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

The Federal Trade Commission has been investigating Google's practices in regard to patent licensing, search results and other matters for about two years.  The FTC sought to determine if Google's practices in these regards were anti-competitive.  The FTC ended their investigation the first week of this year and entered into an agreement with Google in exchange for the FTC agreeing not to pursue the matter further.

Part of the analysis by the FTC was a investigation into whether Google manipulated its search algorithms such that websites that competed with Google's "vertical" results (i.e. sponsored Google sites) were moved down in the search results with concomitant  damages to the click through rate to such competing sites.  The FTC found that even though "...some of Google’s rivals may have lost sales due to an improvement (sic) in Google’s product...(t)he totality of the evidence indicates that, in the main, Google adopted the design changes that the Commission investigated to improve the quality of its search results, and that any negative impact on actual or potential competitors was incidental to that purpose."  The Commission went on to say "...these changes to Google’s search algorithm could reasonably be viewed as improving the overall quality of Google’s search results because the first search page now presented the user with a greater diversity of websites."

Needless to say, not all were enamored with the FTC's actions.  Microsoft, having been kicked around by the FTC for years, bemoaned the actions as "weak".  Others found it to be totally justified.

Whatever your view, this is a win for Google and clears up their docket to proceed with their pursuit of world domination.  Not that there's anything wrong with that.

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Remember a week or so ago when we reported that Google had violated Oracle's copyrights but the jury couldn't decide on fair use so that was left to the judge.  They then proceeded to the patent phase of the suit and lo and behold, the jury has found no patent infringement by Google.  The judge has told the jury to go home.  No billions for Oracle.

Oracle is now left with having the judge decide the copyright issue on such protection for application program interfaces (APIs).

Oracle may wear the collar in this game.

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Avid followers of this blog will clearly remember our discussion of the initial filing of the lawsuit involving the clash of the Larrys (i.e. Ellison [Oracle] and Page [Google]).  For a quick refresher, Oracle claimed that Google infringed on Oracle's Java related intellectual property (which Oracle obtained by buying Sun) by, among other things, violating some patents and copying application program interfaces ("API") in the development of the Android operating system.  There has been some question as to whether APIs are subject to protection by copyright but Oracle claims that the ones in Java are sufficiently complex  that they should be protected.  A recent case in Europe has held the other way.

The jury in this case held that Google did violate Oracle's copyrights but could not reach a decision as to whether the use was "fair use", a defense under the copyright act.  Therefore, this is not very conclusive.  The case is divided into three phases and this was the end of the first phase.  The case went directly into the patent phase of the case and the subsequent phase will be the damages phase.  So, a lot of work to do until this is finally decided but it is evident that this will have far reaching effects however it comes out.

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Syracuse University once were known as the "Orangemen".  This arose from a hoax in the student newspaper about the fictional remains of an Indian chief being found during the excavation of a university building.  Because of the racist stereotype, Orangemen was eventually changed to "Orange" and the mascot now is a rotund citrus fruit known as Otto.  Now, Syracuse has moved to trademark the "Orange" .  After all, the Fifth Circuit has held that a color scheme can be part of a identifying mark if likely to cause confusion.  Other universities that embrace orange as a team color and use the term orange as part of their identifying marks and slogans have objected, including Tennessee and Auburn but surprisingly not Texas.  Maybe burnt orange is sufficiently different so as to not cause confusion.  After all, school buses, road cones, citrus fruit and pumpkins are different colors, right?

In Google's quest to rule the world, it entered into agreements with several large libraries to scan books, include "snippets" of such books in a database and allow searches of such scans.  In 2005, Google predictably was sued for copyright infringement and just as predictably raised fair use as a principal defense.  The suit was in the nature of a class action and Google had entered into a settlement of this case, which would have allowed Google to continue the scanning with the payment of certain fees.  The settlement was subject to approval by the courts but the District Court Southern District of New York said "not so fast" and rejected the settlement.  The reasons stated by the Court include that the settlement "...would grant Google significant rights to exploit entire books, without permission of the copyright owners. Indeed, the [settlement agreement] would give Google a significant advantage over competitors, rewarding it for engaging in wholesale copying of copyrighted works without permission, while releasing claims well beyond those presented in the case."

Back to the drawing board.

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SEO is, of course, the acronym for Search Engine Optimization.  It's the practice of creating web sites, links, references and other mysterious arcana to enhance the chances that a particular web site will appear on the first page of results whenever you do a search (e.g. Google, Yahoo, Bing).  It is a well respected practice and something most everybody does.  The largest search engine, Google, has a trade secret algorithm that determines how such searches are ordered.

Google has a vested interest in appearing to present the search results in a rational order.  If it appeared that the system was materially flawed or gamed, then less importance would be placed on a search by Google and they might lose market share.  For that reason, they have a set of rules by which SEO purveyors are supposed to abide.  To violate these rules is to risk having Google take steps to cause your web site to appear lower in the Google results.

This brings us to the interesting case of J.C. Penney.  The New York Times reported on Saturday that during the recent holiday season, the rankings for searches for a number of things that J.C. Penney carries (e.g. dresses, bedding, area rugs, furniture, skinny jeans) routinely returned a number one ranking.   This raised the question as to whether this would have occurred without significant manipulation of the Google algorithm.  Turns out, probably not. 

J.C. Penney apparently engaged SearchDex, a SEO firm based in Dallas.  SearchDex supposedly used suspect methods, including placing links on unrelated, obscure, underused or dormant websites that pointed back to the J.C. Penney site.  Effective, definitely.  Ethical, matter of opinion.

SearchDex lists its ethical standards on its website and also lists its response to the Google standards for SEO activities.  According the New York Times article cited above, Google believes that SearchDex and J.C. Penney have violated the Google standards.  However, none of this appears to violate any laws and J.C. Penney has filed the obligatory "We Didn't Do Nothing" response.

One of the methods is to use services like TNX, which purports to raise website traffic by placing paid links on other sites that redirect the search to the target site.  The redirecting sites agree to allow the links in exchange for payment based on the number of redirects.

So, with sponsored links, Google AdWords, Google Places, TNX and really creative SEO operators, who's to know whether the searches are credible.  And, I would like to sign up somewhere to get our name on the first page of the listings.  Oh, wait, we are (today)!  (Search "Austin Technology Attorneys")

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On September 3, Search Engine Land reported, and Google confirmed that the Texas Attorney General, Greg Abbott, inquired about and is currently investigating potential anti-trust activity by Google. It was reported Greg Abbott's office declined to answer any questions, and now everyone is just speculating on what the outcome will be. Well, I'm no better. 

This is not the first anti-trust inquiry Google has faced, and it likely won't be the last. According to Experian Hitwise, Google accounts for 71% of searches in the United States, and it's no surprise to anyone when you've got that kind of market share, you've got a lot of bulls-eyes on your back, as well as a lot of government officials making sure you don't go all anti-trusty on the rest of the market. Google has been in this position for sometime, and I'm sure I'm missing a few, but here are some of the Google antitrust highlights over the last few years:

• In April of 2007, Google purchased DoubleClick for 3.1 billion dollars and the FTC stepped in, but eventually approved the purchase, stating, "the companies are not direct competitor in any relevant antitrust market."
• In 2008, Google was looking at partnering up with Yahoo! in their highly publicized ad deal, however, Google eventually pulls out because of looming antitrust issues.
• In February 2009, Tradecomet.com filed an antitrust suit against Google, however, they were not to be the last. 
• As time progressed, British price comparison site Foundem and myTriggers also become involved in US filings of anti-trust suits.
• In July 2010 it was reported, Foundem, French legal search engine ejustice.fr, and Microsoft service Ciao from Bing filed European anti-trust suits, eventually leading to ongoing EU Commission investigations.
• Most recently, a week ago there were reports of the Texas Attorney General anti-trust investigation.

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Recently, Paul Allen (co-founder of Microsoft and worth roughly the GDP of Jamaica) filed a patent infringement lawsuit against most of Silicon Valley.  The Defendant's list reads like a who's who of modern technology giants:  Apple, Google, Facebook, eBay, AOL, Netflix, Yahoo, Office Depot, Office Max, Staples, You Tube (not listed: Microsoft).

The patents at issue extend back to the late 90s when Allen's now defunct company, Interval Research, was granted a number of patents dealing with e-commerce and search process.  In fact, it was so long ago that Google wasn't even in existence when some of the patents were applied for. This is obviously a big deal for Silicon Valley companies as they struggle to work within the current patent system.  The sheer number of defendants and the issues at stake has lead some to surmise that this could be the tipping point for software patents as a whole.  Earlier this year, many were guessing/hoping that software patents would finally be invalidated in by the Supreme Court in the recent case, In Re Bilski, but that didn't happen.  Obviously, an entire industry cannot constantly be fighting out their innovations in the court room because in the long run, it only ends up hurting consumers and stifling progress.  So we'll see if this is actually a turning point in our current patent system or just another addition to our patent thicket.  Stay tuned. 

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Normally, we here at ATLB try and bring you legal issues relevant to the Austin tech world, but I recently stumbled across and my first interactive, multi-window HTML5 video, and despite the lack of legal issues, I had an overwhelming desire to share it. Showcased as a "Chrome Experience,"  Google and Chris Milk teamed up with the band Arcade Fire to produce an extremely creative music video to the song, "We used to wait" (a great track). The site, The Wilderness Downtown, provides a look into the future of not just music videos, but a videos across the board. An interactive multi-window experience allows the user to connect with the music, the story of the video, and provides some serious nostalgia for someone who hasn't been home in awhile (my then teary-eyed girlfriend can attest to that). 

I look forward to the next generation of videos and the creative music and film directors that will no doubt utilize this new format. I can already hear myself 6 months from now, "I can't believe I was so amazed by that Arcade Fire video."

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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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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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Google's much anticipated operating system, Chrome OS, will finally be revealed at the Computex Taipei show early next month.  Reportedly, Acer will launch netbooks equipped with Chrome OS.  Via venturebeat.com:

It’s still unclear how Chrome OS-equipped netbooks will coexist with those running Google’s Android mobile operating system. We’ve known that Android netbooks would begin popping up this year since early 2009, and even Acer announced its intention to sell them.

This comes one day after Verizon CEO, Lowell McAdam, announced they were working with Google to create an Android-based tablet to rival Apple's iPad.

Update:  Acer has now denied the reports that they will be introducing netbooks running Chrome OS at Computex so we will have to wait a little longer to see the operating system in action.  In the meantime, here are some screenshots of what it might look like.

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Google's tough luck with the Nexus One continued last week.  After reports of disappointing sales in the smartphone, Google learned that its trademark for Nexus One was denied by the USPTO. The mark was denied because of a "likelihood of confusion" with a previously registered mark. The mark at issue was Nexus owned by Integra Telecom Holdings, Inc., which used the mark to provide telecommunication services in the oil industry.  Google has a right to appeal the decision or seek out an agreement with Integra.

You should conduct a thorough search in your potential name.  Otherwise, you will invest a ton of time and money in a trademark and not even be able to use it. 

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