Austin Technology Law Blog : Texas Technology Lawyers & Attorneys for Copyright, Trademarks & Software Licensing in Houston, Dallas & Austin TX

After a ruling last month by the Library of Congress that jailbreaking cellphones, such as Apple's iPhone, was an exception to the DMCA, many users who didn't want to be tied to Apple's network and app restrictions rejoiced.  However, that freedom could be short lived.  A recently published patent application by Apple describes a system that seeks to identify "hacking, jailbreaking, unlocking, or removal of a SIM card."  According to the application, Apple could combat this by remotely examining for unauthorized use.  Some the measures Apple could take include:

• keylogs
• screenshots
• deleting "sensitive data" (yikes!)
• surreptitiously activating the cell phone's camera (double yikes!)

The purpose of this system is to protect consumers from "unauthorized users."  It's possible that Apple will consider users of jailbroken phones "unauthorized" based on this statement from the application describing the system:

An activity that can detect an unauthorized user can be any action that may indicate the electronic device is being tampered with by being, for example, hacked, jailbroken, or unlocked.

It's unclear whether Apple will ever actually implement these measures, but the Orwellian methods of detecting unauthorized use is a little disconcerting to say the least. 

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Consider this abbreviated time line:

November 5, 2007 - Google, T-Mobile, HTC, Qualcomm and Motorola announce the release of Android and announce the creation of The Open Handset Alliance comprised of 34 companies that will free the mobile world of all restrictions (the last part is made up).  Nowhere in the announcement does Java get mentioned.

Same day (almost like they knew it was coming) - The Chairman and CEO of Sun (possessor of Java) heartily congratulates Google et al on the release of Android and hails the salutary effect it will have on the Java community.  The blog entry goes out of its way to call Android a "Java/Linux phone platform" and "a Java based platform".

April 20, 2009 - Oracle buys Sun.  In the press release announcing the sale, Oracle calls Java "the most important software Oracle has every acquired."

 August 12, 2010 - Oracle files suit against Google alleging "In developing Android, Google knowingly, directly and repeatedly infringed Oracle's Java-related intellectual property. This lawsuit seeks appropriate remedies for their infringement."

Now what happens?  Google will claim that they aren't using Java but built their own version of this platform called Dalvik using approved clean room methods and therefore haven't infringed on anything.  Google hasn't filed an answer yet and probably won't for some time.  Then the fun will start.  This has the potential to be a very visible and influential suit with ramifications for years to come.  Google is not likely to be the last company with Defendant after their name in this matter.  There are millions and millions of devices with Android running on them.  Plus it involves some heavyweights.

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So now you've chosen your entity, it's been incorporated, you have startup capital and are up and running, you've spent thousands of dollars in creating a logo, branding, and marketing.  Things are going great, and then one day you are hit with a cease and desist letter stating that you are infringing on another company's trademark because the name you are using is confusingly similar to the other company's name.  Now you are not only in danger of being sued, but you've just wasted thousands of dollars and many months of hard work on a name and brand you can't even use.  This is just one illustration of how important it is to assess as early as possible the intellectual property (IP) landscape of your company.  Three questions every new business owner should ask: "What IP does my company have?", "How do I protect that IP?" "Am I in danger of infringing the IP rights of another?"  This post will give a summary of the main types of intellectual property, how to protect IP, and how to avoid infringement.  This is just a summary and is no means comprehensive.  Every new business owner should consult with an attorney about their IP issues.

The four main types of IP: 1)Trademarks 2)Copyrights 3) Patents and 4)Trade Secrets. 

TRADEMARK LAW

Trademarks allow a company to easily distinguish itself in the marketplace in the minds of consumers.  A well known trademark is often one of a company's biggest assets.  Trademark law gives a company the exclusive right to use a distinctive mark used to identify its goods or services.  It allows for a company to develop a brand in the marketplace without fear that another company will cause a "likelihood of confusion" by using a similar mark.  Trademarks do have "common law" protection under federal law and the law of most states; meaning that you do not have to register to have protection.  But registering your distinctive mark at the federal and state level provides a number of benefits.  Registering serves as constructive notice that your mark is in use, it makes it easier to prove your case in court, and it gives you protection in a far greater area.  Prior to registration, the mark should be followed by "TM" for trademarks and "SM" for service marks.

Not all names are available for trademark protection.  The mark must be sufficiently distinctive.  The level of distinctiveness depends on the context it is used.  Generic or common terms are not protectable if they are used in the area they describe.  For example, "Apple" is protectable when used with computers, but would not be protected if the company sold fruit.  Marks can't be overly descriptive either.  For example, "Eye-Care Center" would not be protectable for an optometrist's office.  Suggestive marks have a better chance of obtaining protection, but are not perfect because they could be seen as too generic/descriptive.  For example, "America Online" is suggestive of the services it provides.  The best choice for a protectable mark would be an arbitrary or fanciful term.  (Think "Yahoo!" and "Google")  It should be noted generic or descriptive marks can become protectable through their use. A mark can obtain "secondary meaning" through its extensive and continuous use in commerce to such an extent that it has achieved the required level of distinctiveness. 

Picking a distinctive mark is just half the battle.  You must also ensure that you are not using a mark that infringes another company's rights.  The basic test the courts use when determining if a mark is infringing is "likelihood of confusion" in the minds of consumers.  There are thirteen factors courts consider when determining likelihood of confusion.  (Known as the "DuPont Factors")  You should search extensively for similar marks on the USPTO website  and consult with an attorney before deciding on your mark.

COPYRIGHT LAW

Copyright law protects original works of authorship fixed in a tangible medium of expression.  Obviously, this includes many areas: literary works, musical works, dramatic works, photos, paintings, sculptures, architectural works to name a few.    Business that don't produce these types of works should still consider whether they have copyrightable material.  Marketing materials, training materials, or other works that the business creates during its operations could potentially be copyrightable.

Anytime a business contracts to create something new it should consider the copyright involved.  Just because someone creates something for a business doesn't necessarily mean the business own it.  This is a common issue in "works for hire" cases, and every company should address ownership of the copyright when contracting for works made for hire. 

Similar to trademarks, copyrights can be registered, but they do not have to be.  Copyright protection exists from the moment of creation.  But like trademarks, there are a number of benefits from registration.  It is much easier to prove infringement if the copyright is registered, there are substantial statutory damages as well attorney fees available to the registered copyright holder.  Copyrights are relatively easy to register compared to patents and trademarks, but registration can be deceptive in its simplicity.  Consulting with an attorney is recommended. 

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In the highly anticipated decision, Bilski v. Kappos, the Supreme Court affirmed the rejection of a specific business method patent, but left the door wide open on the validity of thousands of similar patents.  In what has become typical for decisions under the Roberts Court, the majority opinion was narrowly defined.  The court ruled only on the specifics of the case while failing to provide much guidance for similar patents. 

Watching the case intently were both sides of the patent divide. Of course, large sectors of the economy depend on patent rights for growth and innovation, and many feel that more patent rights further innovation. However, there exists a large segment of the business community, including many in the tech industry, who were hoping the court would take this opportunity to put an end to controversial business method patents (and software patents) by applying the "machine or transformation" test adopted by the Federal Circuit.  The test requires any patent to either: 1) be tied to a particular machine devised to carry out a process in a non-conventional, non-trivial way, or 2) transform an article from one thing or state to another.  Abstract ideas like business methods would not satisfy the test. 

At issue in Bilski was a rejected business method patent for a system to hedge on energy prices using weather projections.  And while the court rejected this particular patent, it went out of its way to state that it was a narrowly defined decision, and the machine or transformation test is only "useful and important clue," but should not be the sole test.  Many justices on the court expressed doubt about the validity of business method patents, but a majority of them were not ready to categorically exclude them from patentability.  The result is that thousands of business method patents and software patents remain valid, but future litigation will be needed to determine which ones.  So the lesson as always: nobody really wins except the lawyers. 

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In an effort to spur more green technology innovation and business development, the USPTO has decided to alter the application process for green technology related patents.  The initiative is a part Green Technology Pilot Program that allows a fast-track process for patents relating to green technology.  Under the pilot program, inventions related to green technology include:

• discoveries related to renewable energy
• more efficient use of energy resources
• a reduction in greenhouse gas emissions

The average review time for green technology patents is 30 months.  The USPTO hopes to shorten that time frame and examine over 3,000 patents in the first year.  So far, under the Green Technology Pilot Program there have been over 950 requests for accelerated review and only 342 requests granted.  These new rules are aimed to alleviate that problem. 

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Ina Fried, from CNET.com, reported this week that Microsoft filed a patent infringement case against SalesForce.com. SalesForce.com is, among other things, a customer relations management (CRM) software company that provides its product through the cloud. Microsoft is no stranger to patent lawsuits. In fact, they were just ordered to pay $200 Million to Virnet X in a patent infringement lawsuit regarding VPN technology. However, the peculiar thing about the lawsuit filed against SalesForce.com was that it was Microsoft doing the suing. Microsoft has only filed 4 suits against competitors. Most infringement issues involving Microsoft commonly end up in some type of license agreement with the alleged infringer. (See HTC) From this Microsoft receives damages and then licenses their technology to the competitor. However, there appears to be more uncertainty surrounding this case.

It is no secret Microsoft is one of the more established players in the IT world. However, Microsoft, along with everyone else has been losing ground to Google. Microsoft and Google are competitors in e-mail (Gmail/Hotmail), browsers (chrome/IE), search engines (Bing/Google), electronic documents (Office/Google docs), and soon in operating systems (Windows/Chrome OS). Microsoft is attempting to chase Google into the cloud computing realm, as evidenced by the direction Office 2010 and other products are trending. The lawsuit against Salesforce.com might be just another way to gain ground. One of the benefits of being in the game as long as Microsoft has is that they have ownership to some of the foundational technology we all use today. Take a look at the subject matter referenced in these patents:

Ø       7,251,653: Method and system for mapping between logical data and physical data

Ø       5,742,768: System and method for providing and displaying a web page having an embedded menu

Ø       5,644,737: Method and system for stacking toolbars in a computer display

Ø       6,263,352: Automated web site creation using template driven generation of active server page applications

Ø       6,542,164: Timing and velocity control for displaying graphical information

Ø       6,281,879: Timing and velocity control for displaying graphical information (the 164 patent above looks to just be a continuation of this patent)

Ø       5,845,077: Method and system for identifying and obtaining computer software from a remote computer

Ø       5,941,947: System and method for controlling access to data entities in a computer network

All of these patent subjects are associated with cloud computing factors. This is no surprise since Salesforce.com is run from the cloud, but it does question what Microsoft will do next? Will they pursue other companies that infringe on the broad patents? Are they trying to get enforcement out of their patents before the Supreme Court returns an opinion on In re Bilski? Are they just trying to get another license agreement?

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For a good analysis and roundup of the ongoing patent litigation war occurring in the smartphone industry check out this Wired article.

What has for years been a who will-blink-first Mexican stand-off between the tech giants has turned into an all-out gunfight, albeit one conducted by the toughest corporate lawyers money can buy. "Everybody started suing each other a lot more -- not only in telecoms, but in software and a number of other fields -- starting in the mid- to late-90s," says Jim Bessen, a law lecturer at Boston University. "The number of lawsuits filed in the US has tripled since the early-90s." Other than the spat between Apple and Nokia, over the past couple of years several other high-profile companies have become lawyered up.  

The current spat of litigation highlights the problems with the current international patent system and the need for significant reform.

The fight between Apple and Nokia is emblematic of a broader malaise sweeping the tech and communications industries as companies use their patents not for innovation, but to hobble their rivals. Some of the world's most forward looking businesses are now litigators as well as innovators.

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