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U.S. Intellectual Property and New Media Law Update NEW RULES, NEW WAYS (U.S. Patent and Trademark Office - May 11, 1999) EXPRESSIVE SOFTWARE Bernstein, v. U.S. Department of Justice, et al. (Ninth Cir. - May 6, 1999) YES, A METHOD OF BUSINESS REALLY IS PATENTABLE AT&T Corp. v. Excell Communications, Inc., et al. (Fed. Cir. - April 14, 1999) THE GREAT PRETENDER Robi v. Reed et al. (Ninth Cir. - April 2, 1999) THE BUTTHOLE SURFERS Walthal, et al. v Corey Rusk, et al. (Seventh Cir. - March 26, 1999) NEW RULES, NEW WAYS (U.S. Patent and Trademark Office - May 11, 1999) As previously reported, on October 30, 1998, the Trademark Law Treaty Implementation Act of 1998, Public Law No. 105-330,12 stat. 3064 (15 U.S.C. 1051) was passed, to be effective October 30, 1999. The PTO has issued the proposed rules to implement the TLTIA as of October 30, 1999. The proposed rules make extensive changes not only for the implementation of the Act but to simplify and clarify procedures for registering trademarks and maintaining and renewing trademark registrations. Among the changes it eliminates the need for an officer of a corporation to sign on behalf of the applicant, thus making electronic filing easier. It eliminates other barriers to registration such as the requirement that you cannot file under Sections 1(a) or 1(b) in the same application and eliminates method of use clauses. The end result is a simplification of the application process, easing the way to concentrate on the thorny problems of trademark practice rather than compliance with arcane PTO rules. The changes brought about by the TLTIA and the proposed rules will be included in an update of our book Guide to Registering Trademarks prior to their going into effect on October 30. The proposed rules can be seen at: http://www.uspto.gov/web/offices/com/sol/tmlwtrty/index.html EXPRESSIVE SOFTWARE Bernstein, v. U.S. Department of Justice, et al. (Ninth Cir. - May 6, 1999) Plaintiff Daniel J. Bernstein, first as a student and then as a professor has taken on the entire array of Federal government agencies dealing with encryption and won. He is a professor in the Department of Mathematics, Statistics and Computer Science at the University of Illinois at Chicago. He developed an encryption program called SNUFFLE. He published SNUFFLE in a standard scientific paper containing analysis and mathematical equations and two computer programs written in C. At a later date, he also wrote a set of instructions in English which essentially translated his source code verbatim into prose. Seeking to publish rather than perish, Bernstein asked the State Department whether he needed a license to publish SNUFFLE in any of its various forms. The State Department responded that SNUFFLE was a munition under the International Traffic in Arms Regulation (ITAR) even though it was a form of encryption not covered by its regulations. Bernstein sued to be allowed to publish his work and the State Department then clarified its earlier determination, explaining that while ITAR did restrict the source code and the instructions, it did not restrict the underlying paper as to the method. The District Court found that the source code itself was speech protected by the First Amendment that the ITAR regulations were a prior restraint on speech. It granted summary judgment to Bernstein. After responsibility for encryption was switched from the State Department to the Department of Commerce, Bernstein amended the complaint and the District Court found that the Department of Commerce regulations were also a prior restraint. The Ninth Circuit confirmed that export restrictions on encryption source code constitute a prior restraint in violation of the First Amendment since their source code was an expression under the First Amendment. It noted that source code was a high-level language that was meant to be read and understood by humans and that it can be used to express an idea or method. Before a machine can use it, the source code must be translated to low level or machine language. In the footnotes, it did note that SNUFFLE was merely built as a demonstration rather than a working encryption program and that it was produced, in part, as an attack on the then-current ITAR regulations. The Ninth Circuit did note that the decision was a quite narrow one. It specifically did not hold that all software is expression. Inadvertently, the opinion did display a small part of the source code involved. YES, A METHOD OF BUSINESS REALLY IS PATENTABLE AT&T Corp. v. Excell Communications, Inc., et al. (Fed. Cir. - April 14, 1999) In our August 10, http://www.ipcounselors.com/19980810.htm) we discussed the State Street Bank case. Here, the Federal Circuit reaffirms its message to the patent bar and the District Courts. AT&T owned a patent (U.S. Patent No. 5,333,184) to provide message records for long distance phone calls which is enhanced by adding a primary inter-exchange carrier indicator. Such an indicator aids long distance carriers in providing differential billing treatment for its subscribers depending on whether a subscriber calls someone with the same or a different long distance carrier. Claim 1 reads: 1. A method for use in a telecommunications system in which interexchange calls initiated by each subscriber are automatically routed over the facilities of a particular one of a plurality of interexchange carriers associated with that subscriber, said method comprising the steps of: generating a message record for an interexchange call between an originating subscriber and a terminating subscriber, and including, in said message record, a primary interexchange carrier (PIC) indicator having a value which is a function of whether or not the interexchange carrier associated with said termination subscriber is a predetermined one of said interexchange carriers. This is all done using conventional computer hardware. The District Court invalidated AT&T's patent on the ground that it did not contain statutory subject matter. In line with the State Street Bank case, the Court found that there was indeed the requisite subject matter under Section 101 of the Patent Act. As pointed out in State Street, the Court felt that any step-by-step process, be it electronic, chemical or mechanical, involves an algorithm in the broad sense of the term. Given this, any judicially defined prescription against patenting of a mathematical algorithm to the extent such a prescription still exists, is narrowly limited to the mathematical algorithms in the abstract. The Court then goes on to discuss the manipulation of numbers as a fundamental part of computer technology. It confirmed the State Street Bank finding that the business method exception and the mathematical algorithm exception were severely limited or, in fact, eliminated. The decision can be reviewed at: http://www.ll.georgetown.edu/Fed-Ct/Circuit/fed/opinions/98-1338.html THE GREAT PRETENDER Robi v. Reed et al. (Ninth Cir. - April 2, 1999) If you are of the right age, you remember "The Platters" and their hits such as "The Great Pretender." The Defendant founded "The Platters" in 1953, acted both as manager and one of the group's original singers. Singers came and went. In 1954 Paul Robi began performing with the group. Robi then married the Plaintiff, who has never performed with the group. Robi severed his relationship with the group in 1965 when he was convicted of a felony narcotics possession and never returned after serving his time. Over the years much litigation has ensued about the right to use "The Platters" name. Robi executed a written trademark assignment transferring his rights in "The Platters" to his wife, the Plaintiff. The Plaintiff began managing, booking and presenting a singing group she calls "The Platters." This group lacked any original members of "The Platters." Plaintiff's group was in competition with Defendant's group also called "The Platters." Plaintiff sued. Defendant cross-sued as to ownership of the service mark "The Platters." The Plaintiff's rights were, of course, derivative from the rights of her husband. The State Court had already found that, until January 1956, the name "The Platters" was owned by the five individuals comprising a group as a partnership. The group included both the Defendant and Robi. Defendant had used the name continuously since the 1950s and asserted his rights to the name since the 1980s. On the other hand, the Plaintiff only began using the mark in 1998. The Ninth Circuit found that members of a group do not retain the rights to use the group's name when they leave the group. A person who remains continuously involved in a group and is in a position of control, retains the right to the use of the mark. That person may be a manager rather than a performer. As between Plaintiff and Defendant, it is clear that Defendant is the person who has maintained continuity with the group in his position to control the quality of its services. THE BUTTHOLE SURFERS Walthal, et al. v Corey Rusk, et al. (Seventh Cir. - March 26, 1999) For the unenlightened, Butthole Surfers is not a new perversion, but the name of a "musical" group with hits such as "The Shah Sleeps in Lee Harvey's Grave" and "Chewin' George Lucas' Chocolate." In 1984 they entered into an agreement with Defendant for the manufacture and sale of Butthole Surfers' musical performances in return for 50% share of the net profits. However, putting things in writing was not one of the Butthole Surfers' modus operandi. In this context, the Judge quoted Yogi Berra's statement, "A oral contract isn't worth the paper it's written on." Defendant produced a number of records and a video under the agreement. However, in December 1995, the Surfers demanded that the agreed 50-50 split be changed to an 80-20 split in their favor. When this demand was not met, the Surfers terminated the agreement. Defendant continued to copy and sell the performances which resulted in the present suit for copyright infringement. The primary issue in the case involved an interpretation of Section 203 of the Copyright Act. The issue was whether the statute establishes 35 years as a minimum or a maximum term of a grant. The Court noted it is either an attempt of the statute to ensure that regardless of the term of the agreement between the copyright holder and the licensee, the agreement can nevertheless be terminated after thirty-five years or whether no agreement can be terminated until 35 years have passed or something in between these extremes. There is only one case in point in the Ninth Circuit, there the Court found that a license granted a 35-year minimum. The Court disagreed and found that it made no sense that a 35-year period be considered a minimum under the statute. The Court made a finding that the license agreement was "kaput." The decision can be viewed at: http://www.kentlaw.edu/7circuit/1999/mar/98-1659.html |
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