The U.S. Supreme Court will rule for the first time in decades on patent protection for computer software, taking up a case that has divided the industry and may reverberate through the American economy.
The justices agreed Dec. 6 to hear arguments on a patented system for limiting the risk that one party to a derivative trade won’t follow through on its obligations. The case splintered a federal appeals court in a ruling that one judge said called hundreds of thousands of patents into question.
On one side of the debate are Google Inc. (GOOG:US), Facebook Inc. (FB:US) and JPMorgan Chase & Co. (JPM:US), which say patent standards for software are too lax and open companies to unwarranted lawsuits. On the other are Microsoft Corp. (MSFT:US) and Oracle Corp. (ORCL:US), whose trade group told the appeals court that limiting protection for genuine innovation might hurt the nation’s economy.
The Supreme Court has struggled to decide what types of innovations qualify for patent coverage, generally imposing some limits without drawing categorical lines against legal protection.
In 2010, the justices divided over the rules governing patents for business methods, and last year the court limited patents for diagnostic medical tests. Most recently, in June, the court restricted companies’ ability to patent human genetic sequences. The Supreme Court has never directly said that software can be patented, although cases in the 1970s and 1980s involved software-related inventions.
The case centers on claims that CLS Bank International infringed patents owned by Alice Corp., a Melbourne-based company partially owned by National Australia Bank Ltd. (NAB)
The software-patenting issue left the 10-member U.S. Court of Appeals for the Federal Circuit unable to produce a majority opinion.
The judges instead produced six separate opinions covering 125 pages. A majority said aspects of Alice’s patents covering a method of performing the idea weren’t eligible for protection, while the judges were evenly split regarding systems to implement that idea.
The Supreme Court will hear arguments in March or April and rule by July.
The case is Alice v. CLS Bank International, 13-298.
Petronas Claim Against GoDaddy Properly Dismissed, Court Says
Petroliam Nasional Berhad, the Malaysian oil company known as Petronas, failed to persuade a federal appeals court to hold an Internet domain registrar liable for inducing violation of the 1999 Anticybersquatting Consumer Protection Act.
The oil company sued Go Daddy Group Inc.’s GoDaddy.com Inc. unit after it discovered that the registrar’s domain name forwarding service had been used to direct the domain names petronastower.net and petronastowers.net to a pornographic website.
Kuala Lampur-based Petronas had argued that the domain registrar contributed to the infringement of the oil company’s trademarks and should be held liable for the actions of the registrar’s customers.
After Petronas made its initial complaint, Scottsdale, Arizona-based GoDaddy investigated the issue and took no action because it didn’t host the offending site itself and under the Uniform Domain Name Dispute Registration, it is barred from participating in trademark disputes over domain ownership.
The oil company then sued in a California federal court, which dismissed the case in January 2012. Petronas filed an appeal with the U.S. Court of Appeals for the Ninth Circuit.
In its Dec. 4 ruling, the appeals court said the claims were properly dismissed. The Anti-Cybersquatting act doesn’t provide for indirect liability for domain registrars, the court ruled. Focusing on direct liability “spares neutral third party service providers from having to divine the intent of their customers,” the court said.
The appeal is Petroliam Nasional Berhad v. GoDaddy.com Inc., 12-15584, U.S. Court of Appeals for the Ninth Circuit. The lower court case is Petroliam Nasional Berhad v. GoDaddy.com Inc., 4:09-cv-05939, U.S. District Court, Northern District of California (Oakland).
RPX Fails to Win Dismissal of Patent-Licensing Antitrust Suit
RPX Corp. (RPXC:US), a patent risk-management company, lost its bid for dismissal of an antitrust case brought by a patent owner.
Cascades Computer Innovation sued in federal court in Oakland, California, in March 2012, alleging that a group of technology companies and RPX had conspired to oppose licensing and enforcement of its patents, with the ultimate aim of forcing Cascades to go out of business or accept a below-market offer for the licenses.
Cascades doesn’t manufacture goods based on the patents it is asserting. As such, it is characterized as a “non-practicing entity” that seeks to generate revenues through patent licensing. Such companies are sometimes known pejoratively as “patent trolls.”
In a Jan. 24 ruling, U.S. District Judge Yvonne Gonzalez Rogers granted the defendants’ motions to dismiss the case. The defendant companies remaining in the case are Samsung Electronics Co. and HTC Corp. The judge gave Northbrook, Illinois-based Cascades an opportunity to amend its claims and refile its complaint.
Cascades filed an amended complaint in February, after which San Francisco-based RPX asked the court to dismiss the case. Rogers filed her order denying that request on Dec. 3.
She said in her order that the amended complaint differed from the original by “raising a reasonable inference” that the manufacturing companies and RPX did engage in a conspiracy to force sub-competitive pricing for Cascades patent licenses.
The case is Cascades Computer Innovation LLC v. RPX Corp., 12-cv-01143, U.S. District Court, Northern District of California (Oakland).
Columbia University Sues Symantec Over Patent Inventorship
Symantec Corp. (SYMC:US), a provider of security, storage and systems management services, was sued by Columbia University in a dispute over patent inventorship.
The lawsuit, filed Dec. 5 in federal court in Richmond, Virginia, stems from a collaboration between the university and Mountain View, California-based Symantec on computer security for the federal government. Columbia claims that Symantec adopted the work of university researchers and filed patent applications based on that work without crediting them.
The disputed patent -- 8,549,643 -- was issued Oct. 1, with a Symantec employee listed as the sole inventor, according to court papers.
New York’s Columbia University also claims that five of its patents are infringed by Symantec anti-virus and computer-security software patents. The school asked for a court order barring further infringement and the addition of two of its researchers’ names as inventors on the disputed patent.
The school also requested awards of money damages, litigation costs and attorney fees.
A Symantec spokesman, Noah Edwardsen, said in an e-mail that his company doesn’t comment on pending litigation.
The case is Trustees of Columbia University v. Symantec Corp., 13-cv-00808, U.S. District Court, Eastern District of Virginia (Richmond).
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Apple Argues Consumers Associate ‘App’ With Company
Apple Inc. (AAPL:US), maker of the iPhone and the iPod, told an Australian court that when it began using the term “App Store,” the word “app” was viewed by consumers as something associated with the Cupertino, California-based company’s products, ZD Net reported.
Apple was in court last week appealing revocation of its Australian “App Store” trademark, with the matter now under submission to the court, ZD Net reported.
Julia Baird, counsel for the Australian Registrar of Trademarks, argued that Apple’s App Store was merely a visual catalog of its offerings and conceptually no different from a traditional store, according to ZD Net.
Baird said the Oxford English Dictionary settled on the use of “app” to describe computer applications in 2000, eight years before Apple filed its Australian trademark application, according to ZD Net.
For more trademark news, click here.
U.K. Resident Begins Jail Term for Criminal Copyright Offense
A U.K. resident who pleaded guilty to criminal copyright infringement, money laundering, transferring criminal property and illegal possession of pepper spray and firearms, began serving his 18-month jail term last week, the U.K.’s Argus newspaper reported.
Keith Tamkin, 52, was found possessing more than 100 computer hard drives, 150,000 CDs and DVDs and eight devices used to burn discs with unauthorized copies of films, music and software, and a catalog of 25,000 titles he distributed, according to the Argus.
David Wood, who leads anti-piracy efforts for BPI, a U.K. music-industry trade group, told the Argus that Tamkin ran one of the largest “domestic factories” for the production of counterfeit music products.
Local police said they will seek a confiscation order against Tamkin under the U.K.’s Proceeds of Crime Act, according to the Argus.
For more copyright news, click here.
Trade Secrets/Industrial Espionage
SolarCity Sues Soligent Distribution for Trade Secret Theft
SolarCity Corp. (SCTY:US), a provider of solar-power energy services, sued a California competitor for trade secret misappropriation.
The lawsuit, filed Dec. 2 in California state court, alleges that Soligent Distribution LLC of Rohnert Park, California, hired SolarCity employees in order to acquire the company’s trade secrets.
Although the ex-SolarCity employees had agreed not to release the company’s confidential information to others, at least one of them accessed his former company’s sales force database after termination of his employment, the company said in its court filing.
SolarCity also alleges that Soligent instructed or encouraged the former employees to bring their company’s trade secrets with them to their new job.
The San Mateo-based company asked the court to bar the use of its trade secrets by Soligent and to prohibit the company from directly or indirectly approaching SolarCity customers for two years. Additionally, SolarCity asked that its ex-employees be barred from soliciting any present employee of the company to leave SolarCity.
The company also asked for awards of money damages, including extra damages to punish Soligent for its actions, together with attorney fees and litigation costs. None of the ex-employees are named as defendants.
Soligent said today in a statement that SolarCity refused to respond to efforts to address the allegations without litigation. SolarCity’s lawsuit “lacks merit,” Soligent said.
“While it is true that Soligent has hired certain former SolarCity employees, it has put in place measures to ensure that they have not taken and are not using any SolarCity information that could be construed as either confidential or trade secrets,” according to the statement.
The case is SolarCity Corp. v. Soligent Distribution LLC, CIV525544, Superior Court of California, San Mateo County.
To contact the reporter on this story: Victoria Slind-Flor in San Francisco at firstname.lastname@example.org.
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