Wednesday, March 29, 2006

Woops, they did it again...

The Times of London reports that the EU commission has warned Microsoft that their practice of bundling more and more things into their operation system may, again, run afoul of EU Competition Law. This time the issue is with their already delayed and forthcoming Vista operating system, which is supposed to have an integrated internet search, DRM software and a program that will emulate what Acrobat does. What is more interesting is that it seems that the move against Microsoft is been prompted by the European Committee for Interoperable Systems, that groups some of the companies that were together with Microsoft into the push for the failed software patents directive. With friends like that...

Monday, March 27, 2006

Time to call eBay into account?

Several times eBay has been accused of facilitating trade in counterfeit products, illegal sale of restricted products, "electronic pimp", and now some fake and real Blue Peter badge are been sold there. The usual defense that eBay uses is stated in their user agreement and reads: "eBay is Only a Venue" and then goes explaining that they are not what they are supposed to be. (section 3 of the User Agreement) . But I think that that defense is running out of steam. eBay collects a fee for every item posted and then a percentage of the final sale, which makes them more than a simple venue, and for the same reason clearly the status of information service provider that provides a mere conduit, caching or hosting does not apply to it (see The Electronic Commerce (EC Directive) Regulations 2002, regs. 17, 18 &19).
We've seen some years where courts have applied, changed and twisted jurisprudence to suit the big corporations that are in the forefront of the digital economy and it seems that those old newly-created legal principles are starting to hunt the same businesses that were supposed to protect. Are we going to see any serious court action on the matter, or the old newly-created principle that states that "one infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it" (MGM v. Grokster) will be bent again to suit the big boys?

Thursday, March 23, 2006


Last week, from March 15 to 18, the Latin American Studies Association took place in San Juan, Puerto Rico. The LASA congress is one of the biggest academic conferences that exists and this one had more than 900 (yes, nine hundred) panels covering any aspect of Latin American studies.
Issues of IT, e-commerce and IP law were almost absent, but things may change. Within the section of Law and Society, which belongs to the Law, Jurisprudence and Society track, I have proposed a panel on The interaction between law and technology and its impact on society, for which the final title and the call for papers will soon be announced.

Monday, March 13, 2006

Winds keep blowing for patent holders in US

The US Supreme Court, faced with the question on "[w]hether, in an action under Section 1 of the Sherman Act, 15 U.S.C. § 1, alleging that the defendant engaged in unlawful tying by conditioning a patent license on the licensee's purchase of a non-patented good, the plaintiff must prove as part of its affirmative case that the defendant possessed market power in the relevant market for the tying product, or market power instead is presumed based solely on the existence of the patent on the tying product" in ILLINOIS TOOL WORKS INC., ET AL. V. INDEPENDENT INK, INC., found that "in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product" and vacated the decision of the Court of Appeals that held that "a rebuttable presumption of market power arises from the possession of a patent over a tying product".
While it seems that the Department of Justice's amicus is correct when notes that "a market participant's possession of a patent right, and the consequent statutory right to exclude infringing products from the market place, cannot give the participant market power if-as is usually the case- there are noninfringing alternatives to the patented product that qualify, in the economic sense, as good substitutes." However, it (un)surprisingly missed the fact that the possibility of producing noninfringing alternatives depends on the precision of the claims, and it is a proven fact that the USPTO approves more and more patents with very general, vague and ambiguous claims. But of course, one will have to go to court to establish that...and that is what the patent holders want...but wasn't the DoJ Antitrust Division's job to ensure that monopolies are not formed? Why to use time and resources to defend a patent holder? Isn't that ultra vires?

Saturday, March 11, 2006

The price of arrogance

The Fortune Magazine reports that "[o]n Feb. 10, Shenzhen's Netac Technology sued PNY Technologies of Parsippany, N.J., in federal court in Texarkana, Texas, alleging infringement of Netac's U.S. patent relating to USB flash memory drives. While the case may strike Americans as a man-bites-dog story -- a Chinese firm accusing a U.S. one of violating Chinese IP -- many specialists see it as a harbinger". But when the magazine's analysis focus on the lack of foresight from many American companies on China's swift industrial boom, what led them to miss the 30 months window that they have to file a patent in China after it has been granted in US, the success of their campaign to globalise the IP standards may explain a part of it. Having spent a considerable amount of money in lobbying for the internationalization of US IP standards, it seems (strangely) that this mega-companies have forgotten that IP rights are territorial rights. The situation described at the end of the Fortune's article, where an American company tries to collect royalties outside US from a domestic company on a US patent that it never got in that jurisdiction, is not completely new. Taking into account that those huge companies, as powerful as being the ones that dictated most of the US legislation on the topic and TRIPS, clearly can hire the legal expertise to know the basics of IP law (e.g. territoriality of the rights), ignorance cannot explain the described situation; arrogance could.

Monday, March 06, 2006

Discovering the gunpowder

CNN online reproduces an AP report that states that "[t]he U.S. Justice Department says it has launched an inquiry into possible price fixing in the burgeoning online music industry". It goes on saying that "[t]he Justice Department would not name the companies it has targeted. "The antitrust division is looking at the possibility of anticompetitive practices in the music download industry," spokeswoman Gina Talamona said Thursday."
Well, its seems that finally, after using a lot of resources to prosecute those that infringed on the "intellectual property" of the big companies, the Feds have realized that the uses and abuses of those intellectual property rights are the ones that deserve to be investigated.
Peter Drahos, in his Information Feudalism (Earthscan Ed., 2002), referred to the relation between intellectual property rights and cartels:

The Sherman Act proved to be a thorn in the side of big business over the
coming decades.

The presence of competition authority made the formation of international
cartels a riskier proposition. The Antitrust Division had lawyers on its staff.
Legal scheming to set up cartels could not longer be so transparent in the way
that the use of articles of association or the trust had been. These
contrivances were too easy for other lawyers to spot. Much denser legal thickets
were needed to hide cartels from the eyes of competition lawyers. These thickets
of rules also had to allow companies to fix price, control production and divide
territories among themselves. As Prindle and others familiar with patent law had
been arguing, patents offered large companies just these possibilities. Patents
were a legally recognized form of monopoly that gave inventors a strong form of
control over the production and price of the invention. Importantly,
restrictions over price and production could form part of the patent license
agreement. Such restriction were in many cases regarded by the courts as a
legitimate form of exploitation of a proprietary right. Attacking patent-based
cartels was far harder for a competition authority, for now it had to face the
argument that it was interfering in the use of private property. The legal
representatives of owners of large intellectual property holdings in the 20th
century worked very hard to remove the stigma of monopoly from intellectual
property. The knew that once the veil of private property was drawn over what
was essentially a state-granted monopoly privilege, it would be much harder
for public authorities to question the nature of the business arrangements that
individuals competitors reached with each other using those privileges. (page 51)

The same can be applied to the expansion that we are seeing in the rights of copyrights holders, so it was time for the Feds to look into it.

It is also true that not only the big companies lawyers are fuelling the expansion, there are many academic lawyers that are doing the same...

Friday, March 03, 2006

Internet child pornographer gets diplomatic immunity?

The Argentine newspaper Clarin reported that following a request from Interpol Department of the German Police, the Argentine Federal Police with a warrant issued by the District Court No 48 tried to search premises from where child pornography video were offered via Internet. Once there, the Police group was confronted by the suspect with the fact that he, as military attache to the Bolivian Embassy, had diplomatic immunity as established in the Vienna Convention on Diplomatic Relations of 1961. The judge of the case, correctly following current law, understood that she lacked jurisdiction to proceed with the case, and the prosecutor sent it to to the Argentine Supreme Court. Once there, the Supreme Court started the procedures to request the waive of immunity as established in the Art. 32 of the mentioned Convention. But isn't it too late? Child pornography is such a heinous crime that states should be allowed to use any means within its powers to combat it. By using his diplomatic immunity, the person who allegedly committed that crime has already left Argentine jurisdiction and it is also possible that using the diplomatic bag the physical evidence might have been removed, so following the aforementioned Convention the relations with Bolivia are safe...and the kids?
There is no much to discuss about the importance of the institute of diplomatic immunity, but, as with many other issues involving the use of new technologies, some principles need to be reviewed. The barrier that diplomatic immunity presents might also result in the suspect escaping prosecution completely, specially due to the destruction of evidence that the time granted while following the procedures established in Vienna would permit. Having been always a constitutional guarantist, it is difficult to propose that some procedural rules be expedited against a suspect, but it seems reasonable that in the case of child pornography and/or pedophilia in Internet speed to get the evidence should have preeminence.