Monday, May 15, 2006

SCOTUS to Trolls: Go Home?

There is a bit of a bombshell for the patent bar on the Supreme Court's front porch today -- No doubt the folks at RIM are a bit miffed that this didn't occur about 3 months ago, but I digress...

Have Justices Kennedy, Stevens, Souter and Breyer all but given public recognition to the (so-called) patent troll industry? Read into the following whatever you might like...

In cases now arising trial courts should bear in mind that in many instances the nature of the patent being enforced and the economic function of the patent holder present considerations quite unlike earlier cases. An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees. See FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, ch. 3, pp. 38-39 (Oct. 2003), available at http://www.ftc.gov/os/2003/10/innovationrpt.pdf (as visited May 11, 2006, and available in Clerk of Court's case file). For these firms, an injunction, and the potentially serious sanctions arising from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent. See ibid. When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest. In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test.

EBAY INC. et al. v. MERCEXCHANGE, L. L. C., ___ U.S. ___ (May 15, 2006) (J. Kennedy concurrence)(emphasis added).

Saturday, May 13, 2006

8th Circuit Rules in Case Involving Digitally Enhanced Evidence

In U.S. v. Seifert, the U.S. Court of Appeals for the Eighth Circuit ruled on the admissibility of video evidence that had been digitally altered to brighten the image. The original images were very dark. An expert used software tools to brighten the entire image, which then showed a suspect who was dressed very much like the defendant.

So, fellow lawyers, add Photoshop to your list of essential software skills on your resumes.

The case is here.

Friday, May 12, 2006

No More Pesky 8x10 Enlargement Spam

No, not that kind of enlargement. Get your mind out of the gutter.

In a clear victory over the photolab spammer cadre, the FTC has once again shown us the immense value and public good that has come to us out of the CAN-SPAM Act. Kodak Imaging Network sent out an e-mail to 2 million recipients that failed to contain an opt-out mechanism, failed to disclose the right to opt-out, and failed to include a valid physical postal address. For this, they paid over $26 grand in penalties and have the watching eye of the FTC to contend with for the next few years.

So -- I have no doubt the marketer did the dastardly deed (as I gather from the rapid closure that Kodak did not dispute the facts). Take that as a lesson learned for them, as well as for the rest of us who are advising clients on how to comply with CAN-SPAM. Fair enough.

But was this what we thought we were getting when we passed a law about spam? 'Gotcha' cases against legitimate companies that make dumb mistakes as opposed to something that has a meaningful impact on the mess that flows into our inboxes every day? How many of us have spent time complaining to our loved ones about the burden of deleting great masses of photo-lab spams? Are the fake-pharmacy-spammers really going to read about this case and suddenly realize they need to alter their marketing methods to comply with the law?

If anything, this action by FTC -- if this is the best they can come up with -- seems to almost prove the ineffectiveness of CAN-SPAM to achieve its original purpose.

In any event, please be sure to tell your clients to include the opt-out and address! See 15 U.S.C. § 7704(a)(5)(A)!