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Computer Law Fall 2000 Professor Charles Kennedy Outline by Christopher S. Lee 1) Intellectual Property Protection 2) Electronic Privacy & Data Protection 3) Antitrust & E-Commerce Class
Review Session 1) Issue
Spotting more important than Right Answer 2) Right
answer may not be clear Intellectual Property Protection 1) Do not make assumptions 2) Review the following Possibilities a. Patent b. Copyright c. Trade Secret 3) Identify which applies Copyright 1) Informal 2) Exists upon creation 3) In a tangible medium of expression 4) Exclusive Right 5) Violation may permit lawsuit 6) D may claim fair use – See 4 elements a. Original Work of Authorship b. Modicum of Originality c. No application to mere ideas, expression, Patent 1) Formal 2) Requires Filing 3) Ask for filing document 4) If no filing document, there is no patent Trade Secret 1) Valuable 2) Partly because secret from competitors 3) People agree to non-disclosure 4) Suit based on tort & K 5) Innocent 3rd party may not be sued 6) Elements (Hornbook) a. Commercially valuable information based on secrecy b. Reasonable steps to preserve the secrecy of the information c. D must have agreed to keep the information confidential, or acquired through wrongful means; and d. D disclosed or used information in a manner inequitable to the P. 7) Protects information that is kept secret against persons engaged in wrongful conduct. 8) Advantage – Enforceable rights not protected by C/R or Patent 9) Disadvantage – Easy to lose secrecy shield Protection Issue 1) Can it be protected? 2) Is it appropriate for C/R/Patent/T/S protection? Exam 1) Look
for Non-Literal Elements 2) User
Interface or Dependent Programming See Cases 1) Engineering Dynamics 2) Whelan
v. Janslow 3) Paperback Software Court Considerations 1) Factual 2) External Factors 3) Merger of Ideas Computer Associates Case 1) Abstraction
– Filtration – Comparison Doctrine 2) Copied way program works, but not the literal code 3) Process a. Abstraction – Actual piece of program protected b. Filtration i. Elements in program not protected in C/R ii. Filter out facts iii. Engineering Dynamics – Facts v. Expression of Facts iv. Templates, Processes or Methods – H Shift Pattern, Mechanism/Method v. Merger with idea of program – L-Shaped spread sheet c. Comparison i. Are the programs substantially similar? – Jury issue ii. D will likely use the Fair Use Doctrine iii. Reverse Engineering Defense 1. Examination of a finished product to determine who the product is made. 2. Some fair use situations are permitted. 3. Sega
v. Accolade iv. Clean Rooms – Theory: If no software programmers had access to original, may pass as individually created program v. Elements 1. C/R 2. Substantial Similarity 3. Access to Original Work Electronic Privacy & Data Protection 1) Consider a. Patent b. C/R c. Trade Secret 2) State Street Bank – Permits C/R of Software 3) Constitution 4) Statutes 5) International Statutes – European Union 6) Right of Privacy a. Informational Right of Privacy b. Whelan Case c. In right case, privacy may be violated 7) 4th Amendment a. Katz – Did person have reasonable expectancy of privacy? b. Standards i. Subjective ii. Objective iii. Reasonable 8) ECPA – Will be on Exam; See Hornbook 9) Peculiarities a. Some stored data protected – voice, data b. Some stored data not protected – e-mail 10) Aural a. Must prove reasonable expectation of privacy b. Cell phone use in crowded bar i. Recording device on wall – Legal ii. Recording device on cell phone – Illegal without intercept order c. Exclusionary Rule i. 1 Party Consent – Most states ii. 2 Party Consent – Minority of states (MD) 11) Computer Fraud & Abuse Act (CFAA) a. Protects from hacking any computer in IC, any info. b. Criticized because vague. Bad law c. Data Mining Protection 12) ECPA Title 2 – Stored Communications protected Antitrust 1) Identify proper analysis 2) Elements a. Identify total market b. Principle competitors c. Principle substitutes d. Monopolization – Entitled to compete e. Predatory Practices i. Actions designed to maintain market power ii. Ordinary Competition v. Pressuring Market iii. Monopolies are entitled to vigorously compete f. Leveraging g. Product Tying i. Predatory Activity ii. Are products separate? h. Relevant Market i. Market Power j. Structure of Market k. Demand Substitutability i. Sophistication of Customer Base ii. Is customer likely to react by going to competitor? iii. Is demand elasticity likely to hold customer? l. Supply Substitutability – Competition limited to share of market owned i. Short term ability of suppliers to enter market ii. Long term ability of suppliers to enter market 3) Licensing & K a. Mass Market b. Unconscionbility Class
Preview Intellectual Property Protection 1) Initially C/R protection used a. No requirement to register b. Statute protected with C/R c. But if independently created – no C/R protection d. Cannot C/R Idea, procedures, processes, scientific discovers e. May C/R Expression 2) Patent a. Heavy formalities b. Non-obvious c. Must improve on Prior Art d. Cannot Patent: i. Natural Phenomenon ii. Scientific principle iii. Mathematical equations e. Allows for a type of monopoly f. S/W by itself cannot be patented i. May patent computer program process 3) Trade Secrets a. State Law b. Must be an advantage over competition c. P must take reasonable steps to protect secrets d. Sue D who agreed to abide by T/S or stole through unlawful means Electronic Privacy 1) Constitution a. Implied right to privacy b. 4th Amendment – Protection against unreasonable search and seizure c. Private parties cannot violate Constitution d. Only Government can violate Constitution 2) Statutes a. Patchwork of Acts i. 1974 Privacy Act ii. Fair Credit Reporting Act iii. Financial Privacy Act iv. Electronic Communications Privacy Act – ECPA v. Children’s Online Protection Privacy Act – COPPA vi. Computer Fraud & Abuse Act (CFAA) vii. CALEA – Easier for Gov’t to wiretap viii. Carnivore – Gov’t interception of private e-mail 3) Common Law a. Trespass to Chattels – Reduce value of person’s personal property (leaking air out of person’s tires) b. Junk e-mail – Trespass to Chattels P argument; Property Law issues c. Data Mining d. Cookies possibly hacking? Antitrust & E-Commerce 1) Enforcement of a. Click-Wrap b. Shrink-Wrap Licenses 2) Minimum Contacts Issue Copyright From the Hornbook 1) Copyright is the exclusive right of an author or other copyright owner to copy, distribute, perform or display work (17 USC 106) 2) Copyright is not lost when information becomes public. 3) Issue: Whether particular expressive elements of computer programs may be copyrighted at all? 4) Protects original works of authorship in any tangible medium of expression. 5) CONTU – Congress’s intent to include S/W as C/R material 6) Machines can be patented but not C/R 7) O/S and non-literal elements enjoy C/R protection 8) Challenge: Allegedly infringing programs containing small parts of coded instructions from the original work; or mimicking elements without copying the original instructions literally. 9) Merger Doctrine – Some expressive elements are copied by the user to make the idea function properly. (ex: Henry VIII) 10) Scene a Faire Doctrine – A scene that must be done 11) A/F/C – Modern Audience Test a. Clean Room Defense not supported by CT. b. Reverse Engineering Defense may be recognized - Examination of a finished product to determine how the product is made. 12) The fact that the copy is only an intermediate step in the creation of a noninfringing program does not make the copying per se lawful 13) Fair Use Defense a. Purpose and Character of use – Commercial v. Educational b. Nature of the work c. Amount and Substantiality d. Effect on the market 14) Stimulate artistic creativity for the public good 15) Largely functional works are entitled to only weak C/R protection 16) Object code may be disassembled and an intermediate copy made for the purpose of understanding the unprotected ideas and processes in a copyrighted work. 17) Fair use reproductions of a computer program must not exceed what is necessary to understand the unprotected elements of the work. 18) Digital Millennium Copyright Act (DMCA) a. Limits ISP’s liability on C/R Infringement b. Creates “safe harbors” for ISP’s i. Storage and Information Location ii. Caching iii. Transmission and Routing c. No obligation to monitor or access 1) Light on formalities 2) Reduce work to “fixed medium of protection” 3) Registration not required 4) No C/R Examiners (as opposed to Patent Examiners) 5) Constitution a. Article I, Section VIII b. Sets policy for C/R & Patents c. Purpose – “to promote the progress of science and the useful arts” d. Rewarding inventor is not the purpose 6) “certain time” – time limit on C/R & Patent 7) Limits on C/R & Patent - Cannot C/R mere idea, even if first person to write it 8) Spectrum a. Authors & Writing b. Inventors & Discoveries c. Const. gives Congress broad powers to pass such laws d. No requirement to pass statute e. Almost exclusively Federal Issue Proving C/R Infringement 1) Own C/R 2) Saw or direct evidence of C/R a. D had access to C/R & works are similar – “substantial similarity” b. Audience Test – Show work to jury 3) 70’s – 80’s – Issue of C/R-ability of S/W 4) Section 102(a) – Original Works of Authorship a. Work of Authorship – Human b. Fixed & Tangible medium – Choreography? c. “Fixed” d. “Includes” – Not limited to e. S/W is not mentioned, but a computer program is defined 5) Section 102(b) – Not C/R a. Ideas – Cannot C/R idea or way expressed b. Procedures c. Processes d. Systems e. Method f. Concepts g. Principles h. Laws of Nature Apple
Computer v. Franklin 1) Sound decision 2) Cites Data Processing, No. IL case stating cannot C/R ROM’s 3) Facts a. Franklin makes Apple Clones b. Admits copying code c. Defense – cannot C/R code; O/S 4) District Court a. Messy decision b. Balancing of hardships 5) Appeals Court – 3rd Circuit a. S/W is an expression b. ROM is a fixed medium c. Issue 1 – Can you C/R object code? i. Franklin case – may only C/R human readable material ii. Copyright Act of 1976 supersedes decision – can C/R even if translated “direct or indirect” use in computer iii. Congress’s intention was to permit C/R of programs iv. CONTU – Committee on New Technology Uses 1. Express approval to C/R programs 2. Backup copies for archive purposes permitted 3. Making copies to run program permitted 4. Suggests S/W can be C/R’ed 5. Goes to definition of literary work 6. Includes expression of work in #’s or any other indicia d. Issue 2 – ROM Chip S/W i. TC – only medium of fixation ii. “Gotcha” argument – fails iii. Has not be used since iv. C/R Analysis - See Cases 1. Whelan
v. Janslow 2. Computer Associates e. Holding: Cannot copy code word-for-word 6) Problem a. Possible to imitate with infringing b. J. Learned Hand – Case on script for play – same plot i. At what point does C/R infringement occur? ii. Must decide at each case c. Hierarchy of Abstractions d. Audience Test Value of Software 1) Describe how it works 2) Explain what you are trying to protect 3) Elements a. Modules b. Sub-modules c. Control Flow – Sequence of Interaction d. Data Flow e. Data Sets – Data f. Algorithms – Sets of Instructions Whelan
v. Janslow 1) Expression v. Idea 2) Congress a. Program contains expression and not mere idea b. Literary work 3) Utilitarian, Practical work 4) “Thin Protection” 5) Methods – limited protection 6) Court a. Purpose or Function – Idea b. Idea – Run dental lab c. Consequence – Everything not essential is expression and therefore protected d. Is there more than one way to run program? e. CT – Won’t protect most efficient way to produce result in program f. How do you separate the idea from the expression 7) Merger – Idea merges with expression 8) Control flow merges with idea 9) Problem – CT assumes every program has only 1 idea 10) Computer Associates Case – Program has many ideas 11) Abstraction/Filtration/Comparison (A/F/C) analysis 12) Copyright Goals a. Protects expression b. Keeps ideas open c. Reward to create works d. Protects expression without protecting ideas 13) Program – Utilitarian Work; KEYS: a. Function – Idea b. Expression – Whatever is not necessary to purpose or function 14) Dental Program a. Function – Aid operation in dental lab b. Expression – Everything not within dental lab needs 15) If there is more than one way to do something, there may not be infringement 16) Issue – Is there more than one way to write a routine? a. If so, then expression b. But – CT labels subroutines as individual programs c. Problem – Says overall package is one program, but treats routines separately. d. Criticism – If one algorithm is not in all other programs, then makes it unique expression Baker
v. Selton 1) Double-Entry bookkeeping 2) If expression can occur in more than one way, then protection permitted 3) CT – Only one way to express forms 4) Cannot protect if only one way to express forms 5) Merger Doctrine a. Scenes a Faire b. Scenes that must have certain content – Henry the VIII & 6 wives Computer
Associates v. Altai 1) A/F/C Standard introduced 2) Applications a. CA Scheduler – Manages Control Flows b. CA Adapter – Translation module for different O/S 3) Altai a. Writes ZEKE which is similar to CA Scheduler b. Creates OSCAR – 30% like CA-Adapter c. Uses “clean room” rewrite 4) Clean Room has never passed Court Discretion 5) NOTE: Differs from Reverse Engineering a. Examination
of a finished product to determine how the product is made. b. Are you permitted to make a copy of a S/W key? c. Gives means to compete d. Deprives makers of monopoly e. May copy for purposes of Fair Use 6) A/F/C a. Abstraction i. What P is trying to protect 1. Control Flows 2. Relations 3. Data Sets… ii. P must identify what part is to be protected iii. Must satisfy requirement to bring case b. Filtration – KEY i. Separates non-protected elements 1. CT a. Efficiency Elements b. “Dictated by Efficiency” c. Will not protect practical way to perform action d. Will not protect efficient elements 2. Dictated by External Factors 3. Elements taken from public domain c. Comparison i. Compare similar parts and filter efficient, external, public domain portions ii. Ask: What is left in the D’s program? iii. “Substantial similarities” phase iv. Required Analysis: Is there substantial similarity? Fair
Use Doctrine – 4 Part Standard 1) Purpose
for Use 2) Extent
of Use 3) Purpose
for Copying 4) Impact
on the Market 5) Public interest issues 6) Equitable Doctrine – Must be fair 7) Affirmative Defense 8) Only after C/R violation proved 9) Contrast with Clean Room – Independently created Feist
Publications v. Rural Telephone Services 1) Database protection case 2) Facts a. Phone company required to publish white pages b. Yellow pages are optional i. Highly profitable – 30% of revenues ii. Long distance w/in local area – Intra-lata Tolls c. Feist publishes region-wide directory d. Copied white pages for fee e. Rural Telephone refuses permission to copy, other Telco’s agree 3) TC/AC – May C/R Yellow Pages 4) SC a. Cannot C/R Fact b. May C/R compilation of Facts c. Nothing original about creating an alphabetical list of names d. May protect the way facts are organized e. Cannot protect actual facts 5) Issue: When do facts become copyrightable? 6) “Must be more than what author found” 7) Requires originality 8) C/R – Creative & original to you 9) “Sweat of the brow” doctrine a. Circuit CT’s – May C/R hard work items b. Only need evidence of own doctrine 10) Copyright Act a. 1909 Act – No requirement of originality; implied by CT’s b. 1976 Act – Definition of Expression Database Protection 1) Sell under license 2) Restrictive licensing 3) Methods a. Contractual Protection b. Technological Measures i. Hacking = Tort ii. Trespass to Chattels c. Legislation i. Bypass C/R ii. Problem: Undermines idea of C/R iii. Easier to categorize in another area d. European Union i. Grants 15 years of protection ii. Substantial Effort iii. Reciprocity to other Countries e. WIPO i. Database treaty ii. Failed thus far – lacking Senate ratification iii. But is more comprehensive than EU treaty f. Legislation i. HR 3531 – 2521 ii. HR 2652 – Dropped iii. HR354 1. “Sweat of the brow Doctrine” 2. Fair Use Doctrine iv. HR 1858 1. No Duplication 2. Good for people who want access to data 3. Haves v. Wants 4) Problems a. Some databases are the only source of info – C/R creates IP monopoly in facts b. Only creates violations and unfair trade claims à FTC becomes arbiter of issues c. Private right of action concerns Engineering
Dynamics Inc. 1) User Interface case 2) Logical v. Literal Expression 3) SACS – Program copied from rival 4) P – Claims sequence & format must be protected 5) Problem – Format & Sequence are expressive 6) Claim a. Cards only consist of facts b. Plain process, system method 7) D – Inputs are just facts 8) CT a. No literal copying b. Based on Public Domain S/W c. Programs have diverged d. Cannot C/R method of operation e. Ex) H-Stick Shift Pattern f. Expressive element to fact presentation g. More than one way to express facts h. Doesn’t utilitarian concept outweigh expressive elements? i. Structural Dissimilarities j. Utilitarian i. S/W ii. Interface k. Graphic C/R differs from factors/work l. Copying factual book (like chemistry text) easier than copying literary work copying 9) A/F/C Analysis a. Abstraction i. P explains what he is trying to protect ii. User Interface iii. Structure of the Program b. Filtration i. D – Call for facts ii. Obvious method of design c. Comparison i. CT evaluates ii. Compare what can be protected iii. Infringement must be on a major part of overall work, not just part of work Lotus
v. Paperback Software 1) CT – Filtration Analysis 2) Cites Learned Hand – 2 plays opinion 3) Issues a. Rotated L – CT decides Spreadsheet must have this format b. 2-line Moving Cursor i. Functional and Obvious ii. But not protectable because too obvious iii. May C/R code, but not the cursor iv. Patent law – Obvious v. Key: Use lots of elements in User Interface c. Keys & Macro commands i. CT – only limited number of keys on keyboard ii. Merger – Only a few ways to express an idea 4) C/R equivalent to Antitrust a. Monopoly on ideas b. Property Law – Monopoly c. Public Policy Concerns d. CT – Cannot compete without copying interface Misappropriation 1) C/L Tort Issue 2) Trade Secret 3) “Hot News” Cases a. INS v. AP – based on Tort b. Covers brief period when news is fresh and new c. Holding – Misappropriation Theory i. Direct Competitor ii. Time Sensitive iii. Labor and Money iv. Gathering v. Losses d. HR 354 i. Federalizes Hot News Doctrine (HND) ii. Preempts state 4) C/R preempts state property laws Property Rights 1) C/R 2) Patent 3) Trademark Trade Secret – Tort & K 1) Commercial Value 2) Measures to protect & enforce C/R as an Online Problem 1) Entitled to C/R protection a. Copy b. Public Display c. Public Distribution d. Download = Copy 2) CT a. Satisfies “fixation” requirement b. Permitted in Section 117 of C/R Act c. “Tangible medium of fixed expression” d. Who is responsible for all copying with computer processing? i. ISP ii. Content Copyright
Liability 1) Direct
Infringement 2) Contributory
Infringement 3) Vicarious
Infringement 1) Direct a. Playboy v. Freena (see Hornbook) b. Direct infringement, but requires act of violation c. Similar to Napster case 2) Contributory a. Know of copying; or b. Reason to know – Willful Ignorance c. Material contribution 3) Vicarious a. Right & opportunity to supervise; AND b. Direct material benefit c. Ex) dance hall owner plays music without paying royalties 4) ISP – Acceptable use Policy – right to supervise/shutdown service 5) Digital Millennium Copyright Act – Notice & Takedown provisions 6) Transitory transmission 7) Caching 8) Storage at Customer request Fair Use 1) Focus on Reverse Engineering (R/E) 2) Loophole in C/R 3) Permits harmless violations 4) Examples a. Copying article from magazine b. Copying CD à Tape 5) Affirmative Defense – D admits copy Fair
Use Elements – Only one element required to pass test 1) Purpose
& Character of Use – Commercial v. Non-Profit Educational 2) Nature
of the Work – Thin protection for fact-intensive works 3) Amount
and Substantiality in Relation to work as whole – How Much 4) KEY: Market Value of Item – Depriving
author of benefit of creativity Sega
v. Accolade 1) Console & Game Cartridge case 2) Accolade was not Sega’s licensee 3) Sega logo copied by Accolade 4) Accolade a. “Intermediate copying” b. Claims exception to C/R c. CT – No C/R Act exception d. Claims Idea not Expression e. CT – No Good f. Claims Section117 backup of S/W for Personal Use g. CT – Actions amount to more than creating archive 5) Substantial similarity not same as small bits of code 6) Fair Use Elements a. Purpose & Character of Use – Commercial à P b. Nature of Work – Functional à D c. Total % Copied – 100% à P d. Market Value 7) CT a. Disassembly brings new competition to the market b. Purpose & Character – R/E is socially useful c. Ultimate Copy - Non-infringing game containing limited amount of copied code d. Non-infringing – Non-protected e. Unprotected Expression – Only accessed through R/E f. C/R does not protect non-protected interfaces g. C/R does not protect anti-competitive licensing strategies Atari
v. Nintendo 1) Lock and key software 2) Small, deminimus code 3) Atari took chip out of console & “peeled it” 4) Chip was Firmware 5) Atari’s attorney makes false statement to C/R office to get code to allegedly defend against suit 6) CT – False pretense gain from C/R office is NOT Fair Use 7) D misconduct underlies & removes Fair Use Defense Sony v. Connectix 1) Console emulator software 2) Requires H/W & F/W replication 3) Sony a. Do as little copying as possible b. Argues Connectix made multiple copies when loading S/W into RAM 4) CT a. Qualitative, not Quantitative test b. R/E mechanics up to copier c. Reviews Frequency & Use Analysis 5) Sega Test – Nature and Purpose of Use 6) Nature of Work à Functionality 7) Amount of Work Copied 8) Affect on Market – Present, but people are not buying infringing products 9) Will sales of infringing product cut into other’s market? 10) CT – Collateral effect – not C/R issue 11) C/R does not protect holders from all attacks. 12) C/R protects holders from infringing works Napster 1) Recording Industry Association of America (RIAA) 2) Must Prove a. Direct b. Contributory c. Vicarious; AND d. Not Fair Use 3) CT a. Direct – Sony Betamax - Legitimate user purpose – Public Domain b. Contributory – Know or reason to know and contributes to use; found damaging e-mail à piracy c. Vicarious – Right and opportunity to supervise & benefit; Napster is not making money, good D Patent From the Hornbook 1) Protects systems, processes and methods of operation excluded from the C/R regime. 2) Creates comprehensive rights against infringing inventions. 3) Must be novel and improves upon the existing technology (prior art) in a way that would not be obvious to the person having ordinary skill in that field. 4) Where a computer program is part of a patentable process, the use of a computer program in the invention will not deprive that invention of patent protection. 5) C/R, not Patent, should be the primary source of IP protection. 1) Protects S/W – See State Street Bank Case recognizing Patent protection for S/W 2) Requirements a. Formalities b. Cost 3) Steps a. Submit b. Prosecute c. Scrutiny 4) Protects against independent creation 5) Important in technology fields 6) Statutory Categories - Monopoly a. Process, machine, material, matter b. Process v. Product c. Process – Transition of article to a different thing d. Matter – 2 or more substances 7) Cannot Patent a. Scientific principles b. Natural phenomena c. Mathematical Algorithms 8) 1969 – Patents began for Computer programs 9) 1972 – SC – Gottschalk v. Benson – No mathematical Algorithms can be patented 10) High Threshold of originality a. Novelty – Not previously described b. Utility – Useful c. Non-Obviousness – Improvement upon prior art not obvious to person unskilled in art 11) Independent Creation not covered by Patent 12) 1st to Patent covered – Priority 13) Monopoly on invention & sale 14) Express authority under Article I, Section VIII; unlike T/M & T/S 15) 1798 – Art a. Medium – Process b. CT Interpretation c. Process – Method of Operation d. Product – Machines, useful matter e. Compilation of matter – 2 or more substances Computer Programs & Patents 1) Programs previously considered TM & C/R 2) J. Douglas in the Gottschalk Case a. Patent – Monopoly on Algorithm b. Expression – Merger of idea in C/R c. Limits creativity with license d. Let Congress decide 3) Flute Case a. Algorithm does not deny patent b. Math can be used in other contexts c. J. Stevens Dissent i. Against patenting programs ii. Cites Obviousness v. Patent 4) Diamond
v. Dierhr a. Rubber mold case b. Distinguished from prior cases – may patent certain computer programs with process c. Improvement on prior art d. Process, therefore Patentable e. Program does not render process unpatentable f. Proposed Test i. Is there an algorithm? ii. Is the remaining element(s) statutory Subject Matter Jurisdiction? iii. Then apply 1. Utility 2. Novelty 3. Non-Obviousness State Street Bank v. Signature Financial 1) Program pools assets of Partnership 2) State Street seeks license from Signature for S/W – Fails 3) Sues to overturn Patent 4) TC – Machine Claim 5) Why is this Patentable? a. Mathematical Algorithm – Narrowed b. Business Method Exception – Not Permitted Trademarks From the Hornbook 1) Names, symbols, and other devices used to distinguish products from others. 2) Elements a. Distinctive b. No likelihood of confusion 3) Vicarious liability for those who lack actual knowledge of infringing activity, but who have the right and ability to supervise the activity of the infringer, and who have a direct financial interest in that activity. (Bookstore owners, dance hall operators) 1) Not mentioned in Constitution 2) Mostly state issue until Lanham Act 3) Based on Commerce Clause 4) Creates Federal Rights 5) Presumption of Nationwide Notice 6) Prevents Geographic disputes 7) Federal Question 8) Requirements a. Distinctiveness b. No Likelihood of confusion 9) Distinctiveness a. Identical Goods b. Generic Marks – Non-distinctive c. Ex) Car, toaster, VCR – Categories of goods 10) Descriptive Marks a. Describes product b. Ex) Portable typewrite – not portable unless secondary meaning 11) Suggestive, Arbitrary or Fanciful Marks a. Purely Distinctive b. Does not describe product c. Examples i. Kodak – Arbitrary Term ii. Apple Computer – Fanciful iii. Playboy - Suggestive d. Suggestive words cannot be TM’ed e. Must protect TM or else lose right to use. 12) Trademarks are not a big issue in Computer Law 13) Not part of Constitution 14) Must be used in commerce, otherwise can be considered abandoned 15) Registration permits Federal Court action, otherwise may have to prove diversity 16) CT Considerations a. Market Place Factors i. Similarities of Marks ii. Similarities of Goods & Services connected to marks iii. Nature of the Markets b. Strength of the Mark (distinctiveness) i. Fair Use Defenses – “IBM-Compatible” ii. Not Stealing TM – “IBM sucks” comment permitted 17) Lanham Act a. Unfair Competition b. Federal Right of Action for Harm Sierra Online Case 1) TC – Preliminary injunction against D; likely to prevail on the merits 2) “Hi Res” game S/W 3) Descriptive v. Generic Term 4) Descriptive with secondary meaning 5) D – Fair Use Doctrine 6) After 5 years, descriptive meaning may be used in fair way Apple
v. Formula International 1) TM and C/R infringement case 2) D admits substitute similarity 3) Substitute creates likelihood of confusion 4) Similar marks 5) Similar products 6) Intention to expand to assembled computers Domain Names 1) Bad Faith 2) No legitimate use 3) Confusingly similar Exam
Issues 1) S/W 2) C/R 3) Patent 4) Infringement 5) User
Interface 6) Structure 7) TM 8) Trade
Secret 9) Key
Cases a. Engineering
Dynamics b. Lotus 10) See old
exams 11) Read
Hornbook Privacy
& Data Protection 1) Sources of Protection a. Constitution - good when no statutory remedy found b. Statutes c. C/L 2) Griswold
v. Connecticut a. Right to Privacy b. Contraception and Marital Relationship c. J. Douglas i. State interferes with private relationship ii. Privacy – Protected relationship iii. “Emanations & Penumbras” d. Implied right of Privacy in relationships and marriages 3) Right of Privacy only applies to Gov’t actions 4) Mostly statutory protection 5) 4th Amendment a. Protection of Informational Privacy b. Procedural and Specific c. Warrants issued upon probable cause d. Supported by oath or affirmation e. Describe place or person to be searched or seized f. No “fishing expeditions” permitted 6) Katz – 4th Amendment a. Reasonable expectation of privacy – J. Harlan b. Zone of privacy c. Subjective Test – “Reasonable” Expectation of Privacy d. Objective Test – People know Telco has access to records e. Recording device violated the privacy upon which P justifiably relied while using the telephone booth 7) Smith
v. Maryland a. Informational Privacy – 4th Amendment issue b. Pen Register – records all numbers dialed out c. Trap & Trace – Records incoming calls d. AC – No reasonable expectation of privacy e. SC – Concurs with AC f. D has subjective expectation of privacy, but society does not need to treat that expectation as reasonable. g. Pen register does not violate a reasonable expectation of privacy and is not a search under the 4th Amendment h. ECPA Chapter 206, Section 3121(a) – No person may install or use a pen register or trap and trace device without first obtaining a court order. 8) Waylon v. Roe – See Hornbook a. Right to informational privacy b. Sue Gov’t for accessing stored information 9) USAF
v. Maxwell a. FBI warrant to search i. AOL ii. Kiddie Porn iii. Adult Chats b. Charged under Federal Obscenity Statutes i. Child Pornography ii. Conduct Unbecoming an Air Force Officer c. D claims 4th Amendment right to Privacy d. TC i. Warrant not required ii. No reasonable expectation of privacy iii. Good Faith Exception e. AC i. Warrant required ii. Reasonable expectation of Privacy iii. No good faith exception unless warrant defective iv. Finds warrant defective because AOL conducted search, not FBI v. Warrantless Searches 1. Plain View 2. Inevitable Discovery f. Outcome i. All fruits of search suppressed; but ii. Child Porn grounds for dismissal from Service g. Users of e-mail have a reasonable expectation of privacy for messages stored with their ISP’s. 10) Merriker
v. W.D. Cressman a. Right of Privacy b. Insidious violation on right of privacy c. 8th Grader – Critical Period Intervention Program d. Invasive Questions e. CT – Violates Right of Privacy based on Gov’t interfaces with relationships f. Requires knowing and intentional waiver to overcome issue g. No waiver granted by damaged party h. Related Themes i. Confidentiality ii. Data Protection Information Privacy 1) Covers Electronic and Data Protection/Privacy 2) Statutes – See Hornbook a. ECPA b. COPPA c. CFAA 3) Sectoral Approach – Different rules for different businesses 4) C/L Approach – Weak and difficult to prove a. Trespass to Chattels b. Invasion of Privacy Electronic
Communications Privacy Act (ECPA) – Always on EXAM Process 1) Read Offense 2) Read Description of the Offense 3) Read Definition of the Offense 4) See Katz case – Oral Communications Definition 5) Oral – No Storage 6) Wire – telephone, cell phone, permanent storage 7) Electronic – e-mail, no storage 8) Warrant a. Harder for wire or oral b. Easier for electronic 1) Chapter 119 – Wiretap Statute 2) Chapter 121 – Unauthorized Access 1) Chapter 119 Wiretap a. Covers i. Bug ii. Tape iii. Storage iv. Unlawful Access v. Unauthorized access (Chapter 121) b. Review Substance of Offenses – Sect 2511 i. Numerous Exceptions ii. Intentional Intercept c. Each word is carefully defined d. Intercept – Aural (as opposed to oral) – Human voice at any point e. Electronic, mechanical or other device f. Ordinary course of business i. Customer service taping ii. Phone extension exception g. Wire Communications - Anything containing human voice over wire h. Cell Phones 1981 i. Initially not wired communications ii. Not initially covered in ECPA iii. 1986 Act – Wires found in switching stations iv. Cell phones now covered under ECPA i. Oral Communications – Based on Katz reasonable expectation of privacy i. Lecturer does not have a reasonable expectation of privacy ii. At home, you do have a reasonable expectation of privacy j. Electronic Communications i. Broad spectrum including e-mail ii. Numerous exceptions iii. May intercept 1. Pager information 2. Wire/oral Comms 3. EFT Information – but may be covered under right to financial privacy k. Law Enforcement Exception – Easier for oral warrant than electronic warrant l. Motions i. Wiretap 1. Periodic reports to CT 2. Justify need for continuing Wiretap ii. Warrant 1. 1 time showing of need 2. Probable Cause m. Intercept required for any federal offense n. Exclusionary rule for wire/oral interception o. Other exceptions i. ISP’s ii. Operators of switchboards iii. BBS Hosts p. Party Consent i. 1 Party Consent in most states ii. 2 Party consent in MD & 8 other states – Linda Tripp case q. Penalty Provisions i. Civil ii. Criminal iii. Default – 5 years for felonies 2) Chapter 121 – Stored and Electronic Communications a. Targets e-mail, remote communications b. Electronic communications service – wire or electronic i. Telco ii. ISP c. Remote computing services – Sharing data remotely d. Only electronic communications e. Section 2701 i. Intentional Access ii. Access without or exceeding authorization iii. Wire or electronic communications iv. Must be communications f. Section 2702 i. Telco cannot disclose contents of communications without warrant ii. Geared towards needs of Direct Marketing Association g. Section 2704 – Background Presence – Gov’t must give reasonable notice Steve Jackson Games Case 1) D&D company 2) Stored e-mail – Stored at ISP, not retrieved by D 3) Sent, but not retrieved 4) Not considered intercept 5) Warrant 6) Unauthorized access to stored information – Interception 7) CT a. Police did not acquire contents through use of device b. Privacy challenge overturned c. Criticizes ECPA Computer Fraud and Abuse Act (CFAA) 1) Any computer used in Interstate Commerce 2) Any Internet-connected computer 3) 18 USCS 1030 4) Knowingly Access a. Interstate or foreign communications b. Intent to defraud or extort 5) Access and acquisition of information 6) ECPA – Covers Service Providers 7) CFAA – Any Computer Children’s Online Privacy Protection Act (COPPA) 1) Requires verifiable parental consent 2) Consent – Disclosure 3) Internal use of data permits light application 4) Outside use of data requires stronger consent 5) Directed at children under 13 6) Only applies to commercial sites Exam 1) Determine
what statute to apply, if any 2) 121
ECPA a. Electronic
Communications Services – Telco b. Remote
Computing Services – ISP’s c. If
no ECS or RCS, then use 119 ECPA 3) 119
ECPA a. Interstate
Commerce Computer b. Linked
to any other computer 4) Voluntary
release of Information to Comms 3rd party 5) Protection
of Personal Information Antitrust From the Hornbook 1) Principles of Antitrust Enforcement a. Improve customer welfare by protecting the competitive process b. Protecting competition rather than competitors based on an unreasonable restraint on competition 2) Tying – Seller’s exploitation of control forcing a buyer into purchasing a tied product that the buyer did not want, or might have preferred to purchase elsewhere on different terms. 3) Tying Elements a. D had market power to tie products b. Tied products are separate; and c. D used market power to force customers to accept tying arrangement. P must show there are 2 distinct products. 4) Market Power – Ability to raise price or limit output in a relevant market for some meaningful period of time. Generally inferred by identifying a relevant market and finding structural evidence that the market is not competitive. 1) Sherman Antitrust Act a. Short Act b. Lots of case law c. Protects competition, not competitors d. Protects consumers e. Discourages monopolies, price fixing 2) Section 1 – See Hornbook a. Joint Action – 2 or more people b. Per Se c. No legal business purpose d. Price Fixing e. Allocation of Territories – Construction f. Group Boycotts 3) Section 2 – Monopolies a. Keeping once having b. Attempt c. Conspiracy d. Generally single firm offense 4) Computer Industry a. Tie-in Offense b. Monopoly in one market c. Used to leverage advantage in another market d. Ex) Xerox copier requiring Xerox brand paper e. Leasing affects tying arrangements f. Microsoft – Must buy OS license for every computer shipped g. Do people expect the product to be there? i. Tires for cars – Yes ii. Extended warranties for cars – No h. Keys to tie-ins i. Perception ii. Timing Proving Antitrust Monopoly – Ability to raise prices in a market above a competitive limit for a period of time 1) Relevant Market a. May be entire case b. All products or services for each other c. P – Claim not substitute in market d. D – Claim are substitutes in the market e. Cross-Elasticity of demand f. Market i. Product ii. Geographic 2) Does D have power in the market? a. Could D get away with charging above market prices? b. Evaluate barriers to entry c. Demand – Substitutability d. Supply – Substitutability e. HHI Index i. Sum of the shares of market, squared ii. If total exceeds 1,800 à Monopoly iii. Highly Concentrated Market Exam 1) Apply
Microsoft Analysis 2) Use
Basic Checklist Tying Allegations in Microsoft Case 1) Some legal 2) Some illegal 3) One of many allegations v. Microsoft 4) Similar Allegations a. IBM and Punchcards b. IBM Mainframes & S/W c. Car & Parts 5) Requirements a. Proof of Market Power b. Separate in Market c. Beyond normal market practices – coercion 6) Tying v. Leveraging a. Leveraging is Okay b. Tying may not be okay 7) Market Power a. Monopoly b. Maintained in Predatory Ways 8) Identify a. Relevant Product Market b. Relevant Geographic Market – Substitutes 9) Monopoly – Ability to raise prices above a certain amount at a give length of time a. Keys i. Supply Substitutability – Speed to market for others 1. Short Term – Quick ramp up 2. Long Term – Speed to Market ii. Demand Substitutability – Long Distance Tel rates b. Applications Barriers to Entry – Key in Microsoft Case i. HHI – Index for Monopolies ii. Additional evidence iii. Used to determine when to approve a merger c. Proposed findings of Fact d. Parties comment e. Market Power for Discussion i. Relevant Market ii. All Intel Computers licensed – worldwide iii. Server O/S – Too large of a market iv. Non-Intel computers 1. No difference with market share issue 2. No evidence of pricing behavior influencing Mac market 3. Information Appliances – Substitutes, not purchased in lieu of PC’s 4. Network Computers – Substitutes also 10) Middleware – Heart of case a. Browser runs on top of O/S b. Theoretically people can write S/W for browser & multiple O/S c. API – Applications Programming Interface d. Interacts with Application Program (browser) e. Applications barrier to entry f. Most programmers write for major O/S g. Network effect i. Value of product rose with the number of people using it ii. Chicken & Egg Effect iii. Phone(s) 1. 1 phone user = Nothing 2. Multiple phone users = Market 11) Tipping Effect a. VHS v. Betamax b. CD’s v. Albums c. Point at which market tips into one competitor 12) Substitutability of Supply a. Can new suppliers readily enter market? b. If Microsoft raises Win95 prices, will new suppliers enter market? No c. Microsoft Market share – 92% - 95% 13) Monopoly a. Unlawful acquisition claim fails b. Acquisition through Network Effect & Tipping c. No violation of Antitrust laws 14) Issue: Has Microsoft done something to maintain a monopoly advantage? 15) After the Fact a. What is unlawful? b. Any behavior to use monopoly against anyone else 16) Holding: Microsoft gave itself advantage in the browser market and uses its leverage over other firms 17) Alleged Actions – Coerce Netscape to redesign product 18) CT a. Monopolist is not required to share information with competitors b. Maintaining Monopoly Power, preserves barrier to entry c. Creates competing browser to drive Netscape out of Market d. Gives IE away for free e. Excluding another from the market without good reason = Anticompetitive f. IE bundled (tied) with Win95 – Section 1 violation g. OEM’s cannot delete IE icon from desktop Exam
Review 1) Show a. Relevant
Market b. Structure
of Market c. Abuse
of Market Power 2) Analyze
- Key 3) Discern
Facts 4) Hard
to Identify Outcome Analysis 1) Identify relevant market a. Product b. Scope – Worldwide for most S/W c. Rage of product to replace D product d. Where else can consumer go for similar product? e. Substitutes f. Microsoft attempted to broaden the relevant market to include: i. Servers ii. Macs iii. PDA’s g. Gov’t – Not readily substitutes h. CT i. Mac not substitute for MS Windows 95 ii. Mac only has 10% of market share of desktop computers 2) Structure of the Market a. Supply b. Demand c. Substitutability d. Likelihood of consumer to find another supplier e. Demand Substitutability i. How quickly can competitor enter market? ii. How fast can supplier change prices? 3) Abuse of Market Power a. Misuse of Monopoly Power b. Exclusionary c. No rational business justification except to extend monopoly d. Market power based on market share e. Rebuttable presumption f. Contested Markets g. Is
this abuse of monopoly power? h. Is
this something monopolies do? i. Businesses are expected to push every advantage j. Case i. Netscape Negotiations ii. Promise in exchange for non-compete agreement k. Bundling i. IE with Windows 95 ii. IAP/ISP Chain iii. OEM’s iv. ICP Providers l. Leverage v. Tying i. Leverage – Antitrust Term of Art ii. Tying Win95 with IE m. CT i. Maintaining Monopoly ii. Tying – OEM Market ProCD
v. Zeidenberg 1) Online Contract 2) Contractual Sale, leasing, S/W 3) Mass Market Transactions a. Adhesion Contract b. Unconscionable Terms c. No Negotiation 4) Consumer Transactions a. Electronic Signatures b. Electronic Transactions 5) License a. Form of Contract b. Property Interest 6) K allows right granted not available in trade secrets or C/R Law 7) May relinquish some C/R rights with license 8) May create rights with license 9) CT – May use data without violating other C/R license issues 10) TC a. Pro Consumer Judge b. Does not bind consumer to unread contract c. C/R Law & Statute – If there is no other way to use except for making a copy, then it is not a C/R violation d. TC Accepts complete defense e. Limits License 11) AC a. Pro Contract Judge b. Upholds Contract & License c. Contract v. License (Not relevant to Enforcement) i. Contract – 1 time payment ii. License – Recurring payment d. Adhesion Contract – Take it or leave it 12) Plaintiff Argues a. C/R on search S/W b. Download of search software = C/R violation c. Hornbook – Any loading = Copy 13) Defendant Argues a. Adhesion Contract b. Unconscionable Terms c. Outrages and offends the sense of justice 14) 1st Sale Rule – When you buy a copy of a book, you own the copy, not the original work. 15) In some licenses, owners own copy and license permits copies to me made. 16) Statutes a. UCC – Sale of Goods; S/W Sales b. GATT – Goods v. Services c. UCITA – Only ratified in VA & MD 17) Realistic expectations in contract upheld 18) Unrealistic expectations not permitted 19) C/R Act Preemption provisions – D claims license creates rights preempted 20) IP Law - Balances inventor’s rights with society’s rights to create new works 21) Federal law trumps over State law in C/R, but not in Contract Law UCITA 1) Electronic document has parity with paper document 2) Electronic signature has parity with paper document E-Sign Act – S. 761 1) Court will not deny validity for electronic signature 2) May present evidence to show fraud 3) Geared towards mass market consumer transactions 4) Consumer must give consent for electronic signature use 5) Makes it harder on businesses, must maintain consent database 6) Permits states to create additional protections Contract Formation/Licensing 1) Issue: How do you form a contract in a mass market? 2) CT – Non-negotiated Contract; no opportunity to read 3) Adhesion – Take it or leave it 4) Unconscionibility – UCC a. Something shocking b. Offends sense of fair play 5) Cal. – Reasonable Expectations a. Business Context/Market b. Normal Expectations c. Industry Standards d. If outside envelope, may not enforce e. Discretionary 6) UCC Article 2(b) - Shrink/Click wraps may be enforceable if not unconscionable 7) Electronic Data Interchange a. Contract by Operation of Law b. Electronic Agents buy/sell inventory 8) Tort & Contract 9) Adequate opportunity to review terms required 10) Full of pitfalls 11) Future a. UCITA-like legislation b. E-Sign Legislation c. State Law – Counter-Legislation Exam
Issues 1) Zeidenberg
problem on Contract/Licensing 2) Probably
not UCITA issue/question |
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