01/12/15 Update: The Court issued an invitation calling for the views of the U.S. Solicitor General, an act that shows interest in the case.  It suggests the Court is more likely to grant the petition, although it is now very unlikely to be heard this Term.


 

Today the Supreme Court conferences over whether to review the Federal Circuit’s decision in Google v. Oracle America. This is a welcome development because it provides the Supreme Court with the opportunity to overturn the Federal Circuit’s flawed decision relating to the protectability of the Java Application Program Interfaces (APIs) under copyright.

We previously discussed the Federal Circuit’s May 2014 decision here, here, here, and here. Google incorporated elements of the Java API in the Android API. Oracle acquired the rights in Java when it purchased Sun Microsystems, the company that developed Java. After the acquisition, Oracle sued Google for patent and copyright infringement. The district court dismissed the patent claims, and the case presently centers on the copyright claims. MORE »

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Buying airfare online is a complicated and frequently fraught experience.  You can buy your ticket directly from the airline of your choice, from online travel booking sites, or even via travel metasearch engines—and your purchase price might be different depending on the time of day or day of the week you choose to shop.  All of that is to say that airline pricing structures are very complex, and a cottage industry has grown out of consumers’ demonstrated demand for better tools to navigate air travel booking.

At first glance, Skiplagged would seem to be just that—another tool for consumers to parse the secretive pricing strategies of airlines.  The website takes advantage of an obscure quirk of airline pricing: trips that include a stopover in a high-demand destination prior to a final leg to a less-frequented one are regularly cheaper than direct flights to the same high-demand destination.  So a prospective traveler (without checked baggage) looking to fly to San Francisco from DC might book a trip to Lake Tahoe with a stopover in SFO and then skip the final leg of the trip to take advantage of the lower total fare for the Tahoe itinerary.  Skiplagged shows consumers these “hidden city” deals and directs them to the travel booking sites from which they can be purchased. MORE »

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(Originally published at and cross-posted from CircleID)

On December 17th a US proposal for online commerce in a major trade negotiation, the Trade in Services Agreement (“TISA”)[1] leaked. A flurry of press releases and opinion pieces claim that TISA is a threat to the Internet. The headlines are lurid: “TISA leak: EU Data Protection and Net Neutrality Threatened” and “Leaked TISA text exposes US threat to privacy, civil rights”. Yet the authors of these screeds are far removed from the negotiations and not actively following them; their comments generally assume the 8-month-old text from one country is a reliable base to use to make assumptions about the end result of unfinished negotiations involving more than 40 countries. Because I’ve spent years in Geneva regularly meeting with and advising negotiators on the networked economy[2] I have a very different perspective. Frankly, I believe most commenters have got the main issues wrong and largely missed the significance of the worst feature of the proposal – the extremely broad national security exception.

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2014

New Year’s is always a time for remembrance and nostalgia, with lots of “top” lists. This is another, focused on the most important, entertaining and reverberating technology law cases of 2014.

1.  Apple’s iPod Class Action Win.  Near the end of the year, a decade-old antitrust class action against Apple Inc. finally went to trial in early December. The gist of the claim was that by reconfiguring its DRM system for the then new (now iconic) iPod MP3 players in a way that broke compatibility with RealNetworks’ protocol back in 2006, Apple monopolized the market for digital music. Although the Sherman Act theory was questionable, at best, the presiding federal judge refused to dismiss the complaint or enter summary judgment for either side. After just three hours of deliberations, the jury returned a unanimous verdict for Apple, finding that the new software was a meaningful product improvement over previous versions. (This was also the case where the late Steve Jobs testified, by way of videotaped deposition, from the grave.) Lesson: even monopolists get the blues.

2.  Software & Business Methods Patents Narrowed.  In one of several precedent-setting Supreme Court cases involving intellectual property, the Court ruled in Alice Corp. v. CLS Bank that vague or generic patents, which do little more than operate mathematical algorithms on a general purpose computer, are not “patentable subject matter.” CLS Bank has already had a profound effect on the Court of Appeals for the Federal Circuit, which for nearly the first time invalidated some business method patents on patentablity grounds in its wake, and the the U.S. Patent & Trademark Office, which was far more aggressive in rejecting patent applications during the second half of the year. The longer term consequences in the ongoing debate over patent trolls and patent reform legislation remain to be seen. Lesson: the era of easy patents may be ending. MORE »

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Paraphrasing Selma

by Jonathan Band on December 29, 2014

Among the most powerful moments of Selma, the new film about the march Martin Luther King, Jr. led in 1965 in support of voting rights for African Americans, are the speeches, sermons, and eulogies King delivered during that tumultuous period. However, the speeches performed by actor David Oyelowo in the film do not contain the actual words spoken by King. This is because the King estate would not license the copyright in the speeches to filmmaker Ava DuVernay. Thus, the King estate’s aggressive stance on copyright has literally forced the re-writing of history.

According to the Washington Post, the King estate licensed the film rights to King’s speeches to DreamWorks, with Steven Spielberg producing any resulting films. DuVernay said that she never even asked for the rights to King’s speeches “because we knew those rights are already gone, they’re with Spielberg.” She added that she knew that there were strings attached to the rights: “with those rights came a certain collaboration.” In other words, the King estate uses its control over the copyright to control how King is portrayed. The Post article suggests that this control has prevented the making of a feature film about King—until now. MORE »

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As noted in our two preceding posts about the introduction of the “ancillary right” in Spain (here and here), Google announced it would discontinue operation of the Google News product in Spain, starting tomorrow, December 16.  (Wired UK cites a potential fine of up to €600,000 (~$746,000) for non-compliance after the January 1 deadline.)  In a statement, the Spanish Government shrugged off the company’s response to the “so-called Google tax” as a “business decision.”

Google’s decision surprised no one save perhaps the Spanish news publishers’ association (AEDE).  Responding to the announcement, the AEDE released a statement last week arguing that Google had a dominant position in the news market, and demanded that it not be permitted to exit the market.  Note that the data doesn’t seem to bear this assertion out; relying on data from Similarweb.com, it appears Google.news.es ranks 226th in Spain, miles behind Elpais.com at 16th, and elmundo.es at 18th.  If one limits the data strictly to news media, Google News Spain is still bringing up the rear (at 26th) behind yahoo.com (1st), elpais.com (3rd), msn.com (4th) elmundo.es (5th), and abc.es (7th).

In any event, the association’s about-face epitomizes its love-hate relationship with news search and aggregation: its members love the free traffic that they drive to publishers’ ads, but hate that news search providers and aggregators don’t pay for that privilege.

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As Jakob explained yesterday, the recently enacted “ancillary right” law in Spain is prompting Google News to fold up shop there; it will cease displaying Spanish publications and Google News Spain will exit the market on December 16.

(For background on the ancillary right, see our “explainer” post here.)

The ancillary right fad is but one of several protectionist measures recently launched in European states that extract rents from or restrict market access to technology companies — companies which are often U.S.-based.  (Another example is the misguided “right to be forgotten.”)  This particular Spanish law, set to go into effect in 2015, has been criticized as “ill-conceived” and even “mercantilist.”

While any protectionism should be a cause for concern, this particular instance of heavy-handed regulation merits attention because it so conspicuously violates existing international trade law.  By adopting the ancillary right levy, Spain has broken with clearly established law and the international community.

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Today we learnt that Google will shut down its ‘Google News’ service this year in Spain. This is just one consequence of the introduction in Spain of an ancillary copyright levy (known as the ‘AEDE levy’) affecting online services (apps and websites).

In a nutshell, if an online service uses short snippets to link to content which is deemed ‘news’, or enables internet users to do so, payment to the Spanish news publishers’ collecting society is mandatory. And by “news”, the law targets not just articles from major newspapers, but pretty much any blog or website that provides “information”, “entertainment” or content relevant to “public opinion” (see Art. 32.2 of the final text here).

There is no escape — even if a publisher does not want to be compensated when online services redirect substantial volumes of traffic to his site, even if they want to be included in the service, and even if their content is made available under a Creative Commons license, the law still obliges the publisher to charge.

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Next year marks the 6th triennial rulemaking under Section 1201 of the Digital Millennium Copyright Act (DMCA), a recurring regulatory process which determines to what extent consumers can use content and devices that they own. While the first sale doctrine limits downstream control of protected works, Congress permits content owners to implement use restrictions in the form of “technological protection measures” (TPMs). Every three years the Copyright Office and multiple stakeholders engage in a year-long process to convince the Librarian of Congress to grant or deny exemptions to prohibitions against circumventing TPMs used on certain classes of protected works. The Office will not only continue to implement new administrative procedures next year, but will also address multiple proposed class exemptions that are in front of the Office for the first time.

Jonathan Band provides an excellent summary of the legal history leading to the enactment of this section, but in short Section 1201 bans (1) the circumvention of TPMs, and (2) the manufacturing and “traffic[king]” of circumvention tools. To provide balance, the DMCA allows the Copyright Office to review and grant proposed exemptions to the former. The Office requests public petitions for class exemptions and reviews all petitions de novo, placing the burden on the petitioning party to show by a preponderance of the evidence that harm alleged by the anti-circumvention ban to the proposed class is more likely to occur than not. After a notice and comment period following the petitions, the Office holds public hearings. The Office, in consultation with the National Telecommunications & Information Administration (NTIA), then makes recommendations to the Librarian of Congress, who will subsequently adopt the recommendations. This entire process must be done every three years for all exemptions to the anti-circumvention bans, regardless of whether the Office granted them in the past.

The process has been criticized as an outdated and somewhat ineffective requirement to permit otherwise lawful, fair uses of technology (one recent critic going as far as calling it quite literally lethal to the public). While there are beneficial uses to TPMs, and they can be utilized to effectively balance the concerns of copyright owners and innovators, some contend that the triennial ritual has come up short in effectively realizing this goal.

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On Monday, the New York Times reported about Amazon “disrupting” itself, not referring to Clay Christensen or his disruptive innovation theory by name, but using it in that sense.  (Coincidentally, VC Marc Andreessen had a 17-part tweetstorm on the disruption concept and its misconceptions yesterday, which DisCo has covered before.)  One aspect of this theory is that companies may have to radically shift directions when faced with competition from disruptive entrants — or cannibalize their own existing revenue stream when they realize that a disruptive innovation is what consumers will want and need, not an incremental innovation on their existing product.  As DisCo has explained, Christensen’s work notes that executives at dominant companies are often hesitant to change business models to adopt lower profit margins:

One of the reasons why successful incumbents are so vulnerable to disruptive technologies — as Clayton Christensen pointed out in his seminal work — is that they have a hard time adopting a lower margin business model that would mean sacrificing their current hefty profit margins.  This initial hesitance is often their death, as they are quickly forced out by new, more efficient competitors.

The New York Times discusses how, although Amazon’s revenues went down this quarter, it’s because they are in the process of shifting from a focus on physical books to digital media consumption, including television, movies, and music.  Apple similarly disrupted itself when it released the iPhone, which made the iPod irrelevant, and shifted its focus from personal computers to consumer devices.  Companies like Autodesk have also disrupted themselves with apps.  Many other technology companies face these challenges, as Vivek Wadhwa wrote in a great Washington Post piece earlier this year about the technology industry and disruption, and challenges in leadership.

Self-disruption is likely to occur even more now that technology companies provide so much more than just technology products and services, and compete in industries like entertainment, media, and communication.

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