Patent for Distributing Copyrighted Material Over the Internet a Possibility

Ultramercial holds a patent (the ʼ545 patent) for a method for distributing copyrighted materials over the Internet.  The consumer gains access to copyrighted materials for free in exchange for first viewing an advertisement.  The advertiser pays the licensing fee for the copyrighted material.  Ultramercial sued Hulu, YouTube and WildTangent for infringing its ʼ545 patent.  Hulu and YouTube were dismissed from the case.  The district court granted WildTangent’s motion to dismiss on the basis that the ʼ545 patent did not claim, i.e., seek to protect, patent-eligible subject matter.

On appeal, the Federal Circuit reversed the district court and remanded the case back to the district court.  The case was then appealed to the U.S. Supreme Court, which vacated the Federal Circuit’s decision.  On remand from the U.S. Supreme Court, the Federal Circuit again held that the district court erred in holding that the ʼ545 patent did not claim patent-eligible subject matter.  I think the most interesting aspect of this case is that the Federal Circuit ruled that it is possible to patent a method for distributing copyrighted content over the Internet.  The Federal Circuit did not rule on the substantive criteria regarding novelty (35 U.S.C. §102), non-obvious subject matter (§103) or the specification requirements (§112) for patent eligibility.

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IPEC Joint Strategic Plan Outlines U.S. IP Enforcement Goals and Actions

The Office of the U.S. Intellectual Property Enforcement Coordinator (IPEC) released its 2013 Joint Strategic Plan on Intellectual Property Enforcement this week.  The Joint Strategic Plan addresses Leading by Example, Transparency and Public Outreach, Ensuring Efficiency and Coordination, Enforcing Our Rights Abroad, Securing the Supply Chain and Data Driven Government.  IPEC’s primary concerns are creating American jobs, promoting the global competitiveness of American businesses and enterprises, protecting public health and safety and preserving the Constitutional rights of American citizens.  This post describes the major points of the plan and the actions items to implement the plan.

In the Introduction, the Joint Strategic Plan states

Ours is a Nation of entrepreneurs, inventors, innovators, and artists. The ideas that American citizens generate catalyze cutting edge research, ensure longer and healthier lives, and power the globe’s most productive economy. Our ingenuity and entrepreneurial spirit make the United States great, and we must fiercely defend that competitive advantage. As President Obama has said, ‘if the playing field is level, I promise you—America will always win.’ (pdf page 5).

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Ghost Rider Comic Copyright Dispute Confirms 1909 Act Still Relevant

Gary Friedrich Enterprises, LLC v. Marvel Characters, Inc., involves a work created before the Copyright Act of 1976, the vesting of the renewal copyright in the original author, Gary Friedrich, and the effect of a work made for hire agreement signed by Friedrich in 1978.  Friedrich, creator of the Ghost Rider comic strip, filed and received a Renewal Copyright Registration for Ghost Rider in 2007.  Friedrich filed a complaint against Marvel for copyright infringement shortly after renewing Ghost Rider’s copyright registration.  Marvel claimed that Ghost Rider was a work made for hire. 

The district court ruled that when Friedrich executed a form work for hire agreement in 1978, he assigned his rights to Marvel, including his rights in the renewal term.  The district court further granted Marvel’s motion for summary judgment, awarded damages to Marvel for Friedrich’s copyright infringement and enjoined Friedrich from using his Ghost Rider renewal registration.  The Second Circuit vacated the district court’s judgment and remanded the case.

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Trade Secrets Claim Results from Copyright Infringement Investigation

nexTUNE, a Washington corporation, provides digital music services to businesses and individuals.  Over a period of more than six years, nexTUNE developed music delivery technologies that it considered trade secrets.  EMI Music is a major music company.  EMI sent nexTUNE a cease and desist letter, which accused nexTUNE of copyright infringement.  EMI then requested information about nexTUNE’s music services in connection with its investigation of nexTUNE’s claim that a statutory license covered nexTUNE’s use of EMI’s copyrighted sound recordings.  nexTUNE agreed to provide the information requested, on the condition that it be kept confidential.  nexTUNE’s president met with EMI’s outside counsel, Buck McKinney and Christopher Harrison, in Austin, Texas, and provided the requested information.  In a phone conversation before the meeting, McKinney agreed to keep the information confidential.  At the meeting, nexTUNE’s president recognized Harrison as someone who was working for a nexTUNE direct competitor and had previously worked for other nexTUNE’s direct competitors.

nexTUNE sued EMI, McKinney and Harrison in the Western District of Washington, alleging non-infringement of EMI’s copyrights (a federal law claim) and misappropriation of trade secrets (a state law claim).  Harrison moved to dismiss the trade secret misappropriation claim against him for lack of personal jurisdiction (FRCP 12(b)(2)) and failure to state a claim upon which relief can be granted (FRCP 12(b)(6)).  McKinney moved to dismiss the trade secret claim against him for lack of subject matter jurisdiction (FRCP 12(b)(1)) and lack of personal jurisdiction.  EMI moved to dismiss the trade secret claim against it for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted.  The district court granted Harrison’s motion to dismiss for lack of personal jurisdiction, but denied McKinney’s motion.  The district court granted McKinney’s and EMI’s motions to dismiss for lack of subject matter jurisdiction without prejudice and with leave to amend the complaint.  EMI’s motion to dismiss for failure to state a claim was granted and the claim dismissed without prejudice.

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