Laws of .com

Volume VII, Issue 19: December 17, 2009

Apple Faces Patent Infringement Suit over iPhone

Apple Answers Nokia with own Smartphone Patent Claims

Single European Patent Looming on the Horizon

Canadian Recording Industry Faces Copyright Infringement Class Action

Canadian Copyright Law to Trump ACTA

Apple and Psystar Reach Agreement over Copyright Dispute

eBay and Craigslist Fight in Court to Resolve Shareholder Issues

Privacy Complaint of Transit Driver Regarding the Collection of Information Rejected

Apple Faces Patent Infringement Suit over iPhone

Apple, Inc., the manufacturer of the popular iPhone, is currently facing a lawsuit for patent infringement relating to its use of certain digital camera technology. On October 26, 2009, St. Clair Intellectual Property Consultants (SCIPC) filed a complaint in the U.S. District Court for the District of Delaware alleging that Apple infringed four of its patents. The patents were originally issued to a company named Personal Computer Cameras, Inc., which then sold the technology to SCIPC for less than $100,000 between 1995 to 2001. Three of the patents are entitled “Electronic Still Video Camera with Direct Personal Computer (PC) Compatible Digital Formal Output,” while the fourth patent is entitled “Process for Use in Electronic Camera.”

SCIPC has a history of filing patent infringement complaints against manufacturers using digital camera technology. In 2001 SCIPC sued Sony and won $25M in damages. Later, it sued Canon and Fuji Film and collected $34.7M and $3M in damages, respectively. Meanwhile, other companies, including LG, Motorola and Sanyo, have opted to negotiate licensing terms with SCIPC.

It is still uncertain whether Apple will settle or go to trial.

For additional information, visit:
http://www.macworld.com/article/144771/2009/12/iphone_camera_suit.html

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Apple Answers Nokia with own Smartphone Patent Claims

As expected (see Laws of .Com, Vol VII, Issue 16), on December 11, 2009, Apple, Inc. answered Nokia Corporation’s complaint in the U.S. District Court for the District of Delaware (Nokia Corp. v. Apple Inc. , 09cv791, U.S. District Court, District of Delaware (Wilmington)) with its own claims that Nokia is infringing 13 of Apple’s patents related to smart phone technology, and denying its own infringement of Nokia’s patents.

The originating Nokia complaint and corresponding press release provides that Nokia’s patents are offered on fair, reasonable and non-discriminatory terms (or in some cases reasonable and non-discriminatory terms, F/RAND terms), as such Apple can avoid injunctive relief by agreeing to the F/RAND terms. However, Apple does not appear to be prepared to grant licenses to its technology on a similar basis. In its press release, Apple’s General Counsel, Bruce Sewell, states, “[o]ther companies must compete with us by inventing their own technologies, not just by stealing ours.”

The argument alluded to in the court and press documents is whether an innovator which benefits from a set of community standards is required to contribute its innovation back to that community as a condition of entry. In the backdrop to both suits is the rise of market share for Apple’s iPhone in the lucrative smart phone market, while Nokia’s share has fallen.

For the Apple Press Release, visit:
http://www.apple.com/pr/library/2009/12/11countersue.html

For additional information, visit:
http://www.businessweek.com/technology/content/dec2009/tc20091212_551557.htm
http://tinyurl.com/y8mjplz

For a copy of Nokia’s complaint (without exhibits), visit:
http://www.heydary.com/internet-laws/Nokia%27s-Claim.pdf

For Apple’s answer to Nokia’s claim, visit:
http://www.heydary.com/internet-laws/Apple-Answer.pdf

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Single European Patent Looming on the Horizon

European Union member states have agreed on the main elements for a unified European patent, including the rudimentary makings of a unified European patent court. While proponents herald this agreement, others lament that the biggest obstacle to the scheme, the cost for translations, remains unresolved.

For additional information, visit:
http://news.zdnet.co.uk/emergingtech/0,1000000183,39926436,00.htm?tag=mncol;txt
http://news.cnet.com/8301-1001_3-10411174-92.html

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Canadian Recording Industry Faces Copyright Infringement Class Action

The primary members of the Canadian Recording Industry Association (CRIA) are facing a class action brought by artists seeking damages for a failure on the part of record labels to obtain licenses to use copyrighted works. These companies have compiled lists of works called “pending lists”, which list titles included on recordings sold by them, but for which permission has not yet been sought or paid for. Ostensibly, the pending lists are for works that may be in the public domain, or for works where the artist is difficult or impossible to locate. However, many artists listed are very popular household names (i.e. Bruce Springsteen).

The class action is seeking statutory damages for each particular act of infringement. Based on the size of the list (over 300,000 works) and potential statutory damages of $20,000 per infringement, the record labels named in the suit face a potential award in excess of $6 billion. Ironically, the record labels often seek to use the statutory damage provision of the Copyright Act to sue illegal file sharers for millions of dollars. The class action suit seeks aggravated damages against the labels for their aggressive enforcement of their copyright interests against members of the public.

For additional information, visit:
http://tinyurl.com/ybm6pzv

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Canadian Copyright Law to Trump ACTA

The proposed Anti-Counterfeiting Trade Agreement (ACTA), currently being negotiated largely in private between a number of countries including members of the European Union, Canada, the United States, and Australia, has been the subject of strong criticisms. Among the many criticisms is the proposed “three strikes and you’re out policy”, whereby individuals could lose their Internet access for a certain period of time if they are accused three times of illegally sharing copyrighted content, such as music or movies.

Critics in Canada have claimed that the secret ACTA negotiations demonstrate that the Canadian government’s recent copyright consultations with the public are “a total sham”, and that the implementation of ACTA will prevent Canada from being able to establish an independent copyright policy. However, Industry Minister Tony Clement has stated that Canada will not lose its copyright sovereignty to ACTA, as ACTA would be “subservient” to any copyright rules that are created domestically.

For additional information, visit:
http://tinyurl.com/ycofr6t

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Apple and Psystar Reach Agreement over Copyright Dispute

Apple, Inc. has partially settled a copyright lawsuit with Psystar Corp., a maker of Intel-based Mac clone computers pre-installed with the Macintosh operating system (Mac OS X).  While the full details of the proposed settlement are not yet available, the deal apparently allows Psystar to continue selling generic PCs.  However, customers will have to obtain and install MAC OS X on their own.  Psystar would also have to pay Apple an unspecified amount in damages for copyright infringement.  In return, Apple will dismiss all trade-mark, trade dress and state law claims against Psystar.

This news comes after a U.S. District Court judge recently decided on many key issues in the case and ruled in favour of Apple, stating that “Psystar’s use of Mac OS X has been in excess and has violated Apple’s copyrights.” 

For additional information, visit:
http://tinyurl.com/ybf8stm

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eBay and Craigslist Fight in Court to Resolve Shareholder Issues

Goliath on Goliath? “Old Internet” money v. “New Internet” money? Take your pick. The trial of a much delayed suit by online auction giant eBay against online classifieds giant Craigslist, Inc. and some of its board members has commenced in a Delaware court. In its April 2008 suit, eBay alleges Craigslist took steps to unfairly dilute eBay’s minority shareholder interest. eBay claimed that founder Craig Newmark and Chief Executive James Buckmaster hatched a "coercive plan" in 2007 and conducted "clandestine transactions" that diluted eBay's stake to 24.85 percent from 28.4 percent. The trial is expected to bring to light the business dealings of the two very different Internet giants.

Craigslist has counterclaimed that eBay misused confidential information to help develop the competing Kijiji service.

For additional information, visit:
http://tinyurl.com/ygtl87g
http://abcnews.go.com/Business/wireStory?id=9353044
http://tinyurl.com/ycoqp9h

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Privacy Complaint of Transit Driver Regarding the Collection of Information Rejected

The Office of the Privacy Commissioner of Canada recently rejected a complaint from a driver providing transportation services to mobility-impaired residents of a city. The driver argued that the technology installed on the vehicles he drove was improperly collecting his personal information and improperly collecting clients’ personal information.

The driver alleged that because the respondent municipality had installed a mobile data terminal (“MDT”) and a global positioning system (“GPS”), the technology was being used “to keep track of his time throughout the day; to make sure he does not take a break or lunch; to time every pick-up and drop-off; and to track his route and travel time.” He also argued that clients’ rights were being infringed because the technology displayed their names, addresses and destinations. The respondent, on the other hand, contended that the MDT system aids drivers and dispatchers as to when pick-ups and drop-offs have been completed, while the GPS technology allows vehicles to be tracked for emergency purposes, as well as to track route scheduling and service adjustments. Specifically, they argued that the purpose for using MDT/GPS is to increase efficiency and quality of service.

The Assistant Commissioner concluded that the complaint was not well-founded. It was found that, “[t]he use of technology to collect, use or disclose personal information may be an acceptable practice as long as it does not contravene any principles of the Act.” In this situation it was reasonable for the municipality to assume it had consent from the drivers because all of the drivers were advised in advance that this technology was going to be implemented. In addition the “personal information” collected was not sensitive and the municipality had a legitimate interest in collecting it in order to efficiently deliver its services. Overall, the Assistant Commissioner found that the measure was demonstrably necessary to meet the specific need and it was effective in meeting that need; the loss of privacy was proportional to the benefit gained; and that there was no less privacy-invasive way of achieving the same end.

For a copy of the decision, visit:
http://www.priv.gc.ca/cf-dc/2009/2009_011_0527_e.cfm

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