Wealth of Ideas Blog

Everything's Bigger in Texas

Submitted by General Patent on Wed, 01/22/2014 - 22:48

It recently came to light that Texas-based MPHJ Technology Investments has sent an astounding 16,465 letters to small businesses, requesting that they pay a license fee of $1,000 per worker or face a patent infringement lawsuit. And we know this, in part, because MPHJ has now filed suit against the Federal Trade Commission.

The story begins with the thousands of letters MPHJ sent out regarding patents related to document-to-email scanning systems. MPHJ only targeted businesses with 20-100 employees, but even so, the campaign was hardly a success: Only 17 companies took licenses and paid up.

What MPHJ succeeded in doing was to anger Main Street and raise the ire of various government entities with its callous actions, which included targeting a nonprofit in Vermont that helps developmentally disabled adults, as well as an Alzheimer's patient in a nursing home in Nebraska. The attorneys general of New York and Vermont have taken legal action, and Sen. Claire McCaskill (D-MO) referred to the company as "bottom feeders" in a Senate hearing on patent demand letters.

The FTC had planned to sue MPHJ and its sole member, Texas attorney Jay Mac Rust, as well as Farney Daniels, the law firm MPHJ retained to help with its patent enforcement. The subject of the FTC lawsuit would have been related to deceptive trade practices. However, MPHJ filed its lawsuit as a preemptive strike, naming the four sitting FTC commissioners personally and alleging that the agency overstepped its authority.

Congress has a well-established history of taking on non-practicing entities that it considers to be "patent trolls," but the FTC does not. If it does sue MPHJ, it would be the first time the FTC ever took direct action against a non-practicing entity.

This could end up being one of the more important IP stories of 2014 - but even if it fizzles, at least it offers entertainment value the size of a Texas lawyer's belt buckle.

GoldieBlox and the Three Beasties

Submitted by General Patent on Sun, 12/08/2013 - 19:23

One of this holiday season's most anticipated gifts is an engineering toy set marketed to girls. The GoldieBlox building sets got a lot of attention from a promotional video that the company released on the Internet and that went viral.

And then the GoldieBlox folks got even more attention because they had used a Beastie Boys song in their video without getting permission from the two surviving members of the band.

The GoldieBlox ad uses the Beastie Boys song "Girls" - which in its original form is not exactly feminist in tone - and changes the lyrics to an ode to the power of science and engineering, sung by a group of young girls who are building a Rube Goldberg-type machine.

The problem is, the GoldieBlox team didn't know (or take the time to find out) that the late Beastie Boy Adam Yauch specified in his will that the group's songs were not to be used to sell products - and the two surviving Beastie Boys agree.

When the Beastie Boys contacted the GoldieBlox Girls about the use of the song, GoldieBlox immediately filed suit against the Beastie Boys seeking a declaratory judgment that their use of the song was a parody and thus fair use.

Responding to the surprise lawsuit, the Beastie Boys penned an open letter to the GoldieBlox team on November 25:

"Like many of the millions of people who have seen your toy commercial 'GoldieBlox, Rube Goldberg & the Beastie Boys,' we were very impressed by the creativity and the message behind your ad.

"We strongly support empowering young girls, breaking down gender stereotypes and igniting a passion for technology and engineering.

"As creative as it is, make no mistake, your video is an advertisement that is designed to sell a product, and long ago, we made a conscious decision not to permit our music and/or name to be used in product ads. When we tried to simply ask how and why our song Girls had been used in your ad without our permission, YOU sued US."

But this lawsuit has a happy ending for all parties. The original version of the video - after amassing 10 million views - has been removed and replaced with one that doesn't use the Beastie Boys song, and GoldieBlox has dropped the lawsuit.

Not only that, but the GoldieBlox folks have written their own open letter in reply to the Beasties:

"We don’t want to fight with you. We love you and we are actually huge fans.

"When we made our parody version of your song, ‘Girls’, we did it with the best of intentions. We wanted to transform it into a powerful anthem for girls.

"We want you to know that when we posted the video, we were completely unaware that the late, great Adam Yauch had requested in his will that the Beastie Boys songs never be used in advertising. Although we believe our parody video falls under fair use, we would like to respect his wishes and yours.

"Since actions speak louder than words, we have already removed the song from our video. In addition, we are ready to stop the lawsuit as long as this means we will no longer be under threat from your legal team.

"We don’t want to spend our time fighting legal battles. We want to inspire the next generation. We want to be good role models. And we want to be your friends."

So everyone's happy, and the original GoldieBlox video probably garnered a few million hits from the copyright controversy alone.

Top Secret!

Submitted by General Patent on Thu, 10/31/2013 - 22:48

An inventor who approached the U.S. Army with an idea for a "mysterious acoustic wave propagation machine" has been barred by the Army from even talking about the invention, much less filing a patent application on it. And that inventor, Bruce Horton, has now filed a lawsuit against the Army in a California federal court - accusing the Army of having his patent application "illegally frozen and not reviewed nor allowed by the United States Patent and Trademark Office."

The Department of Defense has the ability to declare a patent application a matter of national security and prevent the inventor from ever practicing the patented technology. But that's a rare occurrence, and usually happens with inventions related to weapons systems that the U.S. government wants to keep secret from other countries.

This case is different because the inventor approached the Army in 2004, before he'd actually filed a patent application on the invention. Horton, thinking that the "acoustic wave propagation machine" would have value to the military, contacted the Army - which flew him from his home in Redwood City, California to the Army's research lab in Maryland.

The Army officials he met with called the invention "brilliant and ahead of its time" and offered to help develop it as long as Horton would keep mum about it. Horton then met with U.S. Army Research Laboratory patent attorney Stephen Bloor, who agreed to prepare and prosecute the patent application. Horton's patent application is “Acoustic Propagation Method,” serial number 10/526609.

But things went south when Bloor declared the patent application "top secret," advised the USPTO to never review the application, and denied Horton's administrative claim last year for compensation for the loss of the invention. That claim was denied because the patent application was not allowed - but Horton alleges it was "the Government's illegal actions which caused the lack of allowance" in the first place.

As the case stands, it is currently illegal for Horton to discuss his invention with anyone. Quite a turn of events after such a promising start!

And according to Horton's lawsuit filing, Bloor "did not inform Horton of the numerous and serious conflicts of interest the Army Attorney had in purporting to represent Horton." Thus Horton signed an Engagement Agreement with Bloor without having those conflicts of interest explained (possibly not even mentioned).

Horton has demanded a jury trial and is seeking $5 million from the government under 35 U.S. Code 183, which makes it possible for inventors to request compensation from the government for damages caused by orders of secrecy on patents.

A copy of Horton's Complaint can be viewed here.

Should Have Stuck with Mason Jars

Submitted by General Patent on Mon, 10/28/2013 - 14:45

Trademark and trade dress disputes are nothing new in the world of alcoholic beverages. The latest alcohol-related trade dress dispute in the news is between the camps of Gentleman Jack and a legendary (but now deceased) Appalachian moonshiner named Popcorn Sutton.

Popcorn Sutton, who wrote a book called "Me and My Likker" and recorded how-to videos about moonshine production, committed suicide in 2009 as he faced a prison sentence for his moonshining activities. But he inspired another whiskey maker, who honored Sutton with a legally-produced beverage called "Popcorn Sutton's Tennessee White Whiskey." The Popcorn Sutton whiskey was originally sold in Mason jars the way Sutton himself packaged it (although the defendants claim that Sutton was known to say, "My whiskey is too good to be in a damn jar").

The legal troubles began when the distiller of the Sutton-inspired product fancied up the packaging - changing to a square bottle that looks curiously similar to a bottle of Jack Daniels. To complicate matters, the Jack Daniels distillery recently began producing its own "white lightning" - an unaged rye whiskey.

The dispute is one of trade dress instead of trademarks. "Trade dress" generally refers to the shape or other non-functional design elements of the container that a product comes in, and trade dress is considered intellectual property because packaging that is too similar can cause consumer confusion. Trade dress infringement is covered under federal and state laws against unfair competition.

The new shape of the Sutton whiskey bottles is extremely similar to the Jack Daniels Tennessee Whiskey bottle, and even has a black label with white text and similar stylistic elements. The Jack Daniels company's lawsuit says their packaging is part of "one of the oldest, longest-selling and most iconic consumer products" in the history of the U.S.

Some liquor store owners have said that the Popcorn Sutton product sold better when it was in simple Mason jars, possibly because it seemed more authentic. (Speaking of authentic, "Jack Daniels Tennessee Whiskey" is now produced by the California-based Jack Daniel's Properties Inc., a subsidiary of Brown-Forman Corp. That bit of trivia appears to be the whiskey equivalent of finding out your Texas hot sauce is made in New York City. However, the Jack Daniels distillery itself is still located in Lynchburg, Tennessee.)

The lawsuit was filed in the U.S. District Court in Nashville, Tennessee against J&M Concepts LLC, and Popcorn Sutton Distilling, LLC, which operate from Nashville. The plaintiffs have requested an injunction to stop the defendants' use of the square bottles and monetary damages.

Google Books: Fair Use or Copyright Infringement?

Submitted by General Patent on Tue, 09/24/2013 - 16:30

Judge Denny Chin of the United States District Court for the Southern District of New York has a decision to make: Is the Google Books Project transformative enough to be considered fair use, or is it just copyright infringement on a grand scale?

For those two or three of you who are unfamiliar with Google Books, it is a Google project that has seen the scanning of over 20 million books since 2004. But unless the book is in the public domain, it isn't available in its entirety - only as a snippet. Google Books offers links to sites where the book can be purchased, such as Amazon, Barnes & Noble, Books-A-Million and others - as well as a "Find in a Library" link.

The case of the Authors Guild against Google dates almost as far back as the Google Books project itself: The Guild filed suit in 2005 over Google's plans to create the world's largest digital library. Last year the case was awarded class action status, but Google appealed and the 2nd U.S. Circuit Court of Appeals ruled that the question of fair use must be decided before class action status can be granted.

So the case is back before Judge Chin, who must consider whether the snippets are comparable to thumbnails shown by a search engine (as Google argues) or whether they are displaying authors' copyrighted content without their consent or their input on how the content is displayed.

But Google seems to be very careful about how (and how much) the book content is displayed. Works whose copyright has expired can be read in their entirety, such as this 1919 edition of Louisa May Alcott's Under the Lilacs, scanned complete with beautiful color illustrations. But newer versions of the book that are still under copyright can only be previewed and purchased.

And for some books, only one or two lines of text is displayed. Click "Where is the rest of the book?" beneath the preview window, and you get this explanation:

"[O]ur partners [in the Google Books Partner Program] decide how much of the book is browsable — anywhere from a few sample pages to the whole book. Some partners offer the entire book in a digital edition through Google eBooks, in which case you can purchase the book...But if the book is under copyright, and the publisher or author is not part of the Partner Program, we only show basic information about the book, similar to a card catalog, and, in some cases, a few snippets — sentences of your search terms in context. The aim of Google Books is to help you discover books and assist you with buying them or finding a copy at a local library."

The judge himself seems to be leaning toward a finding of fair use. He described how his own law clerk had found Google Books very useful for conducting background legal research - a new purpose the works might not have had otherwise. "Aren't these transformative uses?" he mused.

It seems that more and more publishers and authors are beginning to see things Google's way: In June of this year, a group of major publishers settled with Google. Since the effect of copying is actually to make purchasing books easier in many cases, it's hard to argue lost sales. And Google argues that many authors support the project, which gives their works wider exposure. (This writer has discovered and purchased more than one work through the use of Google Books.)

The sticking point, apparently, is that Google receives advertising revenue from search results related to the project - so Google Books is at least somewhat commercial in nature, and not purely academic. But whether those ad revenues mean the use is not transformative is the issue that the judge will have to decide.

The Authors Guild wants $750 per copyrighted work scanned into Google Books, which could potentially cost Google more than $3 billion.

Computer Mouse Inventor Was Ahead of His Time - WAY Ahead

Submitted by General Patent on Wed, 07/03/2013 - 23:02

Sometimes it's possible to be a little too ahead of your time. Case in point: The patent on the first computer mouse expired in 1987 - shortly before the device became ubiquitous among computer users. Because it was patented before there was a need for it, the mouse's inventor inadvertently missed out on making a mint from his mouse. (The mouse only became commercially available in 1984, with the introduction of Apple's Macintosh PC.)

Doug Engelbart, who recently passed away at the age of 88, invented the computer mouse in the late 1960s. His mouse consisted of a wooden shell housing two metal wheels, and it was a big part of a 1968 event in San Francisco that has come to be called the "Mother of All Demos": Engelbert and his fellow researchers demonstrated several precursors of modern computing technologies, such as hypertext links, windows, desktop sharing, and of course the mouse.

The result of this groundbreaking demonstration was that most attendees thought Engelbert was an utter crackpot. (This wasn't a new problem for Engelbert: As an acting assistant professor at UC-Berkeley in the 1950s, he was cautioned by by a colleague that he'd never go far if he kept talking about his "wild ideas.")

But Engelbert persevered, and patented his computer mouse in 1970 as an "X-Y position indicator for a display system." That patent expired in 1987. Billions of computer mice have been sold since then.

Engelbert didn't completely miss out, however. In 1997, he won the $500,000 Lemelson-MIT Prize - the most lucrative award for American inventors. And in 2000, he received the National Medal of Technology from President Bill Clinton for "creating the foundations of personal computing."

What's more, the mouse wasn't the only breakthrough technology he helped introduce: As a researcher who was part of a research team partially funded by NASA, Engelbert was one of the scientists who helped develop ARPAnet - the precursor to the Internet.

Engelbert also helped develop the NLS, or "oN Line System," for computer networking - and it was reportedly inspired by the radar screens he used in the Navy during World War II.

"When you consider the crude type of computer equipment he had to work with, it was amazing," says Stuart Card, who worked at the Xerox PARC research center in the 1970s and regularly collaborated with Engelbert.

So while he may not have made a mint from a mouse, Doug Engelbert helped pioneer many of the computing technologies that make our work and home lives easier. His is a life and career worth celebrating, and an inspiration to every inventor who has ever been accused of having "wild ideas."

To Sue a Scoundrel

Submitted by General Patent on Sun, 06/09/2013 - 22:32

Reclusive author Harper Lee, who penned To Kill a Mockingbird - her only novel - back in 1960, is in the news for the first time in years. The reason: She is suing her literary agent for copyright infringement.

More specifically, the 87-year-old Lee is suing Samuel Pinkus, the son-in-law of her longtime agent Eugene Winick, for tricking her into signing over the copyright to her famous novel back in 2007.

Lee was in an assisted-living facility at the time of the alleged trickery, recovering from a stroke. "Pinkus knew that Harper Lee was an elderly woman with physical infirmities that made it difficult for her to read and see," states the complaint.

The copyright was reassigned to Lee last year after she took other legal action, but she seeks to take back full ownership of the copyright and block her wayward agent from any remaining commissions.

Watching this lawsuit play out will be interesting - not least to find out what Pinkus has to say for himself.

"The transfer of ownership of an author’s copyright to her agent is incompatible with her agent’s duty of loyalty; it is a gross example of self-dealing," scolds the complaint.

Also named in the lawsuit are Gerald Posner, a New York attorney and investigative journalist who incorporated one of Pinkus' companies; and Leigh Ann Winick, Pinkus' wife and the president of Keystone Literary LLC (which is also a defendant).

We can only hope that this tangled mess clears up quickly, and that the lawsuit will bring renewed interest in Lee's classic novel - not to mention more royalties for Lee and her rightful heirs.

A Murky Slate

Submitted by General Patent on Tue, 05/21/2013 - 13:33

Does a product have to exist in real life in order to infringe a trademark in real life? According to a U.S. District judge in Indiana, the answer is "Yes."

Warner Bros. Entertainment prevailed in a unique trademark infringement lawsuit in which a software company sued Warner Bros. over the use of a fictional software program featured in the blockbuster movie "The Dark Knight Rises."

Fortres Grand, a software company which has been selling its Clean Slate software since 2000, sued Warner Bros. over its use of the fictional "clean slate" software that Anne Hathaway's character Selina Kyle/Catwoman wants to use to erase her criminal record from every computer database in the world.

Fortres Grand claimed that its Clean Slate software, a security program that erases your computer's history (but not your criminal history - sorry!) suffered "reverse confusion" from Warner Bros.' use of a fictional product with the same name as the plaintiff's real product.

Warner Bros. argued that “Plaintiff is not in the motion picture business, and it would be absurd to think that customers buy tickets to 'The Dark Knight Rises' or purchase the DVD/Blu-ray because of a perceived association of the Film with Fortres Grand’s products.”

Judge Philip Simon sided with Warner Bros. for various reasons (and seems to have gotten a kick out of the case).

"I think the fatal flaw in Fortres Grand’s case has to do with correctly identifying the exact product that Warner Bros. has introduced to the market – a film, not a piece of software," writes Judge Simon in his decision.

Judge Simon goes on to write that even if Warner Bros.' use of "clean slate" had caused any sort of consumer confusion (an implausible claim, says the judge), the use of the term would still be protected by the First Amendment" The phrase "clean slate" is both artistically relevant to the work in which it appears, and is not "explicitly misleading as to the source or content of the work."

Copyright Infringement in the Eye of the Beholder

Submitted by General Patent on Sun, 04/28/2013 - 13:30

Two years ago, a U.S. District judge ruled that artist Richard Prince infringed photographer Patrick Cariou's copyrights on several photographs depicting Rastafarians.

Now the United States Court of Appeals for the Second Circuit has ruled that Richard Prince largely did not infringe Cariou’s copyrights with his “Canal Zone” series of paintings in at least 25 out of 30 works, because the use of the images was "transformative" enough to constitute fair use. Judge Barrington Parker's decision makes the difference clear:

"These twenty-five of Prince's artworks manifest an entirely different aesthetic from Cariou's photographs," writes Judge Parker. "Where Cariou’s serene and deliberately composed portraits and landscape photographs depict the natural beauty of Rastafarians and their surrounding environs, Prince’s crude and jarring works, on the other hand, are hectic and provocative."

Crude, jarring, hectic, provocative...and numerous. "Appropriation artist" Prince used at least 41 of Cariou's photographs to create his paintings. (Perhaps it's time for the artist to take a photography class so he can avoid this sort of copyright infringement lawsuit in the future?) As for whether the other five Prince images infringe, that matter will be remanded to a district court to decide.

New "Patent Troll Insurance" Costly, May Invite Lawsuits

Submitted by General Patent on Tue, 04/23/2013 - 14:46

You can buy insurance for many different types of business liabilities, so why not insurance to protect your company from lawsuits brought by so-called "patent trolls" or non-practicing entities (NPEs)? That kind of coverage is now available for members of a group that represents digital agencies and production companies. At first glance the insurance may look like a fine idea, but some attorneys say the coverage has its drawbacks.

First, the facts: The Society of Digital Agencies, or SoDA for short, has partnered with intellectual property insurance provider IPISC to offer intellectual property insurance that covers "IP infringement lawsuits brought against a member agency’s services, products, and/or processes, as they relate to website, mobile site, and mobile app development." That narrow range of coverage reflects the fact that many NPEs assert patents related to common Internet features and functions.

But Law360 (subscription required) points out that the patent troll policy has been "slow to catch on" for two reasons: The cost of patent litigation may be quick to exceed coverage limits, and attorneys say that "buying the insurance may actually invite patent suits." Uh-oh!

So it looks like there's still no quick fix or blanket protection for protecting your business or organization from patent lawsuits. However, it will be interesting to see if this patent lawsuit insurance takes off, and if other industry groups begin offering similar coverage.