IP and Computer Law Update March 2009

March 2009

From the editors of Wolters Kluwer Law & Business, this update describes important developments from CCH and Aspen Publishers intellectual property and computer law publications.

If you have any comments or suggestions concerning the information provided or the format used, we'd like to hear from you. Please send your comments to john.arden@wolterskluwer.com.

COPYRIGHTS

Charts/Templates Were Not Copyrightable Compilations
Emergency room charts/templates used by doctors to document patients' medical history and symptoms were not copyrightable compilations, the federal district court in Miami held. Therefore, a company's development of a similar template did not infringe the copyright in the original template. The original template was registered as a literary work and described as a compilation of terms.

Pursuant to the Copyright Act, a compilation is a work formed by the collection and assembling of preexisting materials or data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. Works that compile words, but do not compile facts, are not copyrightable. The templates constituted a compilation of words rather than a compilation of data/facts. Blank forms, which are designed for recording information and do not in themselves convey information, are not subject to copyright, the court explained (Utopia Provider Systems, Inc. v. Pro-Med Clinical Systems, L.L.C., SDFla, CCH Copyright Law Decisions ¶29,696).

GateHouse and New York Times Settle Suit Over Copying Headlines
GateHouse Media's copyright infringement lawsuit against the New York Times Co. in the federal district court in Boston was dismissed because the parties agreed to settle the case. GateHouse claimed that the Boston Globe and its website, which are owned by the New York Times, violated its copyright by using GateHouse's newspaper headlines and lead sentences without permission. GateHouse stated that the case was about the ability to protect valuable content from inclusion in websites or anywhere else it does not belong and from being used by competitors without permission. The agreement is to include provisions for GateHouse's implementation of commercially reasonable technological solutions to prevent copying of any original content from websites and RSS fees and the New York Times' removal of GateHouse RSS feeds from the aggregation tool being used to copy GateHouse's headlines.

Creation, Delivery of Song Upon Request Created Implied License
A record company's inclusion of a freelance music producer's song on a rap music performer's album did not constitute copyright infringement because the record company had an implied nonexclusive license to use the song, the U.S. Court of Appeals in Atlanta ruled. The record company owned the exclusive rights to songs authored and co-authored by the rapper. The song was created and delivered at the request of the rapper for use as an interlude between two parts of his album. The music producer did not dispute that he created the song for the album at the rapper's request, but he argued that he never granted anyone a license to use his work.

The Eleventh Circuit has held that an implied nonexclusive license is created when one party creates a work at another party's request and hands it over, intending that the party copy and distribute it. The producer’s argument that he revoked the implied license days after the album was released was rejected because it was not presented to the district court. Thus, there was no genuine issue of material fact that the producer granted an implied license to the record company (Wilchombe v. TeeVee Toons, Inc., 11thCir, CCH Copyright Law Decisions ¶29,695).

TRADEMARKS

Promoter Barred from Staging “Moscow Cats Theatre” Shows
Renowned Russian animal trainer and clown Yuri Kuklachev and his son Dmitri were granted a preliminary injunction by the federal district court in Brooklyn, barring a New York-based theatrical promotion and management company and its principals (Gelfman) from using the mark "Moscow Cats Theatre." Kuklachev was the founder and manager of a theatrical troupe under that name that had toured the United States in 2001, 2002, 2005, and 2006, using Gelfman's promotional services.

The unregistered mark "Moscow Cats Theatre" had the requisite secondary meaning for trademark protection, the court said. The troupe's performances had been highly successful, and media coverage indicated that Kuklachev and his troupe were associated by the public with the mark. Gelfman had recognized the success of the mark and decided to use it for its own shows, the court noted, which further indicated that the mark was distinctive. There were numerous instances of actual confusion among audience members and media reviewers, who thought that Kuklachev's troupe was performing in Gelfman's shows. Gelfman's shows were similar to Kuklachev’s performances, in terms of stage setup, show themes, devices, and tricks, supporting a determination that Kuklachev was likely to succeed on the merits of his infringement claims (Kuklachev v. Gelfman, EDNY, CCH Trademark Law Guide ¶61,364).

Tribal Court Could Not Hear Dispute over Cigarette Packaging
A Native American tribal court lacked jurisdiction over an action brought by tribal members, seeking a declaration that packaging for the tribe’s "King Mountain" brand cigarettes did not infringe or dilute tobacco company Philip Morris's "Marlboro" trademarks and trade dress, the U.S. Court of Appeals in San Francisco has held. The declaratory judgment action was filed after Philip Morris filed a trademark infringement and dilution action against the tribe members in federal district court.

There was no contract or consensual relationship between Philip Morris and the tribal members that would give the tribal court a colorable claim to jurisdiction, the court said. The parties were, in fact, market competitors. Philip Morris did not otherwise consent to tribal jurisdiction. There was no nexus between Philip Morris's commercial relationship with various stores operated by tribal members and the events that gave rise to Philip Morris's trademark infringement suit. The infringement lawsuit arose from the alleged nationwide sales—including sales on the Internet and on other reservations, of King Mountain cigarettes—not from the marketing contracts between Philip Morris and a handful of stores on the reservation. The tribe itself was not a party to this case. Pursuit of federal and state trademark claims did not pose a direct threat to tribal sovereignty, the court concluded (Philip Morris USA, Inc. v. King Mountain Tobacco Co., 9thCir, CCH Trademark Law Guide, ¶61,361).

COMPUTER AND INTERNET LAW

Ads Using Photo from Photo-Sharing Site Not Grounds for Texas Suit
An Australian mobile phone service provider's local advertising campaign featuring a photograph of a Texas girl obtained from Yahoo!'s Flickr photo-sharing website did not provide sufficient contacts for the company to be subject to personal jurisdiction in Texas, the federal district court in Dallas has determined. In its Australian bus shelter shell ads, Virgin Mobile Pty Ltd. (Virgin) used a photo of Alison Chang taken by her church counselor, Justin Wong. Wong had posted the photo to Flickr under a Creative Commons Attribution 2.0 license agreement, which provides for the most unrestricted use available to any worldwide user, including commercial use, free of charge.

The plaintiffs asserted, without proof, that Virgin was subject to persona jurisdiction in Texas because it accessed Yahoo!’s Texas server to download the photograph. Even if the Texas server was the one accessed, the fortuitous location of a server would not be a sufficient contact to establish personal jurisdiction, according to the court. In addition, Virgin's breach of an alleged license agreement with Wong did not establish jurisdiction. Merely contracting with a resident of the forum state does not establish minimum contacts. The Flickr Creative Commons license did not require Virgin to perform any of its obligations in Texas; on the contrary, the license permitted Chang's photograph to be used anywhere in the world. Finally, the alleged “intrastate effects” of Virgin's ad campaign failed to satisfy minimum contacts. A nonresident tortfeasor may be subject to personal jurisdiction if he commits an intentional act that is "expressly aimed" at a forum state and he knows that the brunt of the injury likely would be felt by a resident in the forum. While Chang may have felt a tortious effect in Texas, especially after the ad incorporating her picture garnered wide-spread public interest, Virgin's ad campaign clearly targeted Australia, not Texas (Chang v. Virgin Mobile USA, LLC, NDTex, CCH Computer Cases ¶49,671).

Game Cheat Software Infringed Copyrights, Violated DMCA
MDY Industries, the seller of a computer program ("Glider") that allowed subscribers to Blizzard Entertainment's popular interactive World of Warcraft game (WoW) to "cheat" by using Glider to play the game in their absence, violated the Digital Millennium Copyright Act (DMCA), the federal district court in Phoenix has held. By evading the WoW game client bot detection software (known as "Warden"), Glider violated the DMCA’s provisions prohibiting circumvention of technological measures that "control access" to a copyrighted work and that "protect" an owner's copyright. Warden qualified as an “access control device” because it barred access to the interface or "non-literal" copyright protected elements of the program, such as the multi-media presentation of the WoW universe and character interactions. Warden also constituted a “copyright protection device” to the extent it interrupted and prevented Glider from copying the dynamic non-literal sights and sounds of WoW as it was being played, according to the court.

The court previously held that MDY was vicariously and contributorily liable for copyright infringement committed by Glider users and that MDY tortiously interfered with Blizzard's contracts. Michael Donnelly, MDY's president, was personally liable for MDY's infringement and tortious interference, the court ruled. Donnelly clearly supervised MDY's infringing and circumventing activities, and he profited handsomely from their success. Donnelly also knew that his actions violated the contractual relationship between Blizzard and its customers (MDY Industries, LLC v. Blizzard Entertainment, Inc., DAriz, CCH Computer Cases ¶49,674).

Copyright Claims Could Proceed Against Open Source User
A university professor who made his copyrighted source code available to the public via an open source copyright license could proceed with copyright infringement and Digital Millennium Copyright Act claims against a commercial software developer, the federal district court in San Francisco has ruled. However, the professor's breach of contract claim was preempted by the Copyright Act and his patent claims were moot. The professor made model train chip decoder software available free of charge under an open source Artistic License, which permitted members of the public to copy, distribute, and create derivative works from the software, provided that they gave credit to the open source project and that they complied with certain other restrictions if they modified the software. The commercial software developer allegedly copied, modified, and used the decoder software in a competing product without making the required attribution or complying with other restrictions in the Artistic License.

Because the U.S. Court of Appeals for the Federal Circuit previously ruled (CCH Computer Cases ¶49,386) that the terms of the Artistic License were enforceable copyright conditions rather than contractual covenants, the professor had a valid copyright infringement claim, which preempted his breach of contract claim. Section 301 of the Copyright Act preempts state law claims that are within the subject matter of copyright and protect rights equivalent to those protected by the Act. The professor’s breach of contract claim sought to protect rights that were equivalent to his exclusive right as copyright owner to reproduce, distribute, and make derivative copies of the software, the court found. The professor also could proceed with claims that the developer violated the DMCA by circumventing a device that protects "copyright management information." The complaint sufficiently alleged the existence of a technological process in the decoder definition files that protected copyright information. The professor's patent claims—seeking a declaration of invalidity, unenforceability, and noninfringement of the software developer’s patent—were dismissed as moot because, after the suit was filed, the software developer voluntarily disclaimed all claims in the patent. Moreover, attorney's fees incurred by the professor did not constitute a cognizable injury that would provide a basis for continued jurisdiction over the patent claim, according to the court (Jacobsen v. Katzer, NDCal, CCH Computer Cases ¶49,666).

Wolters Kluwer Law & Business Publications

Scott on Outsourcing Law and Practice by Michael D. Scott
The 2009 Supplement recently went live on the Intellectual Property/Computer and Internet Law tab of the CCH Internet Research Network. Scott on Outsourcing Law and Practice is the first comprehensive and practical guide to all of the legal issues involved in the outsourcing process, including compliance with outsourcing rules and regulations, protection of IP assets, safeguarding information privacy and confidentiality, compliance with labor and employment laws, and resolving disputes. Scott on Outsourcing law and Practice features: (1) Federal and state laws and international treaties that impact outsourcing; (3) Checklists and practice pointers; (3) Sample agreements and relevant forms; and (4) Clause-by-clause analysis of domestic and international outsourcing contracts.

The 2009 Supplement brings you up to date on the latest developments, including: (1) compensation and ownership of intellectual property in transformational outsourcing, including gainsharing arrangements; (2) privacy and security issues in outsourcing, including strategic sale or transfer of assets to the vendor, policies to prevent theft or unauthorized copying of data, and state laws affecting the ability to transfer data; (3) transfer of personally identifiable information to a vendor and for use by third parties; (4) tax issues, including transfer pricing, asset transfer taxes, and location taxes; (5) Sarbanes-Oxley compliance and new Auditing Standard No. 5; (6) employment issues, including workers' compensation and other dual employment/joint employer issues; (7) significance of ABA opinion on ethical issues in legal outsourcing; (8) additional outsourcing models for offshoring, including virtual and synthetic captives; and (9) litigation issues, including protection of trade secrets during discovery, preservation of records in anticipation of litigation, and enforcement of U.S. arbitration awards in foreign courts. For more information on Scott on Outsourcing, visit the CCH Online Store.

Wolters Kluwer Law & Business Launches Patent Law Library
New Patent Law Library

Wolters Kluwer Law & Business has launched a new electronic Patent Law Library covering all areas of domestic and international patent law practice—including prosecution, litigation, and licensing.

The Patent Law Library contains all the best Aspen Publishers' expert-authored, analytical treatises—and links to primary source material, such as cases, laws, and statutes. The library features current awareness from weekly e-mail alerts of patent cases, as well as articles from Aspen IP periodicals. Also included are the invaluable Kluwer Law International resources.

The Patent Law Library features:

(1) Current developments & current awareness, with weekly email alerts from the Federal Circuit Patent Case Review by Alston & Byrd, as well as selected articles from top intellectual property journals from Aspen Publishers, such as The Licensing Journal, Intellectual Property and Technology Law Journal, IP Litigator, and The Computer and Internet Lawyer;

(2) Primary source material from the Manual of Patent Examining Procedure and the Patent Act;

(3) Patent prosecution, litigation, licensing/transactions and forms modules with 13 popular treatise titles from Aspen Publishers, including Biotechnology and Pharmaceutical Patents: Law and Practice by Marc S. Gross, S. Peter Ludwig and Robert C. Sullivan Jr.; Business Method Patents by Gregory A. Stobbs, Esq.; Patent Practice Forms by Peter S. Canelias; Patent Claim Construction by Robert C. Kahrl; Drafting Technology Patent License Agreements by Michael J. Lennon, and Patent Disputes: Litigation Forms and Analysis by Gregory J. Grimes and Charles W. Grimes; and

(4) Kluwer Law International resources, including the Manual of Industrial Property and Kluwer EU Patent Cases database.