brief.
The D.C. Circuit’s seized on NYNEX as if it were a drowning man reaching for a life preserver. A secondary issue in NYNEX was the allegation that the defendants were engaged in a complex kickback scheme, a “regulatory fraud,” that allowed them to perpetuate market power. The Supreme Court found that this conduct, although fraudulent and deceptive, did not create a basis upon which to apply the per se rule to an alleged boycott with no horizontal elements. Additionally, the Supreme Court noted that there was competition in the affected market, indicating that although there was harm to the plaintiff, Discon, there was no injury to competition, the sine qua non of an antitrust violation. The Supreme Court noted that “the complaint itself … suggests the presence of other or potential competitors, which fact … could argue against the likelihood of competitive harm . . . entry was easy, perhaps to the point where other firms . . . might have entered that business almost at will.”
The ease of entry by competitors that caused the Supreme Court to suggest the absence of antitrust injury in Discon was not present in FTC/Rambus. As noted above, the FTC found that the industry was “locked-in” to the Rambus technology, and therefore there were no alternatives that could act as a competitive restraint on Rambus’s ability to overprice its patent licenses. Also, as noted, the FTC expressly rejected Rambus’s argument that its monopoly was not “enduring” due to the potential entry of competitors. These “findings of fact” by the FTC were not challenged by the D.C. Circuit, and they distinguish the analysis of the “harm to competition” in NYNEX from the “harm to competition” in the Rambus DRAM market completely.
Finally, the D.C. Circuit’s finding that Rambus’s “price raising” conduct did not give rise to the sort of competitive harm addressed by the antitrust laws was presented without any economic basis or discussion, and appears faulty. By charging supracompetitive royalty rates Rambus raised the cost of a key component of the products the DRAM chips were used in. Under any rationale view of economic theory or antitrust precedent, the higher prices charged by Rambus, given the absence of entrants that could drive down prices, constituted harm to consumers, and therefore “antitrust injury.”
Appeal or Defeat?
The FTC has a number of options open to it: a request for rehearing en bank to the D.C. Circuit, a retrial of some issues at the FTC, a Supreme Court appeal, or no action at all, which would be an admission of defeat.
It appears that this case would be ripe for an appeal (recognizing, of course, that the Supreme Court has discretion to take appeals, and takes very few each year). An appeal, if granted, would allow the Supreme Court to clarify its views on antitrust injury in the context of patent disclosures to a standard-setting organization, something it has never done. An appeal might resolve the many questions that are now outstanding following the D.C. Circuit’s in Rambus. The importance of this to the health of the standards-setting process is almost impossible to overstate.
However, the FTC’s decision to appeal to the U.S. Supreme Court must be informed by the reality that the Supreme Court has overwhelmingly favored antitrust defendants since 2004, and therefore the mathematical odds alone disfavor success on an appeal. However, one would hope that a Supreme Court appeal would allow the Court to make it clear that a deceptive failure to disclose its technology to a standard setting organization, enabling the patentholder, as a result, to charge supracompetitive royalty rates and obtain monopoly power, is exactly the kind of economic behavior that the antitrust laws are designed to prevent.
by Lee Gesmer | Feb 5, 2008 | Courts, Technology
Judges need to keep learning too, and a major source of education for them is the Federal Judicial Center, an organization dedicated to judicial education.
In fact, the FJC site is pretty cool. For example, here is a page that provides the biography of every federal judge (all courts, from District Court to Supreme Court), since 1789. Here is the bio of Judge Andrew A. Caffrey (deceased), who made me sweat quite a bit during this 37 day trial back in the early 1980s.
In any event, the FJC publishes various learning materials for judges, and last year they published a short work titled, Managing Discovery of Electronic Information: A Pocket Guide for Judges, authored by Judge Barbara J. Rothstein and former U.S. Magistrate Ronald J. Hedges.
As I’ve noted in the past, electronically stored information (or ESI, as its known), presents enormous challenges to lawyers and judges, almost all of whom were educated long before the last decade’s explosion in ESI. This Pocket Guide is important reading for lawyers practicing in the federal courts since it’s reasonable to assume that (a) the federal judge before whom you’re appearing probably has a copy sitting on the corner of his or her desk, gratis from the FJC, and (b) it may constitute the entirety, or close to it, of what the judge knows about ESI.
by Lee Gesmer | Jun 19, 2007 | Technology
When I began to practice in the area of technology law area in the early 1980s one of the issues we often brought up with clients was the need to get clear ownership assignment of their technology. We wrote articles about this, spoke on the topic, and generally beat the subject to death in publications and seminars.
It’s surprising (but not too surprising) that seemingly sophisticated businessmen still don’t focus on this.
Two cases we recently settled are illustrative of this issue.
In the first case, a start-up company hired a part-time/consultant level programmer. He ultimately became an “employee,” but the company allegedly failed to fulfill some of the obligations in his employment agreement, and failed to treat him as an employee in all respects, raising an issue as to whether he truly became an “employee” for legal purposes. In any event, even under the best of circumstances, some of the programming he did occurred before he became an “employee.”
After the programmer left the company under unpleasant circumstances, he claimed ownership of the software. Following substantial and expensive litigation our firm was brought into the case and we successfully settled it shortly thereafter (based on the ongoing costs of the litigation and our assessment of the risks to our client). The settlement included a full assignment by the programmer, but it cost the client a great deal of money (for a start-up) in fees, settlement monies, and time away from the client’s core business. The client had a very strong argument that, regardless of the plaintiff’s status as a consultant or an employee, his actions had created an implied, unrestricted perpetual license. However, even if the client had won on this theory (after summary judgment motions and possibly a trial), there still would have been uncertainty over the client’s ability to transfer ownership of the software product, either through a direct sale of the software or a sale of the company. The legal uncertainties associated with this issue were what led to the settlement. The price: $200,000 for settlement alone.
In the second case a well-established client (new to our firm), experienced almost exactly the same situation. Here, the programmer had been “leased” to our client by a small employment agency. After the programmer quit, the agency (not the programmer) claimed ownership or co-ownership of the software developed by their employee. Our client had failed to enter into an agreement with the agency assigning ownership of work performed by agency employees to our client. The price, reached in settlement before suit was filed: $300,000 in settlement monies.
Between these two clients, this was $500,000 in wasted money, not to mention legal fees, costs and time away from their businesses, which adds substantially to this cost.
Remember: If you own a company that develops intellectual property, get a written assignment of ownership from everyone who develops intellectual property for you. The assignment should include copyright, patent and trade secret rights. It’s that easy.
by Lee Gesmer | Oct 26, 2006 | Courts, Litigation, Technology
The best aspect of law school is the subordination of math.
Anon
________
The schematic displayed above (click for a blow up in pdf format) is a simplified illustration of a corporate network which Microsoft provided to the Federal Rules Committee in connection with proceedings on electronic evidence. It was intended to illustrate a generic corporate computer network.
If you are a lawyer and this seems like an alien concept that no lawyer should ever be required to understand, you’re not alone. Lets face it – like most stereotypes, the old joke that lawyers go to law school to avoid math and technology contains a large element of truth.
So, it’s not hard to sense the anxiety emanating from the hallways of the nation’s law offices as the electronic discovery tsunami picks up speed. Yes, there’s a new technology boom, but it’s not the kind that sent clients flocking to their lawyers for legal representation in the 1990s. Many lawyers in their 50s and 60s can barely find the caps lock key on a computer keyboard, much less learn the intricacies of “IT“.
Nevertheless, every day emails and brochures arrive announcing seminars and warning that the era of electronic data discovery (EDD) has finally, truly arrived. Luddite lawyers are warned that –
- 99% of all documents created today are in electronic form.
- Changes to the federal rules of civil procedure that will take effect on December 1st will require lawyers to be far more familiar with client information systems than in the past, and to work cooperatively with opposing counsel to preserve, retrieve and produce electronic data.
- Ignorance of the law (or of technology) is not a defense (!) The poster child for just how bad this can get is the Morgan Stanley case in Florida, where the trial judge ordered the jury to draw an adverse inference based on Morgan Stanley’s failure to turn over electronic documents, leading to a $600 million plus jury verdict against Morgan Stanley.
Of course, the law being what it is, the full implications of all of this are impossible to forsee. And the more you think about it, the worse it gets. How do you locate relevant electronic data in your client’s network? How do you review electronic data for relevance, work product and privilege? How do you designate individual documents “confidential” or “attorney’s eyes only” when they are part of a massive data file? How do you capture metadata? (What is metadata? Helpful hint: “metadata is information about information”). How do you capture and review data that uses software systems the client has abandoned (a surprisingly common problem)? How do you ensure that attachments accompany their original emails?
If you think the last question doesn’t present a problem, our firm can tell you about an opposing party that produced a massive Outlook email file that had been converted to an ASCII text file, and in the process had all the attachments stripped away. It took quite a bit of explaining on our part for the opposing lawyer to even understand the problem. Then, rather than incur the cost of reviewing this mass of material, the opposing party produced its entire email database for a several year period, disclosing not only irrelevant, privileged and technical client information, but personal medical records of employees.
Of course, what’s bad for the lawyers and courts is always good for the experts. The demand for computer forensic experts that can address these questions (and a hundred more), as well as take potshots at the opposing party’s EDD, will undoubtedly flourish. Kroll has already staked out a big piece of this business, but there is room for countless smaller players as the industry evolves. Courts and lawyers can’t possibly be expected to understand all of this stuff themselves. In the end, the losers will be the lawyers and law firms that can’t master this process, and the clients who are forced to pay for it.
by Lee Gesmer | Sep 21, 2006 | Patents, Technology
Patents. Over the last 20 years the conventional wisdom has been that patents are inimical to software innovation in the U.S. Many prominent software developers and industry luminaries have argued this position.
Here is a link to a paper by Professor Robert Merges of the University of California Law School at Berkeley arguing the contrary view: that software patents have had a negligible impact, if any, on innovation in the industry. Here is the abstract:
In the late 1980s and early 1990s, people in the software industry often said that the coming of patents would spell doom, particularly for small companies. The entry of new firms – the seabed of growth in the industry – would dry up, and only large, bureaucratic and decidedly non-innovative firms would remain. This paper concludes that these predictions were wrong. New firm entry remains robust, despite the presence of patents (and, in some cases, perhaps because of them). Successful incumbent firms have adjusted to the advent of patents by learning to put a reasonable amount of effort into the acquisition of patents and the building of patent portfolios. Patent data on incumbent firms shows that several well-accepted measures of “patent effort” correlate closely with indicators of market success such as revenue and employee growth. Whatever the effect of patents on the software industry, this paper concludes, they have not killed it.
Here is a link to the paper.
by Lee Gesmer | Sep 19, 2006 | Technology
Technology. Do you know what Wikipedia is? Did you know that this open source encyclopedia covers 1,391,807 topics (in the English version, as of this writing)? That it may be (or soon become) the greatest collaborative knowledge gathering effort the world has ever known? That it is the 17th most popular site on the Internet, receiving 14,000 hits per second? That you can find a topic in Wikipedia by simply entering “wiki” at the end of a Google search? (e.g., Lost TV show wiki)?
If you’re interested in understanding the origins, goals and inner-workings of this astonishing phenomenon, I recommend these two articles from The Atlantic and The New Yorker, respectively:
