Recent Articles in Intellectual Property Law from LexMonitor

Week 2, Day 6 of SCO v. Novell Trial - The Mistrial Motion, Kim Madsen, Steve Sabbath, Darl McBride

Tue, 16 Mar 2010 01:44:00 GMT

Chris Brown attended the jury trial today for us in SCO v. Novell, and he has the details about the mistrial motion, the denial of the motion to allow evidence, and there was testimony today from Kim Madsen and Darl McBride and a deposition played of Steven Sabbath. The mistrial was related to the denial of Novell's motion to allow evidence. The judge said what SCO told the jury was inappropriate, and he merely warned SCO not to go "close to the line again." I'm sure SCO will mend its ways immediately.

Court Grants Zep Solar’s Motion to Dismiss Rival’s Non-Infringement DJ

elane@luce.com. (Eric Lane) — Tue, 16 Mar 2010 00:55:40 GMT

In a previous post, I discussed a patent infringement suit filed by solar installer Akeena Solar against Zep Solar, Inc. (Zep), groSolar and High Sun Technology, Inc. (HST) in the Northern District of California. Akeena’s complaint (akeena_complaint.pdf) accused groSolar and HST of infringing U.S. Patent No. 7,406,800 (’800 Patent”), entitled “Mounting system for a solar panel” and directed to an integrated [...]

In a previous post, I discussed a patent infringement suit filed by solar installer Akeena Solar against Zep Solar, Inc. (Zep), groSolar and High Sun Technology, Inc. (HST) in the Northern District of California.

Akeena’s complaint (akeena_complaint.pdf) accused groSolar and HST of infringing U.S. Patent No. 7,406,800 (’800 Patent”), entitled “Mounting system for a solar panel” and directed to an integrated module frame and racking system for solar panels. According to the complaint, Zep’s solar panel mounting system infringes the ‘800 Patent, and groSolar has teamed up with Zep to distribute and install Zep systems.

The complaint also included a claim against Zep and HST for a declaratory judgment (DJ) that Akeena does not infringe Zep’s U.S. Patent No. 7,592,537 (’537 Patent), entitled “Method and apparatus for mounting photovoltaic modules.”

The ‘537 Patent is directed to a photovoltaic module mounting system (10) comprising two adjacent interlocking PV module frames (12L, 12R). Each frame encloses the perimeter of a PV laminate (14) in recesses (23L, 23R). The interlocking mechanism may comprise a separate male coupling member (28) inserted into female channel portions (26L, 26R).

Last month the court dismissed Akeena’s non-infringement DJ claim, finding there was no actual controversy between the parties about the ‘537 Patent (zep_order.pdf).

Akeena had alleged there was an actual controversy sufficient for DJ jurisdiction because of certain e-mails and telephone conversations between the parties including a Zep e-mail to Akeena’s counsel to bring the ‘537 Patent to Akeena’s attention, an e-mail from Zep’s CEO to Akeena’s president stating that “Zep’s legal team is ready for a fight if that is what is needed,” and a telephone conversation in which Zep’s CEO allegedly told Akeena’s president that he would “blow up” Akeena’s patent.

But the court found that the communications at issue were made in response to Akeena’s infringement threats and merely signaled Zep’s intention to preserve its legal rights:

Significantly, Zep’s communications to Plaintiffs have all been in response to Plaintiffs’ accusations of infringement and direct threats of an infringement lawsuit. Objectively, all of Zep’s statements are reasonably read merely as preserving Zep’s legal rights, including the right to attack the validity of Plaintiffs’ patent and to assert Zep’s patent if sued by Plaintiffs.

The court also found it significant that, since the lawsuit was filed, Zep hasn’t asserted a counterclaim that Akeena infringes the ‘537 Patent.

Changing Demands Have In-House Counsel Gaining Over Outside Firms, GCs Say

Tue, 16 Mar 2010 00:41:35 GMT

Spring is near – and it may just bring some new in-house hiring with it: Chief legal officers are responding to corporate demands to cut legal costs by boosting in-house capabilities, often at the expense of their outside counsel, said a panel of chief legal officers at Foley & Lardner’s Chicago offices. [via Changing Demands Have In-House [...]

Spring is near – and it may just bring some new in-house hiring with it:

Chief legal officers are responding to corporate demands to cut legal costs by boosting in-house capabilities, often at the expense of their outside counsel, said a panel of chief legal officers at Foley & Lardner’s Chicago offices.

[via Changing Demands Have In-House Counsel Gaining Over Outside Firms, GCs Say - News - ABA Journal.]

* Find an In-House Counsel Job @ GoInhouse.com *

Judge Denies 2 Novell Motions: for Mistrial and to Allow Evidence

Tue, 16 Mar 2010 00:12:39 GMT

It seems Novell moved for mistrial on March 15 at the trial in SCO v. Novell. And there has been a decision on Novell's motion to allow evidence. The docket doesn't yet reflect the order on the motion to allow evidence, but you can see that it happened in this, the full text of the order on the oral motion by Novell for a mistrial:

This matter is before the Court on Defendant's Motion for Mistrial, made orally on March 15, 2010. For the same reasons stated in denying Defendant's Motion to Allow Evidence Responding to SCO's Allegation that Novell's Slander Continues "To This Very Day," Defendant's Motion for Mistrial is DENIED.

As soon as we have the order providing "the same reasons, I'll update this article.

This Week's Fashion Events: Fun, Facts and Fabric!

Mon, 15 Mar 2010 19:11:53 GMT

Hi Everyone! I hope you had a fabolous weekend and the time change isn't messign with you too much.

Have you finalized you plans for this weeK? If not, here is a quick reminder of some events you should attend:

The Los Angeles International Textile Show (also know as L.A. Textile 2010) starts today at the California Market Center ("CMC").

I am speaking at the following two seminars:

On March 16, 2010 from 3:30–4:30 p.m. I will present “Legal Strategies for a Profitable Fashion Business” in CMC, suite C786; and

On March 17, 2010 from 1–2:15 p.m., I will be part of the panel “How to Plan, Merchandise & Sell Your Products in a Slow Economy,” along with Dana Fried, Ken Wengrod, Sheila Hill and Bobby Hines, and moderated by Frances Harder of Fashion Business Incorporated in CMC 13th-floor penthouse, suite 19.

This Wednesday night, MARCH 17, 2010, at the STANDARD, Downtown LA, Fashion Group International of Los Angeles (FGILA) is hosting a Red Carpet Cocktail Event, saluting over 50 of LA's top fashion designers as they walk the red carpet with their celebrity/model muse.

The designers are being tight lipped about their escorts, but we already know that Natalie Cole and Jane Seymour are among the galaxy of stars walking arm-in-arm with their designer. With more than 50 designers under one roof... history will be made.

We are honored to welcome FGILA's most esteemed supporter, the legendary "godfather of LA fashion", Mr. James Galanos.

Australia's own, Katie Cole performing live at 8pm and DJ Ben Adams aka DJ Jag will spin a cool fashion beat throughout the evening.

For Tickets, RSVP here.

Celebrity Cybersquatting: Trademarks, Domain Names & Cybersquatting

Mon, 15 Mar 2010 17:42:18 GMT

Welcome to Cybersquatting Law Radio brought to you by Traverse Cybersquatting Law, internet lawyers specializing in domain name disputes, resolutions, and all other domaining issues. Play: Celebrity Cybersquatting (click title to listen) With: John Di Giacomo Sponsored by: Traverse Cybersquatting...

Draft UK Rules on Pay Disclosure for Top Earners at Banks

Mon, 15 Mar 2010 17:11:31 GMT

By: Philip J. Morgan

The UK remains at the forefront of international efforts to regulate bank pay practices. On 10th March 2010, the UK Treasury published draft new rules that, if they remain in their current form, will require the annual public disclosure by large banks and building societies of an "executives' remuneration report." See
http://www.hm-treasury.gov.uk/fin_bill_draftregulations.htm

The new rules would, amongst other things, require the annual disclosure of the number of employees within pay bands starting at £500,000 to £1,000,000. They would only apply to a bank (including any associated company providing services to the bank) with more than 1000 employees provided that the bank (either alone or together with its corporate group members where most of the group's activities are financial services activities) also has more than £100 billion of assets on its balance sheet.

Paul Myners, Financial Services Secretary to the Treasury, said "Remuneration remains contentious. The UK cannot be accused of shirking this difficult challenge. From the outset of the crisis, the Government has been focused on eliminating rewards for failure and ensuring that remuneration does not incentivise excessive risk taking or inadequate risk management."

The draft rules implement some of Sir David Walker's proposals to give shareholders more power and information to shape remuneration policies at banks, and in some cases go further. For example, Walker proposed to require disclosure above a £1,000,000 aggregate pay floor.

The rules would require an annual executives' remuneration report to be posted on the internet, with a copy sent to each shareholder. In addition, any bank on the main market of the London Stock Exchange would need to seek shareholder approval of the report by majority vote at its annual general meeting.

The report would include, among other things, a statement of the bank's remuneration policy, a summary of bonus performance conditions and the reasons for them, an explanation of the way in which the policy takes account of risks (including information on the deferral policy and vesting of deferred benefits) and a report from the bank's remuneration committee (if any) relating to the committee's decision making process on these same matters. Perhaps most controversially, the report must disclose the number of executives earning over £500,000 aggregate remuneration per annum and the breakdown of that number into £500,000 bands up to £5,000,000 and thereafter in £1,000,000 bands. The report must also, for each band, give the aggregate amounts paid to employees in the band under the following broad headings: basic salary, expense allowances, cash bonuses, share bonuses, share options, long-term incentive schemes, pension benefits and other benefits.

The disclosure regime is intended to come into force for annual reports in respect of 2010 issued in early 2011.

Plainly, the proposed rules are important, but it remains uncertain whether they would have any real impact on the size or structure of aggregate pay awards. Part of the rationale underlying the proposed rules is the notion that shareholders, armed with more precise information, will be better able to influence bank practices. Yet in the past, the empowerment of shareholders has proven to be an imperfect means of securing change, and it remains to be seen whether these new disclosure rules will make much difference in practice. They will, however, put new information into the public domain, and at a minimum, the UK media can be expected to draw public attention to both the levels of compensation paid and, in particular, compensation levels that are out of line with those of competitors, or with the bank’s financial performance.

SCO Responds to Novell's Motion to Allow Evidence

Mon, 15 Mar 2010 16:58:00 GMT

On Friday, at the trial in SCO v. Novell, SCO told the judge that they'd file their response to Novell's Motion to Allow Evidence on Monday. And so they have:

Novell seeks to present evidence to the jury in the form of snippets of text selectively lifted from prior judicial opinions in this case. Novell claims these snippets would be used to rebut the factually correct assertion, made in SCO's opening statement and the answer of one witness to a single question, that Novell's claim of ownership of the UNIX and UnixWare copyrights continues to appear on Novell's website "to this very day." As with Novell's previous attempts to introduce such evidence, the Court should reject this attempt to present the jury with judicial statements, not in context, that are not relevant to the claims and defenses presented here, but that would create jury confusion and be highly prejudicial to SCO.

Wait. That's not how we remember it. We remember SCO saying not just that the claim of *ownership* continued to this day; they said that the *slander* continued to this very day. From the transcript [PDF]:

So this is a campaign of slander, broadcast and repeated to the world that continues to this very day....
And to this day Novell, on their web site, continues to republish that slander.

You gotta watch the Boies Boyz, my friends, with a very close eye. They could talk a bird out of a tree before he realizes there is no worm.

Top 10 Signs of a Lawyer Email Scam

Mon, 15 Mar 2010 14:40:38 GMT

Scammers Are Branching Out Running internet scams is a tough racket. On the off chance you run across some rube who has still not heard of the Nigerian Prince scam, the odds are low that they have enough money to make the scam worthwhile. Additionally, there are scam-baiters out there who take great pleasure in [...]

Scammers Are Branching Out
Running internet scams is a tough racket. On the off chance you run across some rube who has still not heard of the Nigerian Prince scam, the odds are low that they have enough money to make the scam worthwhile. Additionally, there are scam-baiters out there who take great pleasure in tormenting scammers under the guise of being a victim themselves. There is no doubt about it. It’s hard out here for a scammer.

Increased awareness and decreased portfolios of your average email recipient have sent Nigerian scammers in search of new victims. What they need is a bunch of internet luddites with deep pockets. Enter lawyers.

The Scam
One of the most recent scams targeting lawyers starts something like this:

Dear Counsel,

My name is Wang Xue. I was married to my ex husband Peterson Xue (who lives in your jurisdiction) for 9yrs and in Aug 2009, We mutually agreed under a Collaborative Participation Law Agreement to go our separate ways. Peterson had agreed to pay me $900,000.00 under terms of the agreement so that I can settle down and to his credit; he has paid me $100,000.00 but with an outstanding balance of $800,000.00.I am hereby seeking your legal assistance in collecting the balance or helping me enforce the agreement, and have him honor the agreement inentirety.

I will be providing further information upon your request. I believe that one of
the reasons he has refused to pay is because I have re-married. I understand that been remarried does not automatically void the agreement. Prior to our separation due to irreconcilable differences, we were married for 23yrs of which by his instruction, I was a full time house wife to carter for our four children. Please get back to me if this is a case you can undertake. Let me know if you require consultation fee before you advice or look at the evidence,I am hereby seeking your firm to assist in collecting the balance from him. He has agreed already to pay me the balance but it is my belief that a Law firm like yours is needed to help me collect payment from my ex-husband or litigate this matter if he fails to pay as promised.

Sincerely,
Wang Xue.

NO.6 CHAO WAI STREET
CHAOYANG DISTRICT,BEIJING,CHINA
PHONE:0086-10-86489415

Warning signs
While it is not always easy to spot a scammer, here are some warning signs:

1. Is the email addressed to you, or provided with a generic salutation? Even a scammer should have access to a mail merge program. If they did not even bother to use your actual name, you can feel pretty comfortable passing on the opportunity.
2. Is the request for assistance outside your area of expertise? I am a patent attorney. A request for collection services on a divorce proceeding should be a clear indicator that something is amiss.
3. Does the request lack specifics? “your jurisdiction”? Who says that? More than likely someone sending one email to multiple “jurisdications.”
4. Does the email use strange legal terminology” A Google search of “collaborative participation law agreement” returns “Attorney Email Scams” as the first hit.
5. Does the email use round number? While there are divorce proceedings which result in one spouse owing the other $900,000.00 exactly, round numbers are the stock and trade of internet scammers.
6. Does the email contain spelling and/or grammatical errors? Scammers are notoriously bad spellers. More than a couple errors should raise your suspicion.
7. Is the email coming from a foreign country? The United States is fairly aggressive when it comes to Internet wire fraud. Unless the sender has a confirmed U.S. address, you should proceed with utmost caution.
8. Is there some indication how the email sender found you? If you do not have a verified mutual acquaintance, the odds the sender is a scammer are dramatically increased.
9. Does the email detail a transaction where money is already owed and you are merely being asked to collect, receive or transfer it? This not only acts as an attractive lure, it is also critical to the operation of the scam.
10. Does the deal sound fishy? Take a step back. Is there anything about you or your practice that would make you uniquely suited to resolving the problem outlined in the email? If not, it is likely a scam.

The Classic Nigerian Scam
You are a savvy lawyer. You always ask for money up front. You always cover your back. So how are you going to get scammed? The classic Nigerian scam works by getting you to forward the scammer a small amount of money to pay taxes, bribes, etc. They then ask for a little more money for government fees etc. Since you already have some money sunk, you chase the old money with new money. The scam continues, requesting attorney fees, money for travel, larger bribes etc. until you finally give up. Individual victims have lost hundreds of thousands of dollars with this scam.

The New Lawyer Scam
Online scammers targeting attorneys focus on the typical attorney protocol. Since most attorneys require a retainer, the scammer agrees to send the attorney not only the required retainer, but a large, up-front payment for all the attorney’s services. The scam goes something like this. If you will assist in collecting a large sum of money owed to the scammer, you get to keep a ridiculously large share of the proceeds. The scammer will have all of the money sent to you, you take your cut and you cut the scammer a check for the remainder. How can you lose?

The Large Check
The catch is that the check you receive is fake. The problem is that it is real enough to get deposited in your account. While the funds have not cleared, your account may reflect the entire balance in your account. You cut the scammer a check and before the original check bounces, you find yourself out a fairly large sum of money.

The Aftermath
These scams are typically part of large, complex operations. Confirmed losses from the Nigerian scam are well over $1 billion. Much of this money comes from people embezzling from their companies. While the United States Secret Service is aware of the problem, is has been able to make very few arrests. People who have travelled to Nigeria to recoup their losses have been kidnapped and even killed.

The Weakest Link
If it sounds too good to be true, it probably is. Check out any foreign request for legal assistance very thoroughly. Scammers are seeing a .1-.2% response rate to their email campaigns, by focusing on the weakest link in a large organization. Inform your entire staff about these scams. Simply detailing to your staff the potentially life-threatening devastation these scams can wreak, will significantly reduce the likelihood of you or your firm becoming a victim.

Brett Trout

Tags: e-commerce law, fraud, Internet Law

Northern District of Illinois: False Patent Marking Capitol of the World

david.donoghue@hklaw.com (R. David Donoghue) — Mon, 15 Mar 2010 10:38:03 GMT

The Northern District has become the jurisdiction of choice for 35 USC Section 292 false patent marking suits. Of the more than 80 false marking suits filed this year, more than half were filed in Northern District. Granted many of the suits, 38, have been filed by a single plaintiff and his counsel, but several other plaintiffs have chosen the Chicago federal courts to file complaints that arguably could have been filed in almost any district court. As I have watched the cases pile up, I have spent a fair amount of time trying to determine why the plaintiffs are choosing Chicago. While the numbers could be skewed by one plaintiff, Simonian, that has filed the majority of the cases, several other plaintiffs are availing themselves of the Chicago courts, so I do not think that answers the question. Rather, I think the Chicago filings are a by-product of the new Local Patent Rules, for two reasons: 1) assuming that the Local Patent Rules apply to these cases (and I believe they will) the Local Patent Rules will place most of the upfront responsibilities on the defendant-patentholder; and 2) the proposed case schedule that would have cases tried in two years gives plaintiffs a moderate case length moderating their potential fees and costs while maintaining a relatively high defense cost for the defendants, including the potential threat of the longer pre-Rules schedule for most Northern District of Illinois patent cases prior to enacting the Rules. Before I analyze the reasons further, some background will be valuable as false marking is a very new phenomena in patent law and remains unknown to many.

Modern False Marking Cases

The first of the modern false marking cases, excluding the occasional false marking claim in a broader patent dispute between competitors, was Pequignot v. Solo Cup Co., No 1:07cv897-LMB/TCB (E.D. Va. July 2, 2009). In that case, Solo was accused of falsely marking coffee cup lids sold to Starbucks. The Eastern District of Virginia's Judge Brinkema granted Solo Cup summary judgment finding that there was no intent to deceive the public in Solo's alleged false marking based upon the advice of Solo's counsel that it would be reasonable to replace molds identifying expired patents with molds showing no marking gradually. Additionally, the Court held that a patent marking “offense,” punishable by a fine up to $500, was the decision to improperly mark, not each improperly marked product. That decision significantly reduced the damages potential for false marking cases, and is currently on appeal at the Federal Circuit.

Then in the last week of December 2009, the Federal Circuit decided Forest Group, Inc. v. Bon Tool Co. In that case, the district court followed reasoning similar to the Solo case fining defendant $500 for a single decision to false mark. But the Federal Circuit reversed, holding that the fine was to be assessed per falsely marked product. That drastically changed the damages calculus for false marking claims, and led to the deluge of patent false marking cases beginning this January.

In the first quarter of this year, at least to date, more than XX false marking cases have been filed. The Federal Circuit will soon hear oral argument in Pequignot v. Solo Cup, to rule upon the bounds of the intent required by 35 USC Section 292. The only potential relief for patent holders is a section of the current patent reform bill in the U.S. Senate that would require that the false patent marking plaintiff have been harmed by the alleged false marking – check out a discussion of the provision at the Patent Docs.

The Local Patent Rules are Driving False Marking Cases

With that background, the question remains – why are so many false patent marking cases being filed in the Northern District? As I proposed above, the reasons stem from the Northern District's new Local Patent Rules. First, many people see false marking cases as commercial litigation in patent litigation's clothing. That is not completely the case, however. In fact, the parties must determine whether the marked product reads upon the patent claims, unless the the only issue is an expired patent. That means that the court and the parties must conduct a full infringement analysis with all of the required claim charts, technical analysis, expert discovery, Markman hearings and perhaps even summary judgment motions. That means that the Local Patent Rules will likely govern these cases, bringing with them the required Initial Disclosures and production obligations, and claim charts.

That is significant because the false marking plaintiff does not have all of the obligations of either a typical patent plaintiff or defendant, while the false marking defendant has most of its obligations. The plaintiff will not have to produce his reduction to practice documents, prosecution histories, etc. along with Initial Disclosures, although the defendant likely will have to at least produce the prosecution histories. And the defendant will also have the obligations of a typical defendant – producing documents sufficient to show how each accused product or process works. So, the defendant has initial discovery burdens that are not shared by the plaintiff, and the plaintiff is guaranteed early document production. Additionally, the defendant will likely be obligated to produce initial infringement contentions, after which the plaintiff would have to respond with noninfringement contentions. So, the plaintiff not only escapes initial production requirements, but also gets to file its initial claim charts last. These are significant costs for the defendant which may benefit the plaintiff, at little up front cost. Additionally, knowing that these costs are coming early in the case may drive the defendant's willingness to settle up. Of course, it could always backfire on the plaintiff and drive the defendant's settlement down in line with the amounts spent upon early discovery.

Second, the Local Rules contemplate a two year time-to-trial, as opposed to the prior patent litigation average in Chicago that was likely in excess of three years. So, the plaintiff still has a moderately long time to trial, driving up the defendant's likely litigation fees and expenses, but not so long that the plaintiff feels like it will never see its potential award.

Permission to Exploit Jennifer Aniston's Right of Publicity?

Mon, 15 Mar 2010 06:46:32 GMT

It is probably safe to assume that Channel 45 obtained permission to use Jennifer Aniston's likeness and exploit her right of publicity in promoting viewership of syndicated Friends television programs. That's a deal where everyone appears to win, Channel 45, viewers, advertisers, Aniston, and the other Friends cast members who share in the syndication royalties along with Ms. Aniston.

Last August, I noted the irony of how one of the Friends, Ms. Aniston, appears to have been singled out from her co-star friends, despite their history of solidarity as a group, to serve as the primary marketing face on billboards in promoting viewership of Friends re-runs on television. Then, this month, the above revised billboard caught my attention since it is otherwise identical to prior Aniston billboards, with one key difference. For the past several weeks, Aniston billboards in the Twin Cities have not only promoted Friends, but they have leveraged other non-Friends programming on Channel 45 too.

So, given how often well-intending companies can misapprehend the scope of rights they have been licensed, and given how some are more inclined to ask for forgiveness than advance permission, at times, what I'm not inclined to assume is that Channel 45 obtained an advance license to expand the use of Ms. Aniston's likeness and intellectual property for the additional purpose of promoting viewership of the Minnesota State High School Tournaments on Channel 45.

Since a good portion of the above billboard promotes more than viewership of Friends re-runs, I'm left wondering about the scope of Channel 45's apparent license to use Ms. Aniston's likeness.

Recognizing how carefully celebrities control the use of their likenesses, do you think Channel 45's permission covered any use of Ms. Aniston's likeness beyond promotion of Friends re-runs?

Do you agree, additional permission is required to run the above billboard?

If not, where would you draw the line?

Music Group “The Heavy,” CBS, and NFL Sued For Copyright Infringement Over “How You Like Me Now?” Song

Mon, 15 Mar 2010 04:46:09 GMT

Los Angeles, CA – Drive-In Music Company sued the musical group “The Heavy,” CBS, NFL and others for copyright infringement. In 1969, Arlester Christian wrote the musical composition entitled “Let a Woman Be a Woman, (and Let a Man Be a Man),” which was registered with the U.S. Copyright Office. All the rights to the song were then assigned to Plaintiff in the same year. Here’s the Plaintiff’s musical composition:

Plaintiff alleges that The Heavy composed the “How You Like Me Now?” in 2009, which song is included on their “The House That Dirt Built” compact disc. “The sound recording and musical composition of HOW YOU LIKE willfully infringes the musical composition, ‘LET A WOMAN,’ and uses the identical melody as ‘LET A WOMAN.’” Here’s the Defendants’ composition:

The NFL and CBS became defendants for airing a KIA car commercial incorporating The Heavy’s song during the Super Bowl®. Plaintiff alleges that the infringement is willful and intentional and demands enhanced damages and attorneys’ fees. I will go out on a limb and predict that this case will settle quickly. The case is Drive-In Music Co., Inc. v. CBS Corporation et al., CV10-01783 JFW (C.D. Cal. 2010).

Jim Singer

singerj@pepperlaw.com (Jim Singer) — Mon, 15 Mar 2010 01:14:44 GMT

Patently-O and TechFlash have reported that Amazon.com’s highly-debated “one-click” patent, U.S. Patent 5,960,411, is about to survive reexamination by the USPTO with its claims largely unchanged. The “one-click” patent covers a system for ordering products online with only a single ordering action required by the customer. The patent is often cited as a key impetus for recent [...]

After the public criticism, in 2006 the USPTO ordered a reexamination of the one-click patent. In 2007, during the reexamination, the USPTO upheld claims 6-10. Claim 6 is directed to a client system for ordering an item comprising, among other things, (i) a “single-action ordering component” that sends a requests to a server to order an identified item in response to a single action by a user, and (ii) a “shopping cart ordering component” that, in response to an add-to-shopping cart action, sents a request to a server to add the identified item to a shopping cart.

In a recently-issued Notice of Intent to Issue Reexamination Certificate, the USPTO indicated that it would allow the remaining claims after Amazon.com amended the other claims to include similar features directed to a shopping cart.

Filed under: Patents

Cable Programming Exclusivity Ban Survives Appeal . . . But For How Long?

Sun, 14 Mar 2010 18:52:43 GMT

Split D.C. Circuit panel sidesteps First Amendment argument, upholds FCC prohibition . . . THIS time

The U.S. Court of Appeals for the D.C. Circuit has affirmed the 2007 extension of the Commission’s prohibition against exclusivity arrangements between cable operators and cable-affiliated programming networks. But the likelihood of that prohibition staying on the shelves beyond its current sell-by date (i.e., 2012) is dubious.

For more than 15 years the FCC has prohibited exclusive contracts between cable operators and cable-affiliated programming networks. The prohibition was triggered by the Cable Act of 1992, which reflected Congressional concern about cable’s monopolistic position in the realm of multichannel video programming distributors (MVPDs). But Congress was not inclined to let the FCC engrave the prohibition in stone. Au contraire, Congress included a sunset provision essentially causing the ban to go away automatically in 10 years unless the FCC made an affirmative finding that the prohibition continued to be necessary to protect competition and diversity. In 2002 the Commission made such a finding, leaving the prohibition on the books for another five years. And in 2007, when that extension ran out, the Commission renewed it for another five years.

That’s when Cablevision and Comcast, two of the biggest MVPDs, asked the Circuit to review the ban. In their view, the increasingly competitive MVPD market – now populated by such nouveaux arrivés as satellite TV providers DirecTV and Dish, not to mention telephone companies using their networks to deliver more than phone service – undercut the concerns that gave rise to the ban back in the days of the first President Bush.

By a 2-1 decision, the Circuit panel upheld the FCC. But in so doing, it gave the cable petitioners reason to believe that the prohibition won’t be around a whole lot longer.

The majority opinion, written by Judge David Sentelle (with Judge Thomas Griffith joining him), relied on a standard statutory analysis of the FCC’s decision, an approach in which the Court accords a boatload of deference to the agency. As usually happens when the Court takes that deferential tack, the FCC got the benefit of the doubt: the majority held that the Commission was not unreasonable in its conclusion that the prohibition is still justified, even though a different panel of the Court had held, in an unrelated case decided last August, that “[c]able operators [ . . . ] no longer have the bottleneck power over programming that concerned the Congress in 1992.” (We blogged about that case, which involves the FCC’s ownership caps, here.)

But the victory may not comfort the Commission (or others supporting the prohibition) much. The majority wrapped up its opinion by observing that “[w]e expect that if the [MVPD] market continues to evolve at such a rapid pace, the Commission will soon be able to conclude that the exclusivity prohibition is no longer necessary to preserve and protect competition and diversity in the distribution of video programming.” In other words, while the Court was willing to give the FCC a pass this time around, the Commission shouldn’t necessarily count on similar treatment the next time around.

An interesting aspect of the majority opinion is that it rejected the cable petitioners’ claims that, rather than the lenient, deferential statutory standard of review invoked by the majority, a more rigorous, less-agency-friendly First Amendment standard should apply because the cable operators’ First Amendment rights were (according to the petitioners, at least) at stake. The majority declined to consider any First Amendment arguments because, according to Sentelle, the cable guys didn’t raise them.

That was news to Judge Brett Kavanaugh, whose 29-page dissent – not quite twice as long as the majority opinion – relied heavily on First Amendment analysis to reach the conclusion that the FCC’s prohibition is unconstitutional. In the majority’s view, the cable petitioners never squarely argued that theirs was a First Amendment attack, and (according to the majority) the Court should not be in the business of deciding issues of constitutionality which the petitioner did not “set forth as an issue in the case and to which it refers only obliquely.” [Important practice tip: If you plan to argue a constitutional issue, be sure to refer to the Constitution in your Statement of Issues.] In fairness, while Kavanaugh makes a big effort to “tease out” (in Sentelle’s words) enough constitutional references in the petitioner’s briefs to cobble together an argument, it does appear that the cable guys declined to present the constitutional issue as such.

For their part, while the cable petitioners may take considerable comfort from Judge Kavanaugh’s constitutional analysis, even he had to acknowledge that “the First Amendment rights of a Cablevision or ESPN do not tug at the free speech heartstrings in the same way as the iconic political protester who lies at the core of the First Amendment.” Ouch.

Next stop? The ball is in Cablevision/Comcast’s court. They could sit back and wait for the current extension to expire (in 2012) and see what the FCC does. Or they could continue their litigation by seeking either: (a) reconsideration by the Sentelle/Griffith/Kavanaugh panel; or (b) rehearing en banc by the full D.C. Circuit; or (c) review by the Supreme Court.

The odds of success in pursuing any of those options tend to be long against the guy seeking review. However, consider these facts. First, the cable petitioners have the advantage of a very thoughtful dissent on their side, reflecting at least one judge’s approval of their First Amendment arguments. That might be helpful in persuading Kavanuagh’s colleagues that those arguments have merit. Second, another panel of the Circuit did issue that decision on the cable ownership caps just last August, containing language that could easily be viewed as inconsistent with (or at least in strong tension with) the more recent ruling. The full Circuit might be inclined to look at that aspect to confirm that the Court’s rulings are not heading in opposite directions. And if cable’s goal is really to get the Supreme Court to revisit the issue of cable’s First Amendment rights – an issue last decided there more than a decade ago, by a slim 5-4 vote – Cablevision and/or Comcast may figure that the Supremes might want to take a look (particularly in view of Judge Kavanaugh’s dissent).

Even if the cable petitioners pursue their litigation successfully, though, it’s possible that that litigation won’t be resolved until 2011 or even 2012. And at that point, the prohibition against exclusivity will be expiring anyway . . . unless the Commission decides otherwise.

[Department of Credit-where-credit-is-due: FHH’s own Paul Feldman represented the Broadband Service Providers Association as an amicus on the FCC’s side before the Circuit in this case.]

Privacy's Trajectory

Sun, 14 Mar 2010 18:12:35 GMT

As many of our readers know, the International Association of Privacy Professionals (IAPP) will celebrate 10 years this Tuesday, March 16. In connection with that anniversary, the IAPP is releasing a whitepaper, "A Call For Agility: The Next-Generation Privacy Professional," tomorrow, March 15. Monday morning you can find the whitepaper here. I am honored that the IAPP has given me the opportunity to read and blog about the whitepaper in advance of its official release. Where exactly is privacy going in today's environment? What is the role of the privacy professional over the next 10 years? And, a lot of people I know and love (you know who you are) would ask, what in the world is a privacy professional anyway?

Of late, I have found myself reiterating, and getting a lot of positive feedback for, the following proposition: with data (massive amounts of it) as the new currency, the explosion in outsourcing to "trusted partners," and the growth of legal risks associated with an ever-expanding body of privacy and data security regulation, the role for professionals who understand privacy is becoming increasingly important. Further, such professionals are uniquely positioned to bring together various key stakeholders in an organization, including Information Security, Legal, IT, and various business units. Why? Because privacy professionals are, by virtue of what they do, multidisciplinary. And the growing opportunities for such professionals are inextricably intertwined with that quality. The IAPP has summed this up succinctly, and eloquently in its whitepaper, as follows:

The next 10 years will see more types of data collected from more people, and more privacy laws in more places. A deepening and broadening of data protection regulations in the industrialized world will spread to emerging markets and place a higher premium on legal and compliance acumen. In addition, an expansion of health information networks, smart grid networks and cloud computing platforms will make industry and technology expertise a more indispensable part of practicing privacy.

. . . the privacy professional’s success in the next decade will demand greater adaptability and most importantly, agility. The agile privacy professional is the next-generation privacy professional: an expert practitioner who is keenly attuned to cultural and regional distinctions as these continue to grow in an increasingly interconnected data economy; who can migrate and adapt to different roles within an organization and offer value at each; who exhibits both comfort and grasp of legal/compliance and technical disciplines; and who instills direction and leadership of privacy management within the organization.

The following analysis and discussion of the IAPP's whitepaper is completely my own. I think that the paper raises some incredibly important points about the need for privacy professionals to lead the way for more effective information governance. As an outside lawyer (with my own unique perspective), my key takeaway is the following -- privacy professionals must understand law AND technology, and must facilitate dialogue between those two disciplines and as between those disciplines, on the one hand, and the business side, on the other.

The importance of a "privacy professional" understanding both legal and technical disciplines cannot be overstated:

The central role of regulatory and IT drivers shaping the privacy profession almost ensures an ongoing need for privacy professionals to be conversant in not one, but both of these disciplines.

Regulation and "Reasonable Security"

I believe this is largely due to what the IAPP describes in the whitepaper as the "Second Wave of Regulation," which began in approximately 2003 with California's landmark data breach notification legislation, Civil Code section 1798.82 (for private entities), often called SB 1386. On the heels of that came 44 additional such state laws, DC, Puerto Rico, the Virgin Islands, and now some similar European legislation, as discussed in the whitepaper. And, with the light now shining on security risks and failures within private organizations, additional security standards and legislation began to emerge - most notably, as highlighted by the IAPP, the Payment Card Industry (PCI) Data Security Standard (DSS) and laws such as Nevada's (SB 227) that incorporate that Standard. For more on that, see Dave's posts here, here and here. Further, as noted in the whitepaper,

A number of factors have spurred North American (and particularly American) organizations to dedicate more resources to privacy process improvement: most notably, PCI DSS enforcement, FTC enforcement, and data breach notification.

Not discussed in the IAPP whitepaper in depth, but just as important, a number of states have crafted legislation designed to require "reasonable" security or safeguards to address security risks in a more proactive fashion, as opposed to the traditional reactive breach notification approach. Massachusetts, Massachusetts M.G.L. c. 93H and 201 CMR §§ 17.00-17.05, is of course the most recent, most detailed, and most well known, but many states require the same "reasonable security" (sometimes for all personal information, sometimes for just Social Security numbers), including, but not limited to, California (Civ. Code §§ 1798.81, 1798.81.5, and 1798.85), Arkansas (Code Ann. §4-110-104(b)), Colorado (Rev. Stat. Ann. §6-1-713), Connecticut (HB 5658), Maryland (Com. Law Code Ann. § 14-3503), Nevada, as mentioned above (Rev. Stat. § 603A.210 and SB 227), Oregon (Rev. Stat. § 646A.622), Rhode Island (Stat. § 11-49.2-2), Texas (Bus. & Com. Code Ann §§ 48.102(a) and 521.001, .052, .151) Utah (Code Ann. § 13-44-201), and Washington (Rev. Code Ann. §19.215.020 to .030). There are more, I could go on.

What in the world is "reasonable security"? A privacy professional who understands the law and traditional notions of negligence, various concepts of privacy (Fair Information Practice Principles, etc.) as embodied in different standards and legislation around the world (from EU to Australia), and the evolution of information security (as a technical matter) is ideally positioned to help assess what "reasonable security" means and determine what will be compliant, what will be legally defensible, what will be best practice, and what will be just good business. And such a privacy professional can facilitate discussions among stakeholders that speak somewhat different languages in this regard to reach solutions that are acceptable to all involved.

From Privacy to Information Governance

As a lawyer, I am also extraordinarily pleased to see, in the IAPP's whitepaper, a reference to the new ediscovery rules that came into play in the latter half of the 2000s, most notably the amendments to the Federal Rules of Civil Procedure in 2006. What does privacy have to do with ediscovery? Everything. As noted in the IAPP's whitepaper, the amended rules "increased the need for organizations to conduct data inventories and implement data-retention policies." How do you protect sensitive data (personally identifiable information, trade secrets, IP, etc.)? You figure out where it is first. And thus, as the IAPP points out, we start to see the "privacy" role evolve into an information governance role.

Speaking of information governance, let's return to technology. States the IAPP: cloud computing will set the pace for the next decade:

One of the clear directions of technology in the past 10 years as it pertains to personal data has been more—more types of data collected from more people in more ways, and shared with more entities. The emergence of cloud computing—essentially a new computing paradigm in which data is stored off-premises and by a range of third parties—sets the pace for the next decade. Short of a wholesale social movement to opt out of information technology and “go dark,” the conveniences and commercial benefits of more data collection and sharing seem to point in the direction of more. People will not 'go dark,' we estimate, because the utility of sharing information will continue to well exceed the risks of doing so.

Thus, the IAPP stresses the need for agility and identifies five strategies for action:

(1) Redefine the privacy role [information governance]; (2) Rotate through departments/business units; (3) Develop multi-cultural literacy; (4) Understand legal and technical disciplines; and, (5) Instill direction and leadership.

Bottom line? Proactive, multidisciplinary solutions to information governance that incorporate information technology savvy and that address compliance, legal defensibility, and best practices, are now and will become increasingly crucial to any organization that handles sensitive data. Privacy professionals are well positioned to lead those efforts. Congratulations to the IAPP on its 10th anniversary! I look forward to the next 10 years.

Novell's Petition for Writ of Certiorari - as text

Sat, 13 Mar 2010 23:02:15 GMT

We have the Novell's Petition for a Writ of Ceriorari [PDF] as text. This is its petition, asking the US Supreme Court to review the decision by the US Court of the Appeals for the Tenth Circuit. Here are the two orders that the appeals court reviewed, Judge Dale Kimball's August 10, 2007 Memorandum and Order and the November 20, 2008 Final Judgment. Odds are always against the petitioner to the U.S. Supreme Court, of course, and the earliest it could be heard would be in April, we learned from a remark at Friday's trial in SCO v. Novell, so the trial will be over before this is heard, even if it beats the odds.

Nevertheless, it's an important document, because it raises an important question: how should copyright transfers be evidenced? US Copyright law requires a writing, but what should happen if the writing isn't clear about which copyrights, if any, were conveyed? Should it be up to a jury to decide and more or less make it up out of the memories of participants of yore?

You think I jest. Not at all. That is exactly what is happening in SCO v. Novell currently in the trial. How would you like to have your copyright ownership decided like that? Still want to if the memories rrelied upon are those of Darl McBride and his friends and allies?

Monday's Bankruptcy Hearing Rescheduled for April 7 at 3 PM

Sat, 13 Mar 2010 20:22:32 GMT

The hearing on the motion to approve the sale of SCO's mobility products to Darl McBride, exCEO of SCO, has been rescheduled. So don't show up, if you were planning to on Monday. It is now set for April 7th at 3:00 PM Delaware time, unless there are no objections and no competing offers, in which case the judge can just sign off on it.

Protecting an Idea

jdmesq@gmail.com (J. Douglas Miller) — Sat, 13 Mar 2010 15:52:39 GMT

A recent article at CFO.com discusses the importance of protecting intellectual property. Yours truly was interviewed for the article. The article focuses on the increased emphasis placed on protecting IP assets during tough economic times.

Texas Toasted? How to Slice the Trademark Spectrum of Distinctiveness

Sat, 13 Mar 2010 15:07:22 GMT

Texas Toast is the generic name for a type of bread, you know, the big thick double-cut slices. Anyone can call their bread Texas Toast if that is what they are selling, and, by the way, it doesn't have to be toasted for the name to fit.

But, what if you're selling a product made from bread, say, croutons? Can Texas Toast be owned and registered as a trademark for croutons? What if they are big, thick croutons, with a "Texas Toast" cut? And, if you market your croutons as "New York " brand, "The Original Texas Toast" croutons, does that not imply, if not admit, that others are free to compete by selling their own brand of, perhaps, non-original "Texas Toast" croutons? What if you didn't start using a TM designation until after you noticed your competition selling Texas Toast croutons? Interesting questions, no doubt.

Well, ten days ago, a federal district judge in Ohio denied cross-motions for summary judgment in a trademark infringement case over an Ohio company's claimed common law unregistered rights in "Texas Toast" for croutons and a Grand Rapids, Michigan company's claimed descriptive fair use of "Texas Toast" also in connection with croutons. As an aside, having spent two years in school there, when I think of Grand Rapids, Michigan, and bread, sorry, all that comes to mind for me, are the wonderfully and perfectly steamed hot dog buns at the world famous Yesterdog.

In any event, back to Texas Toast, here is a pdf of the decision in T. Marzetti Co. v. Roskam Baking Co. , indicating that it is too early to decide the Texas Toast trademark infringement case because there are several disputed issues of fact, including, among others, the meaning and the term's placement on the all-important Spectrum of Distinctiveness, i.e., whether "Texas Toast" is generic, descriptive, or suggestive for croutons.

Now, since the case wasn't cut short and decided on summary judgment with a limited record, we'll have to wait and see how the evidence shapes up and whose claim ends up being, eh, toasted, but I'll have to say, at this point, "Texas Toast" sounds to me like a category of croutons -- those cut from texas toast style bread; like Lite and Light is to beer, and Brick Oven is to pizza -- each are generic terms that are not own-able for those goods, because they designate a category of goods, not the origin or source of the goods. By the way, it doesn't matter if you're the first to use a generic term, if found generic, it is available for use by all, even direct competitors.

So, this is probably one of those trademark cases where who wins will come down to the proper placement of the claimed mark on the Spectrum of Distinctiveness. If generic, case over, defendant wins. If suggestive, plaintiff acquired rights based on its first use, two years prior to defendant's use, and will likely win, provided a likelihood of confusion can be shown. If descriptive, plaintiff will be in the difficult position of proving that it acquired distinctiveness in "Texas Toast" prior to defendant's first use, so within a short two-year period of time. If so, good luck with that.

No doubt, when it comes time for trial (or perhaps another summary judgment motion prior to trial), the plaintiff will make the most of the fact that the Trademark Office did not issue a descriptiveness or a genericness refusal on TEXAS TOAST for croutons, see the USPTO details here. Seems like an oversight to me, at least with respect to descriptiveness, after all, the plaintiff has the number one selling brand of texas toast style garlic bread, and they now have expanded that use into the field of croutons.

Ironically, to put its TEXAS TOAST trademark application in condition for publication by the U.S. Trademark Office Marzetti had to argue, and did so successfully, that it wasn't likely to be confused with the prior federally-registered TEXTOAST trademark for bakery products. In doing so, it narrowed its description of goods from "croutons" to "croutons sold in a salad toppings section of grocery stores and supermarkets." Given that Marzetti's mark will now be published for opposition, it is probably safe to assume that Roskam Baking will now oppose registration of Marzetti's claimed TEXAS TOAST mark for croutons, so it doesn't become registered prior to trial, but we'll see.

So, what do you think about the critical Spectrum of Distinctiveness questions?

Is Texas Toast generic for a category of croutons made from texas toast style cuts of bread?
Is Texas Toast merely descriptive of croutons because it immediately describes a feature, characteristic, or attribute of croutons? or
Is Texas Toast suggestive of croutons, because, a consumer's imagination is required to understand the connection between the mark and the goods, or as plaintiff argues, "everything is bigger in Texas."

Is plaintiff Marzetti's suggestiveness argument all hat and no cattle?

Now, vote again, after reading plaintiff's own description of its croutons below the jump.

We think croutons should be big and bold -- big in size and bold in flavor. That's why we've developed New York Brand Texas Toast Croutons with the Texas Toast cut. They're made with the same commitment to great taste that's made New York Brand Texas Toast America's top-selling frozen garlic bread.

We start with home-baked French bread, generously seasoned for optimal taste satisfaction, and then we cut the loaves into big Texas-sized bites. Bigger bites and bolder flavor -- that's what makes New York Brand Texas Toast Croutons so delicious!

Does this explanation help our hurt the plaintiff's case?

Does it remind you of the SmashBurger fiasco from not too long ago?

Key US and UK Immigration Issues for Employers

Sat, 13 Mar 2010 14:17:42 GMT

For many employers in the United States and United Kingdom, talented workers from outside the US or Europe, respectively, are essential to the continued success of the business. However, numerous considerations must be taken into account, and sound legal advice taken, each and every time a non-domestic worker is hired, retained, transferred or even [...]

This article aims to provide a brief overview of some of the most important and pertinent issues that must be considered, firstly for those employers based in the US, and then for their UK counterparts, before commenting on an issue of equal importance in both jurisdictions.

Considerations For US Based Entities

Explore Your Employment Options For Hiring Foreign-Born Individuals

Notwithstanding last year’s lengthened period of H-1B availability under the cap, employers were still left with more than a nine month gap (from December 22, 2009 until October 1, 2010) for new H-1B visas to become available for FY 2011, the filing season for which will begin on April 1. So what is your business to do in the meantime? While there are a limited number of options presented by the “alphabet soup” of temporary visa categories currently available under the law, there are, indeed, viable alternatives for potential hires for whom you cannot (or will not) wait until October 1, 2010 to employ (e.g. B-1 in lieu of H-1B, O-1, E-2, H-3).

Consider Strategies To Expedite Hiring

The following are strategies that may be available to an employer to expedite the employment of foreign national workers:

o H-1B portability: Visa portability provisions allow a foreign national accorded H-1B status to begin working for a new H-1B employer as soon as the new employer files a “nonfrivolous” H-1B petition on behalf of the foreign national. Such portability provisions relieve the foreign national from the need to await approval notification from US Citizenship and Immigration Services (“USCIS”) before commencing his/her new H-1B employment.
o The availability of premium processing: USCIS established a premium processing program to expedite the adjudication of certain employment-based petitions and applications within fifteen calendar days upon payment of the premium processing fee. The following non-immigrant visa categories are eligible for premium processing: E-1/E-2, H-1B, H-2B, H-3, L-1, O-1, P-1/P-2/P-3, Q-1, R-1, and TN.

Plan Ahead For “Administrative Processing” Delays At US Consulates Abroad

When an employee is required to travel outside of the US, it will be necessary for that employee to have the appropriate valid visa prior to re-entering the US. Such visa must be obtained from a US Consulate abroad after a personal interview. Due to a rise in “administrative processing” delays at US consulates abroad, you should prepare your employee and your business for such a delay. Indeed, even without an “administrative processing” delay, it could take a month or longer to obtain a visa appointment. Thus, the employee should plan ahead for their trip abroad.

While these delays are generally unavoidable, there are a few steps to minimize the work interruption should an employee become subject to administrative processing:

o Confer with immigration counsel to ensure that the written materials the employee will bring to his/her interview are complete and up-to-date and that the employee has completed the necessary steps to schedule the interview at the US Consulate within the appropriate time period;
o Inform the employee’s supervisor of the possibility of a delay in visa issuance on account of security checks; and
o Develop an alternative work plan: With today’s technology, it is often possible for your employee to work abroad during such delays. If your employee has the ability to do so, he/she should bring the necessary devices/materials on his/her trip abroad.

Have A Policy In Place For Terminating The Employment of Foreign Nationals

Of course, lay-offs are a fact of life, especially so in today’s economic environment. In circumstances involving a reduction in force, US company policies typically offer a few weeks of “severance” (with the date of termination effective immediately) in lieu of providing the employee with notice of the actual termination. While such severance packages may be fair, they (often unknowingly) present a unique set of problems to employees working pursuant to a work visa, since most work visa classifications are “employer specific”. This means that the foreign national worker is not only dependent upon his/her employer for wages, but for his/her ability to remain in legal status in the US. Indeed, the US Department of Homeland Security considers a foreign national worker to be “out of status” as of the date of termination—regardless of the duration or amount of severance.

As such, for a terminated foreign national to remain in the US in an authorized period of stay, an application for an extension of stay (assuming new employment is found) or a change of status to another non-immigrant classification (e.g. B-2 visitor for pleasure) must be filed prior to or contemporaneous with the termination of one’s employment. This is true not only for the worker, but also for his/her family. A failure to do so will likely render the entire family “out of status” and subject to removal from the US.

To ameliorate these harsh effects, employers should consider providing their foreign national employees with a fair period of notice before they are actually terminated from employment.

Considerations For UK-Based Entities

Establish Which Rules Are In Force

Since the UK Border Agency (‘UKBA’) introduced its new points-based system (‘PBS’) in late 2008, there have been several amendments made to both the immigration rules themselves and their accompanying guidance. Although these have been largely welcomed, there have been ‘teething problems’, and it is sometimes difficult to keep track of which rules are currently applicable to the situation in hand.

For example, several major changes to the PBS will be taking place on 6 April 2010. It is therefore important to ensure that relevant staff receive regular and adequate training to avoid inadvertent breaches of the UK immigration rules, and if you are unsure as to the nature or source of the new rules, that specialist legal advice is taken from immigration counsel.

Should The Entity Become A Registered Sponsor?

There are pros and cons to each available route under the PBS, which will require careful analysis before any role is offered to an employee who is not a citizen of a European Economic Area state or Switzerland. A larger international organisation hiring non-EEA/Swiss employees on a regular basis may prefer to use the Tier 2 sponsorship route, where available, as once the initial administrative hurdle of becoming licensed by the UKBA has been overcome, time will be saved when each qualifying migrant employee is offered a role.

This route is not a method of avoiding the strict points requirements for business migrants however, and the initial registration process can be cumbersome and expensive. Ongoing sponsor compliance obligations and duties are also onerous and the UKBA will often monitor licensed organisations closely.

Smaller entities or those offering a one-off role to a non-EEA/Swiss employee should therefore consider other routes. For example, although the Tier 1 scheme is aimed towards individuals, this can also be very useful for employers not wishing to become registered sponsors.

What Is Best For The Employee?

A happy workforce is invaluable, and it is therefore not simply the employer’s best interests that will be relevant in most cases.

Communication with the employee in question will often be vital, so that all bases are covered but also to ensure that their family and future needs are considered. For example, if they wish to eventually settle in the UK, a particular PBS route may facilitate this for them, whilst another PBS route may not.

Keeping Internal Records Up To Date

Finally, whichever route is chosen by the UK organisation to employ foreign workers, essential housekeeping of personnel files must be done on a regular basis. This means HR organisation in terms of, for instance, keeping track of which employees require visas and the dates on which those visas are due to expire, to avoid any inadvertent breaches of the immigration rules.

The UKBA has powers to issue warnings and both civil and criminal penalties, and fines will be issued of up to £10,000 per illegal immigrant employed by an organisation, which can prove extremely costly. In addition, sponsorship status will be demoted or revoked, and individuals can be deported and banned from re-entering the UK if found to have breached the immigration rules.

An Important Consideration For Both US And UK Based Entities

Develop Long-Term Immigration Strategies For Your Workforce

To help accomplish your staffing goals and thus remain competitive in today’s global economy, it is the role of immigration counsel, in partnership with business owners and/or human resources personnel, to focus on “the bigger picture” for key, foreign-born personnel to ensure that those individuals are in a position to gain entry to and then remain in the US or UK for as long as necessary to achieve the goals of the business. Such long-term strategies should be discussed prior to (if necessary), or at the time of, hiring each foreign national (leaving sufficient time to collect relevant documents and submit immigration applications), and should be revisited over the course of the business’ employment relationship with each such employee. These plans should never be left to the eleventh hour as poor planning will likely result in short-changing your long-term employment options with a valuable employee.

Anthony Siliato and Scott Malyk specialize in US business immigration law at Meyner and Landis LLP in Newark, New Jersey: Feel free to visit their firm website at www.meyner.com or blogs at www.corporateimmigrationlaw.com and http://blogs.ilw.com/h1bvisablog/

Edward Wanambwa and Esther Martin are specialists in UK business immigration law at CM Murray LLP in London, England. Feel free to visit their firm website at www.cm-murray.com