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World Cup Courts:Licensing Issues in the News : 

World Cup Courts:Licensing Issues in the News William J. Kelly III www.kellystacylaw.com

Slide 2: 

By the way… What is a “World Cup Court?”

On-Line Licensing Issues : 

On-Line Licensing Issues Was a contract formed? Click-wraps Browse-Wraps Bragg v. Linden Research, 487 F. Supp.2d 593 (E.D. Pa. 2007)

On-Line Licensing Issues : 

On-Line Licensing Issues Practice Pointer: “Make the click match the contract” All terms visible online “I Agree” button conforms to all contract terms User cannot proceed without agreement

On-Line Licensing Issues : 

On-Line Licensing Issues The Statute of Frauds requires a “Signed Agreement.” Is a click-wrap agreement “signed”?

Outsourcing and Licensing Issues : 

Outsourcing and Licensing Issues

Outsourcing and Licensing Issues : 

Outsourcing and Licensing Issues Outsourcing [to India or elsewhere] has many licensing ramifications: Conflicts between PSAs/MSAs and the software licenses that pertain to it; Conflicts between the PSA Indemnity and Infringement Indemnity; Conflicts among “strict nondisclosure” provisions in licenses; Defining “Licensee” “User” “Affiliate” and “Third Party Beneficiaries” (George Kimball (formerly Baker McKenzie, presently Hewlett-Packard) has numerous current publications regarding licensing issues in outsourcing. See, e.g., Sept – Nov 2010 1018 PLI/Pat 287)

Death of a Salesman : 

Death of a Salesman Autocad Users Were Licensees, Not Owners; First Sale Doctrine Not Applicable to Resale   Purchasers of Autocad software on compact discs were licensees rather than owners of the software; thus, the resale of the used CDs on eBay was not subject to the first sale doctrine as set forth in the Copyright Act, the U.S. Court of Appeals for the Ninth Circuit ruled Sept. 10 (Vernor v. Autodesk Inc., 9th Cir., No. 2:07-cv-01189-RAJ, 9/10/10).   Vacating summary judgment of noninfringement, the court set forth a three-part test to determine whether the transferee of a computer program is a licensee or an owner with respect to its legally acquired copy of the software.   In reaching its conclusion, the court acknowledged “the significant policy considerations raised by the parties and amici on both sides of this appeal.” However, these considerations ultimately did not alter the court's interpretation of the relevant statutes, noting that it was up to Congress to amend the law in the face of such considerations.   The considerations so referenced included giving software developers the flexibility of instituting price discrimination that may benefit education and lowering prices overall, and avoiding software piracy. On the other side, libraries and consumer advocates argued that upholding such licenses may interfere with the operation of libraries and used book stores.

Death of a Salesman : 

Death of a Salesman Avoid Naked License via Quality Control Control in fact (not right to control) Do not negate control (“Licensor is solely responsible for supervision of agents and compliance with state law.”) versus (“Licensee shall conform to at least the standards of Q.C. currently prevailing…”)

Grey Matters : 

Grey Matters BNA Patent, Trademark & Copyright Law Daily™ Source:  Patent, Trademark & Copyright Law Daily: News  09/29/2010  Costco First Sale Defense On Sept. 8, the American Bar Association filed an amicus to argue that a retailer accused of selling foreign-made infringing copyrighted watches may not rely on the Copyright Act's first sale doctrine for products not produced or first sold by the copyright owner within the United States (Costco Wholesale Corp. v. Omega S.A., U.S., No. 08-1432, brief filed 9/8/10). The ABA agreed with watch maker Omega S.A. that the defense is inapplicable when a copyright owner has not authorized domestic sales of copies. Omega sued warehouse club Costco for selling authentic, but “gray market” Omega watches in its California stores. Costco had obtained the watches from a third party who had first purchased the watches from authorized Omega distributors overseas. Omega alleged that Costco's acquisition and sale of the watches bearing the Omega Globe design in California constituted copyright infringement, under 17 U.S.C. §§106(3) and 602(a), because Omega had not authorized the sale of the watches in the United States. Costco claimed that Omega's initial foreign sale precluded any subsequent claims of infringement according to the Copyright Act's first sale doctrine, 17 U.S.C. § 109(a). The U.S. District Court for the Central District of California agreed with Costco, and accordingly granted Costco's motion for summary judgment. The Ninth Circuit reversed. The Supreme Court granted writs. Congressional Research Service predicts “considerable impact” on the U.S. retail industry.

Obviously : 

Obviously Licenses as Evidence of Commercial Success, to Rebut Obviousness The ultimate determination of whether an invention is obvious is a legal question based on the totality of the evidence. Richardson-Vicks, Inc. v. The Upjohn Co., 122 F.3d 1476, 1483 (Fed. Cir. 1997). Commercial success and unexpected results, although supported by substantial evidence, did not overcome a strong case of obviousness. Id. at 1484. See also Brown & Williamson Tobacco Corp. v. Philip Morris, Inc., 229 F.3d 1120, 1131-32 (Fed. Cir. 2000). According to Appellant, the “present invention is the subject of a license to Cornerstone BioPharma, Inc. Under the license, Cornerstone BioPharma, Inc. (as well as a previous licensee) has marketed and sold AlleRx®, a product that meets all of the requirements of at least claim 1 of the ‘796 patent.” (case then lists the sales volumes under license).Ex Parte J-Med Pharmaceuticals Appellant & Patent Owner, APL 2010-006150, 2010 WL 3728739 (Bd. Pat. App. & Interf. Sept. 22, 2010)(argument accepted).

Obviously : 

Obviously In re: RAKTL Litigation Sept 28, 2010 Katz’s argument that 100s of multi-million dollar licenses have already been taken do not alone establish commercial success to overcome a challenge to “obviousness.”

Conversely: Licensing and Trade Secrets : 

Conversely: Licensing and Trade Secrets The Pros: Leverage Business/Enter New Markets Additional Revenue Enhance Trade Secret claims The Cons: Loss of exclusive control Establish competitors with use of trade secret information

“Show Me The …Non-Monetary Damages!” : 

“Show Me The …Non-Monetary Damages!” Acumed LLC v. Stryker Corp., 551 F.3d 1323 (Fed. Cir. 2008)(interpreting EBay, 547 U.S. 388 (2006)). In granting injunctive relief, the district court found irreparable harm and lack of an adequate remedy at law even though Acumed had previously licensed the patent to two other companies. Stryker argued that Acumed’s licensing of two large competitors demonstrated that money damages would be an adequate remedy. The court held, “Absent clear error of judgment, which is not evident here, the weight accorded to the prior licenses falls squarely within the discretion of the court. A plaintiff’s past willingness to license its patents is not sufficient per se to establish lack of irreparable harm if a new infringer were licensed.”

“Show Me The …Non-Monetary Damages!” : 

“Show Me The …Non-Monetary Damages!” Be sure your license states: Royalty/Fee cannot make Licensor whole in face of breach and is but one measure of several damages to goodwill Acknowledge that Licensor has an immediate right and need to control the License Damages difficult or impossible to fix Consent to injunctive relief in addition to actual damages

Agent Orange Book : 

Agent Orange Book Princo Corp. v. Int’l Trade Comm’n, 2010 WL 3385953 (Fed.Cir. Aug. 30, 2010). Side agreement between patent holders to suppress one company’s technology, while separately licensing the other’s, constituted misuse of the licensed “Orange Book” (CD Manufacturing) patents.

The Devil Is In the Retail : 

The Devil Is In the Retail 02 Jul 2010 Intellectual Property Magazine “Direct-to-retail brand licensing has never been more important for IP practitioners. … The increasing power of D2C by major retailers is widely understood, and one of the consequences of this has been the changing relationship between some bigger retailers and consumer brands. “

The Great LaBilski : 

The Great LaBilski Earlier presentations in this seminar have covered Bilski v. Kappos. Bilksi’s ramifications and progeny are uncertain. What we do know is that Bilski’s impact on viability of software and business method patents will have a nearly 1:1 impact on those technologies’ licensing activities. So stay tuned…

Social Media, Advertising & License Trends : 

Social Media, Advertising & License Trends Brands on Sidelines as Disney, Google and MTV Charge Into Social Games Sale of Virtual Goods More Powerful than Ad Dollars, for Now By Kunur Patel Published: July 28, 2010 NEW YORK (AdAge.com) -- There's a land grab in social gaming, but at this point, it doesn't look like there's much room for advertisers. In FarmVille, more that 1 million people have purchased Cascadian Farm organic blueberries, the game's first branded crop. On Tuesday, Disney acquired top-three developer Playdom for $563 million plus $200 million in incentives. Google, meanwhile, is reportedly in talks with Playdom, Electronic Arts and Zynga in a social-gaming push. And MTV Networks this month acquired social-game developer Social Express and plans to launch games based on its TV shows later this year. With the draw of their established storylines and characters in social games -- not to mention well-oiled marketing machines -- established media companies hope they can use casual gaming to grow and interact with their already massive audiences. "When media companies integrate their brands, it's going to be easier for people to get into the games because they are familiar and that will expand the market," said Justin Smith, founder of social-game research firm Inside Network.

Open Source Wars : 

Open Source Wars Sunday, September 26, 2010 “PING has investigated wireless routers, PC cameras, phones and even an exercise bike. The problem becomes only worse as the use of open-source software spreads to industries far afield of the somewhat clued-in technology sector. Carmakers, for example, often use open-source software in their entertainment consoles, while energy companies have started to offer smart meters to their customers.”

Don’t forget to FOSS : 

Don’t forget to FOSS WHAT MAKES FOSS DIFFERENT? Raymond Nimmer Blog -- http://www.ipinfoblog.com FIRST: FOSS licenses often creep in without a commercial party as a licensor.  Doing business with a company whose product or service uses a FOSS license is no more or less difficult than dealing with any licensor. The licensor has terms on which it insists and, unless it can be bargained away from those terms, the licensee either accepts the terms or finds another business solution.  But many FOSS-based transactions are not commercial.  Instead, software subject to a FOSS license may come into a product without the producer knowing that this has happened or, in any realistic way, assenting to the terms.  Also, the software often comes from a non-commercial party.  An engineer downloads software from an academic’s site and uses part or all of it in the company’s newest product. This is fine if one of the truly free, non-restrictive licenses is involved, but it creates potential havoc where one of the falsely labeled free but more restrictive licenses purportedly governs.

Don’t forget to FOSS : 

Don’t forget to FOSS WHAT MAKES FOSS DIFFERENT? Raymond Nimmer Blog -- http://www.ipinfoblog.com SECOND: Especially at the “open source” end of the spectrum, the restrictive terms of many FOSS licenses aim toward eliminating valuable assets of the company by mandating disclosure of source code associated with the FOSS-licensed software.  This is the so-called viral effect of FOSS licenses. No company wants to unknowingly put itself into a position of risking valuable assets on the costly roll of the dice that is modern litigation.

Don’t forget to FOSS : 

Don’t forget to FOSS WHAT MAKES FOSS DIFFERENT? Raymond Nimmer Blog -- http://www.ipinfoblog.com THIRD: The FOSS-based theory underlying the license is backed by a zealous and very vocal “community.” The group of individuals who make up the open source community resemble a religious cult, except of course that there is no focus on a god-like figure.  What this means, however, is that in dealing with a FOSS license, the licensee must not only regard the reactions and goals of an often non-commercial party, but also the reactions of this vocal community.  Recently, the Los Angeles sheriff’s department made a huge number more copies of a Wall Data software package than authorized by its license. Hauled into court, it properly lost.  But there was no hue and cry brought down against it for violating the terms of the license.  If this had been an open source license and one of its core terms was being breached, there would have been a hue and cry throughout the Internet.

Outsourcing Open Sourcing : 

Outsourcing Open Sourcing Software Freedom Law Center to Announce Opening of Branch in India to Serve Global FLOSS Developers New Dehli Office Headed by Mishi Choudhary New Delhi, India, August 27, 2010 The Software Freedom Law Center (SFLC) will announce the opening of its new international organization in India at the upcoming Software Patents and the Commons conference in New Delhi. The expansion will allow the SFLC to continue its mission of promoting and defending Free, Libre, and Open Source Software (FLOSS) on a global scale. SFLC's India organization will provide reliable advice to FLOSS developers about how to organize, license and protect the freedom of the software they make and distribute. “As Indian programmers play an ever more critical role in the twenty-first century software industry, the SFLC will be there to assure they thrive."

To Russia, With License : 

To Russia, With License Trademark licensing: Russian practice Russia implemented new trademark licensing laws in 2008 to remain competitive in “the crucial business tool of international commerce.” Changes in Russian trade mark law back in 2002 resulted in trade mark cancellation actions based on five or three years’ non-use depending on the date of filing the trade mark in question. The relevant part of the Russian Civil Code devoted to IP issues (Part 4) did not remove this dual approach. However, in March 2009, a Resolution of the Plenum of the Supreme Court and the Plenum of the Higher Arbitrage Court came into force. Now, any trade mark becomes vulnerable for cancellation after a three-year non-use period, regardless of its filing date.

Lost in Translation : 

Lost in Translation UrFilez Launches DRM-Free MP3 Music Service in the GulfTechnology enables easier use of mobile music, creating new revenue generators in the developing world NEW YORK, Sept. 26 /PRNewswire/ -- UrFilez, a leading digital music service for the Middle East, Africa and Asian markets, today announced a new digital rights management (DRM)-free MP3 service in Bahrain with content from all four major record labels. UrFilez has launched its new music download service together with on-demand streaming and personalized radio mobile applications for Blackberry, iPhone and Android users.  Consumers will now be able to use their MP3 downloads without restrictions across the full array of playback devices, including PCs, mobile phones, portable media players and CD players.  The streaming services and mobile applications give consumers portability and access to the full library for extremely affordable prices.

China Syndrome : 

China Syndrome Recent changes in Chinese IP law permit the State Intellectual Property Office (“SIPO”) to grant a compulsory license with respect to an invention or utility model patent in certain circumstances, including monopolies, failure to prosecute, or certain kinds of pharmaceuticals. Not everyone is thrilled.

India likes China’s idea : 

India likes China’s idea India May Issue Compulsory Licenses to Control Drug Prices NEW DELHI. In order to allay concerns that the recent spate of acquisitions of Indian pharmaceutical companies by foreign firms may reduce the availability of affordable drugs, both patented and generic, India's Department of Industrial Policy and Promotion on Aug. 24 circulated a discussion paper seeking public comment on issuing compulsory licenses. Compulsory licensing, under which the government issues a license to a third party to produce and market a patented product or process without the consent of the patent owner, is permitted by the World Trade Organization's agreement on Trade-Related Aspects of Intellectual Property Right and is used to ensure essential drugs are available at reasonable prices. It is included in India's intellectual property laws, although no compulsory license has so far been issued.

Raising “Cane” : 

Raising “Cane” The World Intellectual Property Organization (“WIPO”) Arbitration and Mediation Centre is opening an office in Singapore. Announced on 28 December2009, the new office will be the first such office outside Geneva. It will administer and facilitate hearings in cases conducted under the WIPO arbitration rules.

What does this have to do with me? : 

What does this have to do with me? When drafting international licenses: Consider more than the “Licensed Territory” Have strong and enforceable language regarding Choice of Law, Venue, and ADR Conduct research and/or contact local counsel to inquire about ADR Don’t assume naked or compulsory license issues in Far East or Middle East


THANK YOU, BNA George Tanguay Legal Account Executive BNA Direct: 303-481-8569 Cell: 720-278-1970 Mail: gtanguay@bna.com



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