Recent Articles in Intellectual Property Law from LexMonitor

Mobile Content Providers Settle Unauthorized Billing Class Action

Thu, 02 Sep 2010 17:00:00 GMT

While the FCC has taken an interest in mobile marketing by carriers -- most notably with investigations of carrier early termination fees and proceedings examining wireless consumer "bill shock" -- it also is helpful to remember that the mobile content providers are subject to enforcement for deceptive marketing practices. Our colleagues at the Ad Law Access blog covered a recent settlement of a class action lawsuit by several mobile marketers. They remind marketers to clearly and conspicuously disclose costs so that consumers know what they are obligated to pay. Mobile service providers should ensure that their billing and collection agreements impose such an obligation on the content provider and that the carrier properly polices compliance.

Read the Ad Law Access story here.

Finally We Get to Read the Mobility Assets Sale Agreement with Darl McBride

Thu, 02 Sep 2010 16:46:56 GMT

Darl's purchase of the mobility assets was all done pretty much in the dark. We, the public were told one thing in advance, but something else after the fact. But now we get to see the final agreement.

Darl and Me Inc Holdings LLC, Darl's LLC, got not only the copyrights but a patent application as well, including rights to sue for any past infringement. The patent is entitled "Systems and Methods for Providing Distributed Applications and Services for Intelligent Mobile Devices," and the application was filed in 2006, #11/533347. We were told in advance of the sale that this patent application was excluded, but then he got it anyway.

What was SCO thinking, I was asking myself as I read the agreement? I could just see it: "Darl sues Google's Android". Why not? Everyone else and his dog is. Of course there's some prior art on that method of making fast, easy money. Seriously, though, if you check the transaction history for this patent application with the USPTO's PAIR system, what you learn is fascinatingly funny.

At the time of the sale in April, the patent application was still working its way through the system. There was a non-final rejection notice that issued in January of 2010, which presumably Darl knew about if he did any due diligence. In July, post-sale, there was a request for more time to answer that notice and then they filed a reply. But on August 17, there was a final notice of rejection anyway of claims 1-17 and 19-20. Prior art and obviousness. Claim 18 had been "withdrawn from consideration" so the rejection was not only final but total. Darl has 3 months to reply, and, in some conceivable convoluted drag-it-out process the rejection outlines, it could last six months, tops. But it looks like Darl bought a pig in a poke.

And some of you say there is no God.

Grandma Robbed by Nazis - Grandson Sues Spain to Recover Stolen Paintings

Thu, 02 Sep 2010 12:24:16 GMT

In August, 2009, the Ninth Circuit decided en banc by 9-2 that a California resident Claude Cassirer can sue Spain to recover his grandmother's oil painting "Rue Saint-Honore, apres-midi, effet de pluie," painted by the French impressionist Camille Pissarro and taken by the Nazi government. (Cassirer v. Kingdom of Spain, 2010 U.S. App. 2010 WL 3169570 (9th Cir. 2010).) The court rejected Spain's defense, holding that the defendants cannot claim a sovereign immunity from suit in the U.S. under the Foreign Sovereign Immunities Act ("FSIA").

The plaintiff's grandmother, Lilly Cassirer, owned the painting in Germany. After the World War II started, being threatened as a German Jew, she had to leave the country and "sell" the painting without being paid. The Gestapo of the Nazi government eventually confiscated the painting, which was purchased by several collectors and ended up in the hand of the Thyssen-Bornemisza Collection Foundation, an instrumentality of Spain. When the plaintiff Claude Cassirer discovered in 2000 that the painting was displayed at the Madrid museum, he asked the Spanish government to return it, but the request was refused.

He sued Spain and the Foundation in the U.S. district court of California in 2005, seeking return of the painting or recovery of damages for conversion. In response, Spain and the Foundation filed a motion to dismiss, claiming that the plaintiff cannot sue them under the FSIA. The FSIA makes a foreign country immune from the jurisdiction of the U.S. courts unless an exception applies. (28 U.S.C. §§ 1602, 1604.) The only pertinent exception in this case is provided by section 1605(a)(3), "takings exception," where a foreign state is not immune if "right in property [was] taken in violation of international law . . . and that property . . . is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States." (28 U.S.C. § 1605(a)(3).) Against this background, the Ninth Circuit focused on three issues.

(1) Does the FSIA's takings exception apply to Spain, which did not expropriate the property?

The court dismissed the defendants' argument that the takings exception does not apply to Spain, which subsequently purchased the painting. The court reasoned that the plain language of section 1605(a)(3) does not require that defendant foreign state be the entity that took the property in violation of international law. The court pointed out that the textual passive voice "property taken in violation of international law" focuses on an event without regard to a specific foreign country that took the property. In addition, it briefly examined Congress' intention in legislating the FSIA, and concluded that the purpose of the FSIA buttresses the plain meaning of the text.

(2) Was the Foundation engaged in sufficient commercial activities in the U.S.?

The court also dismissed another claim by the defendants that the Foundation's activities in the U.S. were de minimis and in lack of the requisite connection to the property. The court stated that the Foundation engaged in many commercial activities in the U.S., including buying books, selling the museum's products, and advertizing the museum. Again, the court looked to the plain language of section 1605(a)(3), and held that the clause does not require plaintiff's claim to arise out of specific activity involving the property in the U.S., unlike the traditional concepts of specific personal jurisdiction.

(3) Is the plaintiff required to exhaust judicial remedies in Spain before suing in the U.S.?

Further, the court dismissed Spain's claim that the plaintiff is required to exhaust judicial remedies available in local jurisdiction (here Spain or Germany) before the court may determine whether Spain is immune from suit. The court relied on the plain language of section 1605(a)(3) to conclude that the text does not contain such requirement. The general rule is that judicial discretion governs where Congress has not clearly required exhaustion, the court stated.

Accordingly, the Ninth Circuit concluded that the defendants are not immune from a suit, and the courts in the U.S. entertain subject matter jurisdiction over them. Beyond that, the court expressed no opinion, leaving the decisions to the district court.

Dissents

Two judges disagreed with the majority, reasoning that a taking by the Nazi government in violation of international law does not invoke waiver of sovereign immunity by Spain. As opposed to the majority's opinion, the dissents think that the plain meaning of the statutory text is ambiguous, which demands more exacting statutory interpretation than the majority did. For example, they stated that the statute should not be construed in a way to violate the Due Process Clause of the U.S. Constitution or international law, as done by the majority. Further, for policy reason, the dissents expressed concern of numerous lawsuits as a consequence of allowing jurisdiction over any foreign state that possesses property that was previously taken by another state in violation of international law. They were also concerned about diplomatic implications by letting Spain suffer loss of its sovereign immunity.

adammizera

mizera@robic.com (Adam Mizera) — Thu, 02 Sep 2010 10:39:47 GMT

Le USPTO a publié une nouvelle proposition de lignes directrices pour les examinateurs pour évaluer le critère d’inventivité suite à l’application de la jurisprudence après l’affaire KSR, une décision de la Cour suprême qui avait récemment redéfini les critères pour évaluer l’inventivité d’une invention aux États-Unis. Le document contient beaucoup d’exemples extraits tirés de la [...]

Voir l’annonce du USPTO

Voir la proposition de nouvelles lignes directrices

Extrait pertinent du document:

Many basic approaches that a practitioner may use to demonstrate nonobviousness also continue to apply in the post-KSR era. Since it is now clear that a strict TSM approach is not the only way to establish a prima facie case of obviousness, it is true that practitioners have been required to shift the emphasis of their nonobviousness arguments to a certain degree. However, familiar lines of argument still apply, including teaching away from the claimed invention by the prior art, lack of a reasonable expectation of success, and unexpected results. Indeed, they

may have even taken on added importance in view of the recognition in KSR of a variety of possible rationales.

adammizera

mizera@robic.com (Adam Mizera) — Thu, 02 Sep 2010 10:20:08 GMT

Rapport d’un sondage effectué par Fasken Martineau, tel que rapporté par IPFontline Donnée intéressante: seulement 56% des répondants se disent propriétaires de PI sous forme de droit d’auteur – alors que la réponse devrait être proche de 100%

Rapport d’un sondage effectué par Fasken Martineau, tel que rapporté par IPFontline

Donnée intéressante: seulement 56% des répondants se disent propriétaires de PI sous forme de droit d’auteur – alors que la réponse devrait être proche de 100%

Legal Issues on IT Outsourcing of Financial Institutions

Thu, 02 Sep 2010 09:13:17 GMT

By Li Jinnan and Jiang Hualiang, King & Wood's Banking & Finance Practice

With the recent development of the service outsourcing industry, an increasing number of financial institutions (including banks, securities companies, insurance companies and fund management companies) use financial service outsourcing to reduce costs, enhance core competitiveness, and accomplish strategic goals. Financial institutions are able to benefit significantly from IT outsourcing, which is an important part of financial service outsourcing. At the same time, they must also confront the managing risks that are associated with IT outsourcing. Based on our past experience with counseling on IT outsourcing to financial institutions, the followings are the primary legal issues relating to the terms in and execution of IT outsourcing agreements, using banking institutions ("banks") as examples. The discussion will focus on how banks should manage potential risks from negotiating such an agreement.

I. Scope of Outsourcing by and Management Responsibilities of a Bank
A. Scope of Outsourcing

The scope of outsourcing is the first decision a bank needs to make before outsourcing its services. Currently, the China Banking Regulatory Commission ("CBRC") has not established general restrictions regarding the scope of IT outsourcing that a bank can engage in. However, a bank should not outsource its IT technology management responsibilities and must report to the CBRC or its branch offices any important outsourcing engagement (see below Section I Subsection C, Report to Supervisory Authority or Notice to Client). Therefore, relevant supervisory authorities may not permit a bank to outsource the management or maintenance of some of its highly confidential or core information systems.

B. Cross-border Outsourcing

In recent years, a number of financial institutions have engaged outsourcing service providers in India, China, and other developing countries because of the lower labor and operational costs in these countries. However, the accumulation of outsourcing service to one or a few countries may amplify the "Country Risk" of the information. Once an offshore outsourcing country faces an incomprehensible problem, the financial institutions outsourcing their business to such a country may suffer irreparable harm. Therefore, the supervisory authorities in many countries tend to take a cautious regulatory approach towards the cross-border outsourcing implemented by banks.

The CBRC's Guidelines on Risk Management of Outsourcing by Banking Institutions ("Risk Management Guidelines") require that a bank which conducts cross-border outsourcing shall prudently assess the legal and regulatory risks to ensure the security of the clients' information. The Risk Management Guidelines also establish that such a bank must make sure the regulatory authority at the place where the service provider is located have signed a memorandum of understanding or other agreements with China's banking regulatory authority. Moreover, the CBRC's Guidelines on Risk Management of Commercial Banks' Information Technology ("Technology Management Guidelines") require that the board of directors shall ensure a bank operates the core system containing client information, account information and product information independently and within the territory of China.

C. Report to the Supervisory Authority or Notice to Client

According to the Technology Management Guidelines, the banks shall exercise precautions when implementing important outsourcings (such as data centers and information technology facilities), and shall report these outsourcings to the CBRC or its branches in writing. In addition, the Guidelines require that any outsourcings involving client information be deemed an important outsourcing of the bank. As the existing PRC law is unclear about the definition of "important outsourcing," we suggest that the banks consult with the competent supervisory authority at their domicile if they are uncertain about whether the outsourcing to be performed will be regarded as an important outsourcing subject to reporting duty to CBRC.

The Administrative Rules on Electronic Banking ("E-Banking Rules") provide that banks shall report any outsourcing of electronic banking. According to the E-Banking Rules, a bank shall report to the CBRC before outsourcing the general design and development of electronic banking transaction processing system, authorization management system, data backup system, and other confidential information management and transmission systems.

In addition, the Risk Management Guidelines require the bank to submit an outsourcing appraisal report to the local branch of the CBRC regularly. However, banks will need further clarification or detailed guidance of the relevant authority on compliance.

In addition to the responsibility of reporting to the supervisory authority, in certain circumstances, the banks also need to inform the relevant clients about their outsourcing arrangement. For example, the Technology Management Guidelines require that a bank shall notify clients any outsourcing involving the client information.

D. Internal Approval

According to the relevant regulations, all IT outsourcing contracts of a bank shall be approved by the bank's department of information technology risk management, legal department, and its information technology management committee. Certain IT outsourcing contracts may require the approval of the board of directors.

E. Compliance of Offshore Regulatory Authority

When implementing outsourcing, the foreign-invested commercial banks in China shall comply with the requirements of the CBRC as well as those of the regulatory authorities in their home country. Therefore, these banks need to manage the risk arising from the regulatory difference between China and their home country.

II. Summary Terms of Outsourcing Contracts

The CBRC requires that banks must enter into IT outsourcing contracts when engaging IT outsourcing services. The contracts shall be in written forms and clearly provide the rights and responsibilities of the parties. An IT outsourcing contract usually consists of the outsourcing agreement and the service level agreement.

A. Outsourcing Agreement

An outsourcing agreement shall at least contain the following terms: (1) the scope and standards of the outsourcing service; (2) the confidentiality and security of the outsourcing service; (3) the continuity of the outsourcing service; (4) the auditing of and inspection on the outsourcing service; (5) the dispute resolution arrangement of the outsourcing service; (6) the transitional arrangement upon revision or termination of the agreement; and (7) the liabilities in case of default.

The outsourcing agreement shall have both effective binding force on the parties and a certain amount of flexibility. An inadequate outsourcing agreement may lead to uncertainties during the service provider's performance of the IT outsourcing service. In practice, some outsourcing agreements do not include detailed provisions to govern the service provider's performance, quality of service, and rights and responsibilities of the parties. In this case, disputes may arise and the business that the bank outsources may be at risk if the parties are unable to timely execute supplementary agreements to address new situations, issues, and risks that arise during the performance of the outsourcing agreement. For these reasons, the banks should strive to make the outsourcing agreement as clear, specific, and meticulous as possible when drafting the agreement. However, due to the nature of IT outsourcing, a bank's need varies in different phases of business development (especially when two parties have established a long-term cooperative relationship). Therefore, the parties may need to amend the agreement as needed to make sure the performance of the agreement will not be affected. If the outsourcing agreement lacks flexibility, the time budget and financial costs that the parties will need to bear for additional negotiations may increase significantly. The continuity of the bank's business may also be compromised. Therefore, the outsourcing agreement should be flexible enough to be amended to adapt to the new situations appearing during the execution of the agreement.

B. Service Level Agreement

The service level agreement is entered into by the bank that plans to outsource its business and the outsourcing service provider regarding the assessment of business performance and service quality. The purpose of such an agreement is to evaluate, monitor, and control the operational and financial risks in relation to the IT outsourcing service. A reasonable and meticulous service level agreement is an integral part of a sophisticated IT outsourcing agreement. As an internationally accepted standard to evaluate IT outsourcing service, the service level agreement is a legal document executed by the bank and the service provider and is crucial to the bank's supervision and management of the service provider.

CBRC requires that a bank considers the following factors when drafting a service level agreement: (1) whether the agreement has established qualitative and quantitative performance indicators to evaluate the service provided to the bank and relevant clients is sufficient; (2) whether the agreement appraises the performance of the service provider through the service quality report, periodical self-evaluation, and internal or independent external auditing; and (3) whether the agreement includes any steps to help the service provider to improve the procedures and performance when the service provider is unable to meet the agreed standards or indicators.

In practice, Chinese banks and their outsourcing service providers are inexperienced in formulating service level agreement. Therefore, the established terms might not suffice in protecting the interests of the parties. For example, the agreement may not include a term to protect the bank's interests where material technical errors arise during the outsourcing service provider's performance of the agreed service. In essence, both parties should exercise due care when formulating the service level agreement to ensure that the agreement is able to provide good protection to both parties.

As IT outsourcing for financial institutions in China continues to develop, relevant supervisory regulations are being updated and improved to keep up the latest development of the IT outsourcing practice of banks. Similar to the IT outsourcing of banks, the IT outsourcing of securities companies, futures companies, fund management companies, and insurance companies also involve many important legal and regulatory issues. The financial institutions engaging in IT outsourcing services shall effectively manage their outsourcing contracts to control the risks and make sure that the performance of these contracts will not compromise their responsibilities to the clients and the supervisory authority, as well as their compliance with regulatory requirements.

Videx, Inc. Locks on to Medeco Security's Alleged Infringement

Wed, 01 Sep 2010 22:51:43 GMT

Videx, Inc., a Corvalis-based manufacturer of electronic access control products, has sued lock manufacturer Medeco Security Locks, Inc., for infringement of Videx’s U.S. Patent No. D457,051, entitled “Key for Electronic Lock.” However, Videx’s Complaint is short on details and does not specifically identify the allegedly infringing Medeco product(s). Rather, Videx alleges only that Medeco has made, used, imported, offered to sell, or sold “keys" embodying the patented invention.

What does the patented design look like? According to the drawings, like this:

In case you are having trouble visualizing what this might look like in practice, as I did, photos of Videx electronic key products that appear to embody the invention can be found on the Videx website here (under the “Keys” tab).

The case, Civ. No. 10-832-ST, has been assigned to the Hon. Janice M. Stewart.

Updated KSR Examination Guidelines

jdmesq@gmail.com (J. Douglas Miller) — Wed, 01 Sep 2010 21:50:07 GMT

The USPTO has issued updated examination guidelines on the law of "obviousness". For details, see the press release here.

New York's Electronic Equipment Recycling and Reuse Act

Wed, 01 Sep 2010 18:38:28 GMT

Little covered other than by environmental and waste industry trade journals, New York's legislature earlier this year passed the NYS Electronic Equipment Recycling and Reuse Act (the “Act”), which was signed into law by Governor Paterson. The Act amended various provisions of the NY Tax Law as well as adding Article 27, Title 26, Electronic Equipment Recycling and Reuse, to New York's Environmental Conservation Law. It contains some potential surprises for manufacturers, retailers and consumers of "covered electronic equipment."The manufacturer's internet website must, in addition to any other required information, provide a listing of locations within New York where consumers may return electronic waste as part of the manufacturer's electronic waste acceptance program. Further, those for manufacturer's providing computers, hard drives and other "covered electronic equipment" containing internal memory where personal or other confidential data can be stored, the manufacturer must provide consumers with instructions for destroying such data before they surrender the product for reuse or recycling.

The bulk of the Act, effective as of April 1, 2011, serves to impose various new mandates on “manufacturers” [ECL §27-2601(11)] and ”retailers” [ECL §27-2601(16)] geared toward increasingly stringent goals for recycling of “covered electronic equipment” (“CEE”) [ECL §27-2601(5)] , as well creation of associated systems for the collection and recycling/reuse of electronic waste at no cost from consumers under NYS Department of Environmental Conversation ("DEC") oversight. To this end ECL §27-2605 requires manufactures to register with the DEC, at a one-time cost of $5,000, and supply detailed information on the sales and total weight of CEE sold by the manufacturer in New York.

Manufacturer Requirements:

The Act defines “manufacturers” broadly to include any person or entity that: "(a) assembles or substantially assembles covered electronic equipment for sale in the state; (b) manufactures covered electronic equipment under its own brand name or under any other brand name for sale in the state; (c) sells, under its own brand name, covered electronic equipment sold in the state; (d) owns a brand name that it licenses to another person for use on covered electronic equipment sold in the state; (e) imports covered electronic equipment for sale in the state; or (f) manufactures covered electronic equipment for sale in the state without affixing a brand name.” ECL §27-2601(11).

Excluded from the sweep of "manufacturer" are those persons and entities who sell “less than one thousand units of covered electronic equipment annually” in New York or “whose primary business is the sale of covered electronic equipment which is comprised primarily of rebuilt, refurbished or used components.”

The Act also imposes joint and several responsibility and liability on those that jointly manufacture a product qualifying as a CEE, noting “any such person may assume responsibility for obligations of a manufacturer of that brand under this title. If none of those persons assumes responsibility for the obligations of a manufacturer under this title, any and all such persons jointly and severally may be considered to be the responsible manufacturer of that brand for purposes of this title.” ECL §27-2601(11).

In addition, ECL §27-2605(5)(b) requires a manufacturer, as part of its required electronic waste acceptance program (“EWAP”), to provide “information on how consumers can destroy all data on any electronic waste, either through physical destruction of the hard drive or through data wiping” while ECL §27-2605(5)(c) mandates as part of the EWAP a public education program to inform consumers about the manufacturer's electronic waste acceptance program, including at a minimum:

"an internet website and a toll-free telephone number and written information included in the product manual for, or at the time of sale of, covered electronic equipment that provides sufficient information to allow a consumer of covered electronic equipment to learn how to return the covered equipment for recycling or reuse, and in the case of manufacturers of computers, hard drives and other covered electronic equipment that have internal memory on which personal or other confidential data can be stored, such website shall provide instructions for how consumers can destroy such data before surrendering the products for recycling or reuse.”

The manufacturer's internet website must also, in addition to any other required information required above, provide a listing of locations within New York where consumers may return electronic waste as part of the manufacturer's EWAP. Further, those manufacturers providing computers, hard drives and other CEE containing internal memory where personal or other confidential data can be stored, are required to give consumers instructions for how to destroy any data contained before they surrender the product for reuse or recycling.

Lastly, manufacturers must also maintain records on site to demonstrate compliance with the Act, and make them available upon request by the DEC for a period of three years. See www.dec.ny.gov/chemical/66845.html

For purposes of the Act, “personal or other confidential data” is not expressly defined in the otherwise very detailed definitions section. For example, the definition of “covered electronic equipment” under ECL §27-2601(5), includes a wide variety of equipment, notably all of the following:

computers [as further defined at ECL §27-2601(2)];
computer peripherals [as further defined at ECL §27-2601(3)];
small electronic equipment [as further defined at ECL §27-2601(19)];
small-scale servers [as further defined at ECL §27-2601(20)];
cathode ray tubes [as further defined at ECL §27-2601(1)]; and
televisions [as further defined at ECL §27-2601(21)].

The definition of "covered electronic equipment" expressly excludes a:

“motor vehicle or any part thereof; camera or video camera; portable or stationary radio; household appliances such as clothes washers, clothes dryers, refrigerators, freezers, microwave ovens, ovens, ranges or dishwashers; equipment that is functionally or physically part of a larger piece of equipment intended for use in an industrial, research and development or commercial setting; security or anti-terrorism equipment; monitoring and control instrument or system; thermostat; hand-held transceiver; telephone of any type; portable digital assistant or similar device; calculator; global positioning system (GPS) receiver or similar navigation device; a server other than a small-scale server; a cash register or retail self checkout system; a stand-alone storage product intended for use in industrial, research and development or commercial settings; commercial medical equipment that contains within it a cathode ray tube, a flat panel display or similar video display device, and is not separate from the larger piece of equipment; or other medical devices as that term is defined under the Federal Food, Drug and Cosmetic Act.”

Interestingly, as can be seen above, “telephone[s] of any type” and “portable digital assistant[s] or similar device[s]” are expressly exempted from the definition of CEE. As a result, the mandates of the Act do not apply to any PDAs, cellphones or smartphones, all of today generally can and do contain gigabytes of personal and potentially confidential data. Such devies are, however, otherwise within the scope of the New York State Wireless Recycling Act, effective January 1, 2007, whereby all wireless telephone service providers offering cell phones for sale in New York are required to accept at no charge to consumers cell phones for reuse or recycling.

Retailer Requirements:

A different section of the Act, ECL §26-2607, specifies new requirements imposed on "retailers," as defined under ECL §26-2601(16)]. As of April 1, 2011, retailers of CEE must “at the location of sale” provide buyers of CEE information “about opportunities for the return of electronic waste that has been provided to the retailer by a manufacturer.” ECL §26-2607(1).

All New York “retailers” are flat-out banned by this new section 26-2607 from the sale or offer for sale in New York of any CEE unless the “the manufacturer and the manufacturer's brands are registered with the NY Department of Environmental Conservation” as specified in ECL §27-2605. This is a significant and burdensome requirement on retailers, who have no ability to require manufacturers to conform with the new mandates of the new Title 26 of Article 27, other than as may be specified in the parties' supply contracts or purchase order terms and conditions.

In partial recognition of the onerous results that may befall retailers due to this section, the sub-section (2) provides a safe harbor of sorts where any CEE purchased by a retailer from a manufacturer who “fails to register by [] [Jan. 1, 2011], or prior to the date the manufacturer withdrew its registration or the registration was revoked by the department” may continue to be sold until 180 days after April 1, 2011 or 180 days from date the manufacturer's registration was withdrawn or revoked. Continued sales of CEE, that may not otherwise be offered for sale in New York pursuant to this section, to retailers or others outside of New York is arguably not within this ban as written. In addition, such a ban applied to non-New York parties in interstate commerce could potentially implicate dormant commerce clause issues that are beyond the scope of this posting.

Penalties:

According to the DEC, the Act “except to the extent otherwise required by law” immunizes manufacturers or the operators of any from “any responsibility or liability for any data in any form stored on electronic waste surrendered for recycling or reuse, unless such person misuses or knowingly and intentionally, or with gross negligence, discloses the data.” http://www.dec.ny.gov/chemical/66845.html

Manufacturers: However, under the Act, manufacturers that fail to comply with the data security notification requirements may receive a civil penalty of up to $1,000 for a first violation; up to $2,500 for a second violation; and up to $5,000 for the third and any following violations within a 12-month period. §71-2729(1)(c)(ii). Manufacturers are subject to a fine of $1,000 per day for any failures to submit required reports, registrations, fees or surcharges. §71-2729(1)(c)(i).

Retailers: that violate the Act may be fined up to $250 for a first offense; $500 for a second offense; and up to $1,000 for a third and any additional offense within a 12-month period. §71-2729(1)(d).

Owners/operators of a electronic waste collection site, electronic waste consolidation facility or electronic waste recycling facility are liable to $250 fines for each offense of the Act with no maximum aggregate fine. §71-2729(1)(b).

Finally, consumers who violate the provisions of the Act are subject to a civil penalty up to $100 maximum for each violation. §71-2729(1)(a).

Late-Filed Forms Update: Airband Seeks Review of FCC Denial

Wed, 01 Sep 2010 13:15:32 GMT

Last week, we posted an entry about the tough stance the FCC's Wireline Competition Bureau is taking on late-filed Universal Service Forms submitted by contributors. One of the parties whose USF appeal was denied, Airband Communications, has filed an application for review of the Bureau decision. The Commission yesterday asked for comment on the request. Comments are due September 30 and October 15.

The FCC's quick action is unusual in one sense: the deadline for petitions for reconsideration or applications for review of the Denial Order is not until September 14. Other parties to the same order may file additional petitions on the same issue.

Patent Case Transferred to District With Witnesses and Documents

david.donoghue@hklaw.com (R. David Donoghue) — Wed, 01 Sep 2010 11:11:47 GMT

MPH Techs. Oy v. Zyxel Coms. Corp., No. 10 C 684, Slip Op. (N.D. Ill. Jul. 16, 2010) (Darrah, J.).

Judge Darrah granted defendants' 28 U.S.C. § 1404(a) motion to transfer this patent case to the Northern District of California. Venue was proper in both districts. Plaintiff's choice of forum was only given slight weight because the Northern District of Illinois was not plaintiff's home forum and had only a weak connection to the case. The convenience of witnesses weighted in favor of transfer. All of defendants' employee witnesses were in the Northern District of California and, more importantly, half of the non-party witnesses were in the Northern District of California. Three of plaintiff's four witnesses were in its home country – Finland. Access to proofs is given little deference in light of wide-spread use of digital discovery, but still leaned slightly in favor of transfer because defendants' documents were largely in California.

The situs of material events was neutral because it is largely irrelevant in patent cases. The convenience of parties weighed in favor of transfer. Plaintiff's inconvenience in traveling from Finland to Chicago or to Northern California was not significantly different.

The interests of justice weighed slightly in favor of transfer because defendants' employees had a greater interest in the case than Illinois citizens did. Otherwise, the Courts were similarly capable of handling patent cases and had comparable times to resolution, with only a few months difference in each category.

Germany to Pass Privacy Law to Limit the use of Facebook when Hiring - Will Ireland Follow?

Wed, 01 Sep 2010 10:25:38 GMT

The German Government has presented a draft law governing workplace privacy. The bill includes a proposal which restricts prospective employers from viewing Facebook profiles of potential candidates and would make it illegal for them to become a Facebook friend with an applicant in order to view their private postings.

Facebook has about 10 million users in Germany and there are currently no rules in place that regulate the use by companies of Facebook data.

Under the bill, employers would still be permitted to conduct a search for publicly accessible information about prospective employees on the internet. They would also be entitled to access information on job networking sites (as opposed to purely social networking sites) such as LinkedIn.

The German Interior Minister acknowledged that some of the new regulations might be complicated to enact and stated that if an employer turns down an application from a potential employee it might be difficult to prove that the reason for doing so was on foot of the content of Facebook postings.

The penalties proposed under the bill are substantial: A rejected job applicant who proves they have been rejected for a position based on violation of the new law could take a company to court claiming damages and fines of up to €300,000 could be imposed on employers that become friends with prospective employees in order to glean personal information from their postings.

Peter Schaar, the German Commissioner for Data Protection and Freedom of Information, endorsed the proposal stating it was “a substantial improvement on the status quo in dealing with employees’ data”. That may be the case, however it is difficult to see how this new law will be enforced.

The bill will go to the German Parliament to be debated when we will see how it develops. There are no similar proposals in Ireland but it is interesting to see how other EU countries are tackling this issue - if it succeeds there will no doubt be a political will for similar protections in Ireland.

SCO gets more time to file appeal brief regarding its loss to Novell

Wed, 01 Sep 2010 07:07:00 GMT

SCO filed a motion asking for more time to file its appeal brief with the Tenth Circuit Court of Appeals. They needed 10 more days, and Novell agreed to it, so the clerk signed off on it the same day the motion was filed, and the new date for SCO to file its brief will be September 9.

SCO's argument asking for more time is interesting, because we learn that Novell asked to -- and SCO agreed they could -- attach 60 more documents to the Appendix. And Stuart Singer, who takes credit in his bio on Boies Schiller's website for representing SCO as lead counsel at this same court of appeals the last time SCO appealed, is busy with another case, working on a preliminary injunction proceeding. Well. Almost. It doesn't say the "SCO" word:

Won appellate decision from Tenth Circuit (August 2009) regarding ownership of copyrights and contract rights for the UNIX operating system.

Heh heh. They are incorrigible. Not exactly the whole story, eh? What he won was a jury trial to *determine* the ownership of UNIX and UnixWare copyrights and contract rights, but the jury at the trial said Novell retained ownership of the copyrights for UNIX and UnixWare in 1995-6, and the judge ruled that Novell had the right to waive contractual violations, so SCO lost completely, despite the Court of Appeals granting SCO that extra bite of the apple with a jury trial. Which, I must point out, reached exactly the same conclusion that the first judge had on summary judgment way back in August of 2007. Singer's bio makes it sound like SCO prevailed. No wonder Bloomberg got it so wrong today [see News Picks]. That's the trouble with fibs and spin. They detach your mind from reality. Over time, that can't be good for anybody's mental health.

Preliminary injunctions are very, very hard to win, because one of the things you have to demonstrate early in the case, meaning before you've done discovery, is that you probably will win in the end, so it's a legitimate excuse this time. But what might those extra 60 pages be, I wonder?

Summary judgment rulings issue in cable case

Tue, 31 Aug 2010 20:06:55 GMT

Belden Technologies Inc., et al. v. Superior Essex Communications LP, et al., Civ. No.08-63a-SLR, August 24, 2010.

Robinson, J. Plaintiff’s motion for summary judgment of no invalidity for anticipation is granted as to one patent and denied as to the remaining patents. Plaintiff’s infringement motion is granted in part. Defendant’s motion for summary judgment of invalidity for anticipation and obviousness is granted with respect to one patent and denied as to others. Defendant’s motion for noninfringement is granted in part and denied in part. Defendant’s motion for failure to mark is granted with respect to 6 patents and denied as to a seventh patent. Defendant’s motion for summary judgment of no willful infringement is denied without prejudice to renew.

The technology patented involves high performance data cables and methods for making such cables. The court finds compliance with the marking statute is amenable to summary judgment. Defendant’s package marking does not comply where it has not identified a factual issue with respect to inability to mark the product itself. Defendant’s motion is granted except with respect to the method patent. Defendant’s knowledge of the patents is insufficient. Plaintiff must show an affirmative communication of a specific charge of infringement. The court finds that certain claims have been infringed and plaintiff has not made the requisite showing as to others. Defendant’s motion for summary judgment is granted in part and denied in part. The parties are directed to advise the court which patents and accused products remain in suit.

K&L Gates Webinar: HUD Interpretive Rule - Are Marketing Agreements Under Siege?

Tue, 31 Aug 2010 17:17:50 GMT

K&L Gates Webinar: HUD Interpretive Rule – Are Marketing Agreements Under Siege?

Date/Time: Tuesday, September 14, 2010 at 2:00 p.m. EDT

Location: Attend via Webinar. Login directions will be distributed via email the day before the event.

RSVP: Click here to register online. Registration closes at 5:00 p.m. EDT on September 10.

As Section 8 of the Real Estate Settlement Procedures Act ("RESPA") provides an exemption for payments made by one person to another person for actual, necessary, and distinct services, mortgage lenders, homebuilders, real estate brokers, title insurance companies, and other settlement service providers have maintained marketing agreements for decades without much guidance from the U.S. Department of Housing and Urban Development ("HUD"). That all changed on June 25, 2010 when HUD issued a RESPA interpretive rule regarding the permissibility of marketing agreements between home warranty companies and real estate brokers and agents. Although the interpretive rule provided RESPA guidance in the limited circumstance of per-transaction home warranty marketing agreements, HUD's interpretation has caused settlement service providers generally to question the RESPA compliance of flat fee marketing and service agreements, as well as the permissible types of marketing services performed under these agreements.

Join us on Tuesday, September 14, 2010 from 2:00 p.m. until 3:15 p.m. Eastern Daylight Time for a webinar to learn more about HUD's interpretive rule and the effects this interpretation could have on your existing marketing agreements. Time for questions and answers will follow the webinar presentation.

Speakers Include:

Phillip L. Schulman, Partner, Washington, D.C.
Holly Spencer Bunting, Associate, Washington, D.C.

Scott Hervey Presents to Association of Corporate Counsel

info@weintraub.com (Weintraub Firm) — Tue, 31 Aug 2010 16:13:21 GMT

Weintraub partner Scott Hervey presented a program on August 19, 2010 to the Association of Corporate Counsel on boilerplate language in IP transactions.

Boilerplate - those standard legal clauses appearing at the end of the agreement. These clauses are often overlooked when reviewing an agreement because they are supposed to be "standard," and in drafting they are often cut from a previous agreement and copied into a new one. This is a mistake. Boilerplate is important and should be given as much scrutiny as the rest of the contract. Although this presentation will focus certain boilerplate language in IP transactions, most of the clauses discussed can be found in any type of transaction.

Court Construes Claims re Method of Treating Kidney Disease

david.donoghue@hklaw.com (R. David Donoghue) — Tue, 31 Aug 2010 15:05:35 GMT

Bone Care Int’l, LLC v. Pentech Pharma., Inc., No. 08 C 1083, Slip Op. (N.D. Ill. June 4, 2010) (Dow. J.)

Judge Dow construed the claims in this patent infringement action related to methods for preventing bone mass loss using vitamin D. As an initial matter, the Court held that the person of ordinary skill in the court was someone in the field of kidney disease with either a Ph.D. or an M.D., adopting plaintiffs’ construction. Defendants’ argued that both a Ph.D. and an M.D. were required, but the parties agreed that the definition did not impact their respective arguments. Of particular interest, the Court construed the following terms:

The Court declined to construe “lowering” or “lowered” because the parties did not contest that the constructions impacted claim scope, and their ordinary meanings were sufficient.
“Serum parathyroid hormone” was construed as “blood concentrations of parathyroid hormone.”
“Suffer from” was construed as “having” consistent with its ordinary meaning. The dictionary drew a distinction between suffering from and suffering with, which is associated with pain or discomfort from a condition.
“Hyperparathyroidism” was construed consistent with medical dictionaries as “increased (i.e., above normal) secretion of PTH by the parathyroid gland."
“End stage renal disease” was construed as “a disease wherein the patients’ kidneys no longer function at a level necessary to sustain life and thus require chronic dialysis or kidney transplantation.”
“Effective Amount” was construed as “an effective amount of 1a-OH-vitamin D2 to lower and maintain lowered blood concentrations of PTH with a lower incidence of hypercalcemia than is associated with the extant conventional Vitamin D3 treatments.”

US Insurance Inquiry - Possible Fallout for China?

Tue, 31 Aug 2010 09:52:33 GMT

By Yuan Min, Partner, King & Wood's Insurance Group

Recently, the Associated Press reported that the New York State Attorney General has served subpoenas on two major multi-national life insurers as part of that office's inquiry into those companies policies for paying death benefits to life insurance policyholders' beneficiaries. This news comes after Bloomberg News reported that the United States' Department of Veterans' Affairs has begun an investigation into the possibility that life insurance companies are improperly benefiting by holding onto death benefit proceeds after these should have been paid to death benefit beneficiaries.

Specifically, Bloomberg News reported that many major life insurers standard practice is for the companies not to pay a life insurance death benefit in a lump-sum. Instead, many life insurance companies are holding these cash benefits in their own investment accounts so that the companies can invest the cash and profit on their own behalf. The report comments that these companies are making significant profits for themselves while they pay the parties that are entitled to the death benefit a very low interest rate for allowing the company to use the money for its own interests. In addition, the report says that these insurers have tended to mislead these beneficiaries about how well the companies are protecting this money on the beneficiaries' behalf.

With this kind of United States Government investigation into life insurance company practices, it raises the question should life insurers working in China be concerned about a government regulatory authority investigation into their death benefit payment practices?

In general, the Chinese government tends to place a lot of emphasis on making sure policyholders understand the insurance policies they buy, and the government tends to hold insurers accountable when they fail to properly explain insurance policies to policyholders. Therefore, we tend to think the answer is yes, insurance companies should be concerned that the Chinese government may place more scrutiny on their death benefit payment practices because of the United States' government's investigation into life insurance death benefit payment practices.

We always recommend our insurance client's stay abreast on Chinese government regulatory authorities' legislative, regulatory, and enforcement activities. At present, we are not aware that the Chinese government will begin to place more scrutiny on insurers' death benefit payment practices. In turn, we believe that the best course action for insurers working in China is for them to review their death benefit claims handling procedures to make sure that they are adhere to the Chinese law's requirements for death benefit payments. This internal procedural review will help insurers in case the Chinese government does decide to place company practices under more scrutiny.

If you have any questions about what exactly the Chinese law's requirements are for death benefit payments, or any other Chinese legal compliance questions please contact us.

Calling All Inhouse Counsel: Turn on the Lights on Compensation!

Tue, 31 Aug 2010 07:08:00 GMT

Looking for in-house compensation information? LawShucks has written extensively on the topic and would like to hear from you. [via Calling All Inhouse Counsel: Turn on the Lights!] * Find an In-House Counsel Job @ GoInhouse.com *

Looking for in-house compensation information? LawShucks has written extensively on the topic and would like to hear from you.

[via Calling All Inhouse Counsel: Turn on the Lights!]

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

Why IDPPPA is going to KO the Business of Fashion

Tue, 31 Aug 2010 00:34:13 GMT

Apparel manufacturers. I am worried about the Innovative Design Protection and Piracy Act ("IDPPPA") and so should you.

Do you know that last week WWD predicted a 10-15% rise in the wholesale price of fashion products for spring 2011? Or home sales are down 27% this year and unemployment remains about 9.5%? Or that cotton costs are up 32.2% and analysts are predicting dim holiday sales?

The last thing our country, its fragile economy and the apparel industry needs is more legislation that is guaranteed to drive up the cost of fashion products. IDPPPA would do just that.

How? By giving fashion houses with fat litigation budgets the opportunity to convince judges that their designs are uniquely different from anything that has ever been made before. If you know your design history, or even have worked in the fashion business for awhile, you know how hard that standard is to meet.

But this is America and everyone is "entitled" to their day in court. Plaintiff's lawyers (working on a contingency) are creative and judges historically interpret copyright law expansively. Companies all along the supply chain would pass off the cost of litigation to the retailer purchaser. Just what the country needs right now, right?

And the harm of IDPPPA doesn't stop there. Since IDPPPA requires a plaintiff show that a defendant had "access" to the alleged copied products, designers would have to stop:

reading fashion magazines;
shopping retail stores or attending trade shows;
watching or subscribing to trend reports, or
caring about the runway shows.

If they do, designers will be prohibited from claiming that their designs are the "results of independently creation." Another hit our economy doesn't need.

So, if you want to influence the process, now is your chance! Call your congressmen and senator today.

Otherwise, you'll have no right to complain when it costs more for clothes for you and your family, or when an unscrupulous plaintiff (think of the ones we see making fabric claims) sues you.

take action now!!!