Staff Writer

The Supreme Court, last Thursday, handed a substantial win to data-miners, brand name pharmaceutical companies, and First Amendment advocates. With a 6-3 decision in Sorrell v. IMS Health Inc, the Court held that a Vermont statute prohibiting data mining of doctor records for prescription information is an unconstitutional infringement of First Amendment rights. Specifically, the Court found that the Vermont law (both on its face and in its practical operation) imposed a burden based on the content of speech and the identity of the speaker. The state, moreover, failed to meet the standards of heightened scrutiny, as it was unable to show that the statute directly advanced a substantial governmental interest and that the statute was drawn to achieve that interest.

According to the Court, the provision of Vermont’s 2007 Prescription Confidentiality Law (Vt. Stat. Ann. tit. 18, §4631(d) (2007)) at issue in this case has three crucial components: (1) it prohibits pharmacies, health insurers, and similar entities from selling prescriber-identifying information, absent the prescriber’s consent; (2) it prohibits pharmacies, health insurers, and similar entities from allowing prescriber-identifying information to be used for marketing, unless the prescriber consents; and (3) it bars pharmaceutical manufacturers and pharmaceutical marketers from using prescriber-identifying information for marketing, again absent the prescriber’s consent.

This prescription information, including the type and amount of drugs issued by specific doctors, is often used in the “detailing” work of pharmaceutical companies, in which they carefully examine a doctor’s prescribing records and patient information to determine marketing strategy and to whom to pitch what drug.

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By Mallory Allen
Articles Editor

In Minnick, et. al. v.  Clearwire US, LLC, the Supreme Court of Washington will soon have the ability to determine the standards that should be applied to long-term subscription contracts imposed by Internet service and cellular phone service providers. Clearwire is currently in the process of being briefed before the Washington Supreme Court on a certified question from the 9^th Circuit. Specifically, the 9^th Circuit has asked the court to determine how to properly classify early termination fees (ETFs) in Clearwire’s contracts, in order to determine their legality. Numerous cases challenging such termination fees have been brought with varying degrees of success, but no appellate court of last resort has yet tackled the issue of how to properly classify these provisions. As the Washington Supreme Court will be one the first state court of last resort to hear this issue, it is likely that other state courts will look to the decision for guidance. As such, the Washington Supreme Court’s decision will likely have far-reaching implications across the country for similarly situated Internet and telephone providers.

Plaintiffs in this case, members of a yet-to-be-certified class of Clearwire customers, filed their complaint in King County Superior Court in April 2009. Each plaintiff had signed a one to two-year contract with Clearwire and had agreed to pay a fee if he or she decided to terminate the agreement at an earlier date. The complaint contains numerous allegations, but most importantly to the Supreme Court’s decision, plaintiffs allege that Clearwire imposes ETFs on dissatisfied customers who wish to terminate their Internet or cellular phone contracts earlier than the specified termination of the contract.

Clearwire, after removing the case to the United States District Court for the Western District of Washington, moved for dismissal of all plaintiffs’ claims. Clearwire asserted that the ETFs were enforceable as they were simply alternative performance provisions, by which the plaintiffs could have chosen to pay the ETF upon cancellation of their account or continue to pay for Clearwire service until the end of the contract term. Plaintiffs argued that the ETFs were instead, impermissible liquidated damages clauses, because they were used to penalize customers and induce them to continue to use Clearwire’s service; such liquidated damages are unlawful penalties.

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The University of Washington School of Law today published the Spring 2011 issue of the Washington Journal of Law, Technology & Arts, the nation’s first student-run electronic law journal focusing on technology, commerce, and artistic innovation.

The Washington Journal of Law, Technology & Arts publishes concise legal analysis aimed at practicing attorneys. The Journal publishes on a quarterly basis. This quarter’s edition includes four articles by recent graduates of the law school on topics including:

• Affirmative Representations as a Limit on Immunity Under § 230 of the Communications Decency Act
• The Rejection of  Civil Loss Causation Principles in Connection with Criminal Securities Fraud
• Deciphering “Authorization” Under the Computer Fraud and Abuse Act and How Employers Can Protect Their Data
• A Survey of the Digital Millennium Copyright Act’s Copyright Management Information Protections After All Headline News and McClatchey

This issue’s lead article, “Choose Your Words Wisely: Affirmative Representations as a Limit on § 230 Immunity,” is written by Articles Editor Jeffrey R. Doty. The article describes how recent cases suggest that a defendant’s own statements may constitute an independent source of liability under the Communications Decency Act beyond the scope of § 230, which generally shields Web site operators from liability arising out of third-party content.

Associate Editor in Chief Jim Jones penned the second article, “United States v. Berger: The Rejection of  Civil Loss Causation Principles in Connection with Criminal Securities Fraud.” Jones discusses the implications of the Ninth and Fifth Circuits’ diverging approaches to the use of civil loss causation principles for sentencing in criminal securities fraud prosecutions.

Managing Operations Editor Amber Leaders authored the third article, “Gimme a Brekka!: Deciphering “Authorization” Under the CFAA and How Employers Can Protect Their Data.” Leaders analyzes how different federal courts have interpreted the language of the Computer Fraud and Abuse Act when employers have sued former employees seeking damages for allegedly unauthorized access to computer systems.

Managing Submissions Editor Susuk Lim contributed the issue’s fourth article, “A Survey of the DMCA’s Copyright Management Information Protections: The DMCA’s CMI Landscape After All Headline News and McClatchey.” Lim describes the current state of Copyright management information (CMI), defined by the Digital Millennium Copyright Act (DMCA), specifically the split among federal courts about whether the Act’s provisions apply only to digital forms or also extend to non-digital CMI conveyance.

The Spring 2011 issue also debuts a new, twice-yearly feature: CASRIP Feature Articles, pieces written by  Intellectual Property Law & Policy Graduate Program (IP LL.M) students. These scholarly articles previously published in the Center for Advanced Study & Research on Intellectual Property (CASRIP) Newsletter. The CASRIP and the Journal are now both part of the University of Washington School of Law’s Law, Technology & Arts (LTA) Group. The first such CASRIP Feature Article, “Jacobsen Revisited: Conditions, Covenants and the Future of Open-Source Software Licenses,” authored by Yamini Menon, explores how the Federal Circuit’s reasoning in Jacobsen v. Katzer can be used to interpret the terms of open-source licenses, including the GPL v.2, GPL v.3, Apache License v.2, BSD License, and the Mozilla Public License.

The Journal accepts outside submissions from students, law professors, and practicing attorneys. For more information about the Washington Journal of Law, Technology & Arts please download the entire Spring 2011 issue of the Washington Journal of Law, Technology & Arts or visit http://www.law.washington.edu/wjlta for individual articles.

By Jeff Patterson, Ph.D.
Managing Operations Editor

On April 18, 2011 the Supreme Court heard oral arguments in the pending patent case, Microsoft Corp. v. i4i. Ltd, an appeal from the Federal Circuit decision, i4i Lt. v. Microsoft Corp., 598 F. 3d 831 (Fed. Cir. March 10, 2010).  As the defendant-appellant, Microsoft is attempting to challenge a subtle issue in current patent law.  If the Court agrees with Microsoft, patent practitioners may alter their prosecution strategies significantly.

The legal issue in Microsoft’s crosshairs is the evidentiary standard required for a party seeking to invalidate a patent.  A common infringement defensive maneuver is as follows: when party A is accused of infringing party B’s patent, party A will attempt to persuade a court that party B’s patent is invalid and thus unenforceable.  Party A will often argue that the United States Patent and Trademark Office (USPTO) either made a mistake or did not have all the available prior art when evaluating the novelty (35 U.S.C. § 102) and obviousness (35 U.S.C. § 103) of the invention.

Federal law (35 U.S.C. § 282) mandates that a court must presume that a patent, once granted by the USPTO, is valid.  Section 282 also states that a party wishing to invalidate a patent bears the burden of rebutting this presumption.  The legislative intent of this statute is that courts should give deference to the USPTO as an administrative body.  The statute is silent on the evidentiary standard required for a party to overcome the presumption.  However, the Federal Circuit has consistently required a showing of invalidity by “clear and convincing evidence.”  Microsoft is asking the Supreme Court to lower this standard, in at least some circumstances, to a “preponderance of the evidence,” often interpreted as a 51% standard.  The “clear and convincing evidence” standard is greater than “preponderance of the evidence” but lower than criminal law’s “beyond a reasonable doubt.”

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By Luke Rona
Articles Editor

The Washington Supreme Court recently held that nationwide class certification was properly denied by the trial court due to the potential burden of managing multiple state laws in a suit challenging AT&T’s billing practices.  Schnall v. AT&T Wireless Servs., Inc., 2011 Wash. LEXIS 316 (Wash. Apr. 14, 2011).

The case raises important issues regarding class action practice, conflicts of law, contracts, and consumer protection.  While appearing to shield commercial giants such as AT&T because their business fortuitously crosses state lines, the Court actually provides a pragmatic blueprint for class actions based on state law: statewide class actions in individuals’ home states.  See Schnall, 2011 Wash. LEXIS at *8.

Named plaintiff Martin Schnall, an AT&T customer, filed a nationwide class action alleging that AT&T misled its customers by charging a Universal Connectivity Charge (UCC), which covers AT&T’s mandatory contributions to the Universal Services Fund.  Schnall, 2011 Wash. LEXIS at *1-2.  This fund subsidizes phone and Internet services in low-income and rural areas.  Id. at *2.  While AT&T is permitted to recover this cost from its customers, Schnall maintains that AT&T violated the terms of its contract by failing to disclose the charge to Schnall at the time he signed his wireless agreement, as well as violating the Washington Consumer Protection Act (CPA).  Id. at *2, *11.

In its denial of nationwide class certification, the trial court determined that “individual questions predominated over common questions” for all of Schnall’s claims, thereby failing the predominance test of CR 23(b)(3), which mirrors Federal Rule of Civil Procedure 23(b)(3).   The trial court based its denial of class certification on the choice of law clauses in each customer’s contract, which dictated that the law of the customer’s area code governed each dispute.  Id. at *6.  Applying potentially 50 states’ laws in one proceeding would be unduly burdensome and unmanageable.  The Court of Appeals reversed, holding that a “common nucleus of operative facts” predominated among all class members.  Id. at *10.

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