Credit: Federal Circuit Website

In WiAV Solutions LLC v. Motorola, Inc. (Fed. Cir. 2010), the United States Court of Appeals for the Federal Circuit (CAFC) recently defined the term “exclusive” in patent licensing agreements to mean a party who holds any exclusionary rights to the patent, rather than sole exclusionary rights.  The precise definition of exclusivity is critical because only exclusive licensees have standing to sue for patent infringement.

The issue arose when WiAV Solutions, LLC alleged it was the exclusive licensee of seven patents owned by Mindspeed Technologies, Inc. and sued multiple companies including Motorola, Inc., Nokia Corporation, Palm, Inc., and Sony Ericsson Mobile Communications, Inc. for infringement of the Mindspeed patents.

The district court held WiAV was not an “exclusive licensee” under Textile Productions, Inc. v. Mead Corp.— and therefore lacked constitutional standing enforce the patents–because the original owner of the Mindspeed patents had assigned the patents and a subsidiary of the assignee had received a limited, non-exclusive license. Because licensees other than WiAV retained a limited licensing right, WiAV could not be an exclusive licensee.

CAFC reversed the district court decision and held “a licensee is an exclusive licensee of a patent if it holds any of the exclusionary rights that accompany a patent.”  WiAV did not lose its constitutional standing to sue for infringement just because its exclusive license was subject to certain rights and limitations in existence at the time of the license.

CAFC reasoned that a party may hold one or more exclusionary rights, such as an exclusive licensee, and as long as that party suffers a legally cognizable injury when an unauthorized party uses its rights, there is standing to sue.  Thus the test of legal standing for patent infringement suits is whether a party can prove it has any exclusive right to a  patent, and suffers legal injury because others violate that right.

CAFC further reasoned that a superior right of exclusion is also a key factor for determine exclusivity: “[d]epending on the scope of its exclusionary rights, an exclusive licensee may have standing to sue some parties and not others…[i]f an exclusive licensee has the right to exclude others from practicing a patent, and a party accused of infringement does not possess, and is incapable of obtaining, a license of those rights from any other party, the exclusive licensee’s exclusionary right is violated.”

Therefore, CAFC held that “an exclusive licensee does not lack constitutional standing to assert its rights under the licensed patent merely because its license is subject not only to rights in existence at the time of the license but also to future licenses that may be granted only to parties other than the accused.” CAFC concluded that none of the preexisting licenses gave the Defendants the right to practice the patents in WiAV’s field of exclusivity, and therefore reversed the district court decision.

Nevertheless, CAFC retained a limitation on this broad rule of standing by stating that “[b]ecause an exclusive licensee derives its standing from the exclusionary rights it holds, it follows that its standing will ordinarily be coterminous with those rights.” CAFC gave two examples of situations in which an exclusive licensee would still lack standing. First, if the party being sued held a preexisting license under the patent to engage in the allegedly infringing activity, there would be no standing to sue that party. Second, an exclusive licensee would lack standing to sue a party who could obtain such a license from another party with the right to grant it. The key point is that an exclusive licensee must have an exclusionary right with respect to the alleged infringer in order to have standing to sue.

The United States Immigration and Customs Enforcement (ICE) recently seized a number of website domains that were purported to contain pirated or counterfeited products.  The seized domains, like http://www.torrent-finder.com, now display the following message:

“This domain name has been seized by ICE — Homeland Security Investigations, pursuant to a seizure warrant issued by a United States District Court under the authority of 18 U.S.C §§ 981 and 2323.”

Chapter 18 U.S.C §981 and §2323 both govern civil forfeiture.  Other sites that were targeted include onsmash.com, rapgodfathers.com, dajaz1.com, burberryoutletshop.com, cheapscarfshop.com, dvdcollectionsale.com, handbagcom.com, mydreamwatches.com, sunglasses-mall.com, and usaoutlets.net.

The message from ICE that is now displayed on the seized domain names warns about the penalties for willful copyright infringement and knowingly trafficking counterfeit goods, and it cites the pertinent United States Code sections.  The laws governing punishment for copyright infringement include 17 U.S.C. § 506, criminal offenses, and 18 U.S.C § 2319, criminal infringement of copyright.  The law governing punishment for trafficking in counterfeits is 18 U.S.C § 2320, trafficking in counterfeit goods or services.

ICE performed a similar domain name seizure in June as part of “Operation in Our Sites,” an initiative against Internet counterfeiting and piracy.  A spokeswoman for ICE would not comment [Insert link] on whether the recent domain seizures were also part of the Operation.

The recent domain seizures coincide with the Combating Online Infringements and Counterfeits Act making its way through Congress. The bill, which was approved by the Senate, would allow the government to shut down sites that are “dedicated to infringing activities.”  All of these developments reflect the U.S. government’s current focus on keeping America’s biggest export–intellectual property–safe and profitable, especially in the current economic climate.

For more information on the recent domain seizures, see the following stories:

• http://www.abs-cbnnews.com/global-filipino/world/11/28/10/us-shuts-down-counterfeit-goods-music-sites
• http://www.france24.com/en/20101127-us-shuts-down-counterfeit-goods-music-sites
• http://www.ubergizmo.com/15/archives/2010/11/us_dhs_shuts_down_websites_selling_counterfeits.html

Washington D.C. — On Friday, November 19, 2010, a divided U.S. Court of Appeals for the District of Columbia issued an order rejecting the U.S. Justice Department’s request for an en banc review of an August ruling requiring law enforcement authorities to get a warrant before using GPS devices to track a suspect.

On August 6, 2010, a three-judge panel of the D.C. Circuit Court unanimously overturned Antoine Jones’ life sentence on the ground that law enforcement authorities had violated Jones’ Fourth Amendment right to privacy by attaching a GPS device to Jones’ car without a warrant and using that device to track him for four weeks. The court’s August ruling can be found here.

Antoine Jones, a D.C. area nightclub owner, was arrested for drug possession after police attached a GPS tracking device to his vehicle. Local authorities had monitored Antoine Jones for a month without a warrant before they nabbed him. Judge Ginsburg in his decision wrote that “[a] reasonable person does not expect anyone to monitor and retain a record of every time he drives his car, including his origin, route, destination, and each place he stops and how long he stays there; rather, he expects each of those movements to remain disconnected and anonymous.”       

The U.S. Justice Department asked the full D.C. Circuit to reconsider the case, but the request was denied by a 5-4 majority. The court’s order denying the request can be found here.

Chief Circuit Judge David Bryan Sentelle, writing for the court’s four dissenters, complained that the panel’s ruling is inconsistent with other appellate court decisions as well as “controlling Supreme Court precedent.” Chief Judge Sentelle referred to United States v. Knotts, 460 U.S.  276 (1993) (found here) as the controlling Supreme Court precedent inconsistent with the panel’s decision.

In Knotts, the Supreme Court reviewed a case in which law enforcement officers placed a radio transmitter inside a chloroform container that was subsequently sold to Armstrong, who law enforcement authorities believed was purchasing chloroform to manufacture illegal drugs. Armstrong placed the chloroform in his car and authorities used both visual surveillance and the monitoring of the radio transmitter to track Armstrong to his secluded cabin in Wisconsin. After three days of intermittent visual surveillance of the cabin, the authorities secured a search warrant, discovering the chloroform container and other chemicals and formulas used for creating methamphetamines inside the cabin. The Supreme Court held that the radio transmitter’s signals did not invade any legitimate expectation of privacy on behalf of Armstrong, and therefore there was neither a search nor seizure within the contemplation of the Fourth Amendment. 

Chief Judge Sentelle stated that “[E]verything the Supreme Court stated in Knotts is equally applicable to the facts of the present controversy,” noting that the tracking of movements with a radio transmitter is immaterially different from tracking someone with a GPS device. He further notes that there cannot be an invasion of privacy without a reasonable expectation of privacy, and since Jones was driving on public roads, there was no reasonable expectation of privacy, and therefore no invasion of privacy. 

Chief Judge Sentelle also refers to three circuit court decisions in which the courts did not recognize the tracking of suspects through GPS surveillance as a search. See United States v. Garcia, 474 F.3d 994 (7th Cir.), cert denied, 128 S.Ct. 291 (2007), found here; United States v. Marquez, 605 F.3d 604 (8th Cir. 2010), found here; United States v. Pineda-Moreno, 591 F.3d 1212 (9th Cir. 2010), found here.

The National Labor Relations Board (NLRB) recently accused an ambulance service company, American Medical Response of Connecticut (AMR), of illegally firing one of its employees on the basis of her Facebook activity. The labor law community considers this case to be ground-breaking because of its potential for setting precedent in the critical battle over the survival of unionization in the American workplace.

AMR terminated the employee, Dawnmarie Souza, for breaking a company rule against “depicting the company in any way” on an Internet site featuring the employee’s picture. The alleged “depiction” in this case was several disparaging, mocking, and profane remarks Souza made on her Facebook page about her supervisor who would not allow a union representative to help Souza respond to a customer who complained about her. The NLRB alleged AMR violated NLRA laws prohibiting employers from punishing employees for discussing working conditions among themselves. In particular, NLRB argues the AMR company policy prohibiting employees from making disparaging or discriminatory comments when discussing the company or the employee’s superiors and co-workers violates Section 8(a)(1) of the NLRA.

Online organizing and activities are key issues in today’s labor movement. The presence of organized labor in the U.S. has declined over the past five decades from about 35 percent of the work force during the 1950s to 12.5 percent in 2005, including only 7.8 percent in the private sector. Labor unions, realizing that handing out leaflets and calling on employees will not succeed in organizing the modern generation of employees, have been utilizing emerging electronic technologies to augment these traditional tactics. For example, labor organizers are now using blogs and social networking sites to publicize their causes and inform, educate, and enlist non-union employees about the importance of unionization. The increasing influence of these sites, as well as efforts of employers to counteract this influence, raise issues related to employees’ rights to collectively bargain under the National Labor Relations Act (NLRA).

If the facts presented by AMR show reasonable grounds for dismissal, the judge may dismiss the case at summary judgment and thus never resolve whether the employee should have been allowed to post her work-related comments to her Facebook page. On the other hand, if AMR cannot prove that its decision to fire Souza was justified, the court may rule against the employer for an unfair labor practice (ULP) under Section 8(a)(1) of the NLRA for constraining concerted action among employees to discuss work conditions.

Although Section 8(a)(1) of the NLRA protects the  employee’s Section 7 right to “engage in . . . concerted activities for the purpose of collective bargaining”, this right is not without bounds. The NLRB, in its Atlantic Steel board decision, established a four-factor balancing test to determine whether employee speech is protected under the NLRA: “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.” In Media General Operations, Inc. v. NLRB, the NLRB held the defendant in violation of NLRA Section 8(a)(1) for having fired an employee because of an outburst he made to his supervisor. The Fourth Circuit overruled based on the third NLRB balancing factor, holding that the employee’s outburst was sufficiently “profane and derogatory” that he had “forfeited the protections of the NLRA.”

An administrative law judge is scheduled to begin hearing the case on Jan. 25, 2011. Regardless of the outcome of this case, the NLRB and the courts will continue their efforts to balance the right of employees to collectively bargain with the right of the employer to further its economic interests. Therefore, the field of labor law will likely have several opportunities in the near future to develop the legal boundaries between Internet communication that comprises protected labor organization activity and that which is libelous, disloyal, or otherwise damaging behavior not protected under the NLRA.

Forty-seven states have enacted forms of the Uniform Electronic Transactions Act (UETA). Section 7 of the uniform act provides that “If a law requires a signature, an electronic signature satisfies the law.” The law was primarily targeted at erasing barriers to e-commerce. However, the law may reach into unexpected realms, as demonstrated by a decision of the Utah Supreme Court handed down this summer.

The case is Anderson v. Bell, 2010 UT 47, 234 P.3d 1147. The case originated when Farley Anderson sought to stand as a non-party affiliated candidate for governor of Utah. In order to be on the ballot for governor in Utah, a candidate is required to submit a petition signed by at least 1,000 registered voters residing in the state.  Anderson submitted a mixture of handwritten signatures and electronic signatures collected on a web site in favor of his candidacy. The Utah Attorney General struck the electronic signatures and rejected the petition because the number of signers was no longer sufficient. Anderson petitioned for an extraordinary writ from the Utah Supreme Court.

In addition to looking at Section 7 of the Utah UETA, the court considered Utah’s general definitions statute, which explicitly includes electronic signatures within the definition of a “signature” to be used in the entire Utah code. In light of this as well as UETA’s unambiguous language that any law requiring a signature is satisfied by an electronic signature, the court held that a signature for the purposes of a petition to run for office includes an electronic signature. The court pointed out that the crucial question for a signature is intent to authenticate, which is demonstrated just as well by an electronic as a paper signature.

The Utah court rejected an argument of the Lt. Governor based on a Utah law granting agencies the authority to make rules about when  that agency will and will not be accept electronic submissions on the ground that the Lt. Governor had not actually promulgated any such rules. The Lt. Governor also pointed to UETA Section 5(b), which states that the act applies only to transactions between parties each of which has agreed to conduct transactions by electronic means. The court rejected this argument on the basis that the parties to the transaction are the persons signing the petition, not the Lt. Governor, whose only interest is the duty to verify the signatures.

Although the Anderson case turned on certain details of statutory interpretation, including those based on Utah administrative law that apply differently in different jurisdictions, the case raises broader policy questions. That electronic signatures should be allowed to create contractual relations in order to facilitate online commerce is reasonably well accepted.  The question Anderson hints at is whether this acceptance merely represents acquiescence to practical realities, or a more fundamental belief that a mouse click is just as appropriate a way for a person to indicate agreement as a physical signature.

Less philosophically, Anderson and cases like it may force states to re-examine their petition system. This raises interesting policy questions, not so much in the Anderson setting of candidacy but in the context of voter initiatives. (The Anderson court refused to reach the question of whether electronic signatures are valid for voter initiative purposes.) Wide acceptance of electronic petitioning could greatly modify the landscape for voter initiatives. Presently, placing a voter initiative on the ballot in states that allow such initiatives demands either a very large amount of grass roots support in the form of volunteer petition gatherers, or, perhaps more likely, large amounts of funds for paid petition gatherers. The possibility of online petitions in this setting could greatly shift the balance of power, decreasing the emphasis on petition circulators and placing more emphasis on the ability of groups promoting a voter initiative to draw attention to a web site.

The question of whether to allow online signatures for voter initiatives online as a policy matter turns somewhat on the question of why signatures are required at all. The most straightforward answer is to determine whether there are enough citizens willing to endorse the initiative to suggest that it has some reasonable chance of passing. If this is the sole reason for collecting signatures, then it is difficult to come up with a compelling reason not to accept online petition signatures. As the Anderson court noted, a digital signature demonstrates intent to endorse just as a physical signature does. Although such an adjustment may cause short-term administrative difficulties as secretaries of state adjust to new procedures, it seems most likely that online signatures, coming in a machine-readable form, would be much easier to evaluate in the long run.

If, however, the signature gathering component of the voter initiative process is intended as a barrier to entry, ensuring that initiative proponents are serious enough to take on the logistical tasks and expense of collecting signatures, petition signatures may not fulfill this task. The proliferation of online “petitions” certainly does suggest that electronic signature collection might invite arguably frivolous voter initiatives. On the other hand, the current system favors initiative proponents with substantial funds to hire petition circulators. Allowing online petitions would not eliminate such parties, but might balance the playing field in favor of parties with less economic power.

Regardless of how these questions are ultimately resolved, the Anderson case signals that the electronic signature may refuse to be contained within the narrow bounds of e-commerce.