Letter from AmeriKat - 2009 Countdown (Part II)

NUMBER 3: Bilski Goes to Supreme Court

In November, the Supreme Court heard the arguments in the case of Bilski regarding the patentability of Bernard Bilski and Rand Warsaw’s computerized method for using weather data to predict prices of commodities and energy costs. The Supreme Court has not delivered a decision on the question of patentability since 1981.

According to the Wall Street Journal’s Supreme Court correspondent Jess Bravin appeared to be “skeptical and at times scornful ... to arguments that there should be broader patent
protection for ‘business methods’”. Mr J. Michael Jakes, appearing on behalf of the Petitioners (Bilski and Warsaw), argued that the Federal Circuit’s decision test for “machine-or-transformation test” was too narrow for all patent-eligible methods and found no basis out of Section 101. Mr Jakes also stated that where a patent does not satisfy the transformation test and thus should arguably not be patentable, that same patent would also fail the obviousness test. Therefore, instead of overly restricting the concept of patentability and limiting potential useful patents at the first threshold, the exercise should instead occur at the point of obviousness. The arguments of Mr Malcolm L. Stewart, Deputy Solicitor General, boiled down to the fact that the Government did not think that “this case would provide a suitable vehicle for resolving the hard questions because the case doesn’t involve computer software or medical diagnostic techniques.” The various press reports of the oral submissions seemed to indicate that Bilksi’s case is doomed. This case seems to be headed to a decision which will not, in Justice Ginsburg’s words, make “any bold steps”.

The much anticipated decision is expected in the New Year.

NUMBER 2: Murdoch and Newspaper Industry v Internet

The year that the US newspaper industry lost more than 40,000 jobs also saw business tycoon
Rupert Murdoch commence a battle against companies such as Google for “stealing” content from his news publication websites, like the Times and the Wall Street Journal (see Murdoch's Federal Trade Commission speech here). His move followed a proposal that he would begin placing his titles behind a pay-wall – which some say may be a quick-fix solution with little long-term sustainability. The Wall Street Journal, with around 1 million subscribers, already charge for some of its content. Murdoch stated that he planned to “extend this model to all our news organizations such as the Times in London” and that “[p]roducing journalism is expensive. We invest tremendous resources in our project from technology to our salaries....To aggregate stories is not fair use. To be impolite, it is theft.” Many, including Huffington Post founder Arianna Huffington (see this article in the Guardian), countered Murdoch’s statements by alleging that he and his news corporations have confused aggregation with misappropriation. Google’s UK director, Matt Brittin, told MPs of the DCMS select committee that "[w]e do not steal content. If you look at Google search and Google News what you will find is snippets, a little line that will take you through to the original websites. That's accepted as in line with copyright law worldwide, seen as like a newspaper article quoting lines from a book in a book review. We defend copyright owners' rights and it's wrong to paint us as stealing content. We are like a virtual newsagent." An extension of this debate has even seen some individuals stating that hyper-linking to newspaper content, as what is done routinely by the IPKat, should be copyright infringement.

With a diverse cast of characters, a Western-style standoff between old media and new media and the thread of copyright law weaving through the saga, this continuing story was one of the top issues of 2009.

NUMBER 1: The Google Books Settlement Saga

If there was one issue that rubbed the AmeriKat’s fur the wrong way this year it was the Google Books settlement saga. The Google Book Settlement made in November 2008 was a result of a class action lawsuit brought by the Association of American Publishers, the Authors Guild, and other select authors and publishers who had alleged that Google’s scanning of their books infringed their respective copyrights.

The first draft of the Settlement would have enabled Google to scan copyright, out-of-print and orphaned works in the US for online inclusion in exchange for $125 million payment to a Books Right Registry from which authors and publishers would then be compensated. The online functionality of the Google Book Search, in conjunction with the approved Settlement, would have enabled Google to use the content for a multitude of permitted acts such as sales, advertising and third-party licensing. 37% of revenue earned from these uses would go to Google. In the US, Google had previously given authors until 5 May 2009 to “opt-in” or “opt-out” of the settlement terms. Failure to do so would have the effect of “opting in” an author/publisher to the settlement – in effect a compulsory licensing system. This and the issue of Google acting as a de facto exclusive licensor of “orphan works” generated waves of concern throughout the U.S., resulting in the Justice Department commencing a formal inquiry into the Settlement’s antitrust implications this past summer. With several amicus curiae briefs filed by opponents and supporters of the project, including staunch European opposition, Judge Denny Chin gave the parties another opportunity to redraft the settlement. The second draft, however, in the AmeriKat’s opinion did little to correct the concerns of the first. The final fairness hearing is scheduled for 18 February 2010.

The publishing industry is already facing a revolution in relation to its business structure. With the advent of Kindle, an electronic e-book reader produced by Amazon, writers are now selling rights to their publications directly to Amazon.com rather than through a publisher. This echoes the change to business structure that has ravaged the music industry in recent years.

In the AmeriKat's opinion the implications of an approved settlement could potentially be devastating given the extent and possible anti-competitive nature of the settlement’s terms to copyright law, orphan works and the future of the publishing industry.

Ones to Watch for 2010: The AmeriKat will be keeping her eyes and whiskers out for the exciting IP stories of 2010 including updates on the bubbling-under of the malevolent ACTA (here and here), the ping-pong saga of Nokia v Apple (here and here), i4i v Microsoft, and the international copyright consequences Premier League v You Tube (and here).

In the meantime, Felíz Año Nuevo de Albuquerque, Nuevo Mexico!