Latest Posts at InnovationLawBlog.org<title> <style type="text/css"> body {font-family:Verdana,Geneva,Arial;font-size:13px;line-height:1.5em;margin:10px 25px;padding:0px;} a {color:#0072BC;font-size:11px;font-weight:bold;text-decoration:none;} a:hover {text-decoration:underline;} p {margin:2px 0px;padding:0px;} .day {border-bottom:1px dotted #000;padding:5px 0px;} .date {font-weight:bold;} .author {color:#666;} </style> </head> <body> <div class="day"> <div class="date">Featured Post</div> <div class="title"><a href="http://innovationlawblog.org/2012/02/google-announces-new-privacy-policy/" target="_top">Featured: Google Announces New Privacy Policy</a></div> <div class="author">By: <span class="name">William Wu</div> <div class="excerpt"> <p>Last week, Google announced its new privacy policy, which will take effect on March 1. Google is doing away with the over 60 different existing privacy policies for its various products and replace them with one single shorter and simpler privacy policy. Those who are most affected by this change are people with Google accounts. [...]</p> <p style="text-align:right"><a href="http://innovationlawblog.org/2012/02/google-announces-new-privacy-policy/">Continue reading...</a></p> </div> </div> </div><div class="day"> <div class="date">February 6, 2012</div> <div class="title"><a href="http://innovationlawblog.org/2012/02/apple-v-samsung-this-time-its-global/" target="_top">Apple v Samsung: This Time It’s Global</a></div> <div><p>“The United States district court is a public institution, and the workings of litigation must be open to public view,” Justice Alsup wrote in an October order in <em><a href="http://www.reuters.com/article/2011/12/02/us-apple-samsung-secrecy-idUSTRE7B030420111202">Oracle America, Inc v. Google Inc</a></em>. Yet this is not the approach of U.S. District Judge Lucy Koh and U.S. Magistrate Judge Paul Grewal, who have not only granted many of Apple and Samsung’s sealing motions, but in some cases have gone even further. During an October hearing on the proposed injunction, <a href="http://www.reuters.com/article/2011/12/02/us-apple-samsung-secrecy-idUSTRE7B030420111202">Koh was unprompted</a> when she asked Apple and Samsung if they wanted to seal the courtroom.</p> <p>This level of secrecy prevents academics, lawyers, and other curious bystanders from the cottage industry of prognosticating the results of the trial. Perhaps the best alternative is to look at the recent decision by the German courts applying EU law in an effort to draw some conclusions that could apply to the American ruling.</p> <p>Writing on the Microsoft Antitrust prosecutions in the US and EU, <a href="Erasmus%20Law%20and%20Economics%20Review%202,%20no.%201%20(March%202006),%2071">John Jennings at Spencer Fane Britt & Browne LLP</a> explains the difference between the two jurisdictions:</p> <p><em>Although US antitrust law contains substantial parallels to its EU counterpart, the enforcement of these laws often differs in the two jurisdictions. EU antitrust law largely derives from Articles 81 and 82 of the EC Treaty. Article 81 prohibits cartels and “concerted practices” that distort competition, such as price fixing, production limits, and dividing market share. Article 82 prohibits dominant businesses from using their market share to leverage other markets, engaging in predatory pricing, excessive pricing, price discrimination and some forms of resale price maintenance, or generally abusing their market position. These Articles roughly comport with Sections 1 and 2 of the Sherman Act, respectively. While these provisions appear similar, most commentators acknowledge that US antitrust law aims to promote competition, while EU law attempts to protect competitors.</em></p> <p>Indeed this dichotomy between protecting competitors in the EU and protecting competition in the US looks likely to apply to the current litigation involving Apple and Samsung over 3G/UMTS patents.</p> <p><strong>The EU Litigation</strong></p> <p>It is under Article 102 TFEU (ex Article 82 TEC, noted above) that the EU has begun investigations regarding Samsung’s licensing fees to Apple. The article reads,</p> <p><em>Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.</em></p> <p><em>Such abuse may, in particular, consist in:</em></p> <p><em>(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;</em></p> <p><em>(b) limiting production, markets or technical development to the prejudice of consumers;</em></p> <p><em>(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;</em></p> <p><em>(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.</em></p> <p>On February 3rd, 2012, the <a href="http://www.businessweek.com/news/2012-02-03/motorola-mobility-wins-second-german-ruling-against-apple.html">Mannheim Regional Court</a> found Apple infringed a patent used to synchronize e-mail accounts. Presiding Judge Andreas Voss said in delivering the ruling. “The court has come to the conclusion that the wording of the patent does cover functioning that were at issue here,” said Voss. Apple “wasn’t able to convince the court that it isn’t infringing.” <a href="http://9to5mac.com/2012/02/03/that-was-fast-german-ban-on-apple-3g-product-lifted-due-to-frand-status-of-patents/">Yet just a few hours later</a>, Apple was granted an injunction against the ruling based on the fact that the technology used by Samsung and Motorola were not being licensed to Apple at a reasonable rate.</p> <p>Now the EU has launched a probe into Samsung’s licensing fees based on allegations that the company has violated <a href="http://www.steptoe.com/assets/htmldocuments/2011_5_The European Commission%E2%80%99s New Horizontal Co-operation Guidelines Good Faith Disclosure and FRAND Commitment in the Context of Standardization Agreements.pdf">FRAND</a> (“Fair, Reasonable, and Non-Discriminatory”) terms of 1998 which dictate that participants undertake that their IPR, if incorporated into the standard, will be accessible on fair, reasonable and non- discriminatory terms and conditions. In essence, the FRAND commitment constitutes a restriction on the IPR holder’s ability to freely set royalties for the use of its IPR by third parties.</p> <p><a href="http://www.slashgear.com/apple-sales-injunction-suspended-german-ipadiphone-sales-resume-03211975/">Apple alleged</a> that Motorola repeatedly refused to license this patent to Apple on reasonable terms, despite having declared it an industry standard patent seven years ago. This injunction by the German court brings Samsung the unwanted attention of the European Commission on Antitrust as the legal battles between the two companies have heretofore dealt mostly with patent issues. This shift towards FRAND standards places Samsung and Motorola under the Commission microscope. Apple on the other hand, comes out relatively unscathed, as their patent issues do not fall under any <a href="http://www.telegraph.co.uk/technology/samsung/9051837/Samsung-faces-EU-competition-probe-over-Apple-attack.html">FRAND-pledged standards</a>.</p> <p><strong>The US Attitude</strong></p> <p>Samsung’s allegations of infringement have forced the Seoul-based tech giant to outline the technology they feel Apple has unfairly taken from them. However, in doing so they have also exposed the manner in which they license said technology.</p> <p>Any antitrust holdings against Samsung and Motorola in the EU will likely have more serious consequences than private patent conflicts. When the Commission issued a decision on the Microsoft antitrust case in 2004 regarding their violation of Article 82, amongst other orders it fined the software company €497.2 million (~$650M CDN). While Samsung’s potential antitrust infringements will likely not garner such substantial fines – if indeed they are held to be in violation of FRAND agreements – it should be noted that the German courts have already ordered over €100 million bonds for injunction enforcement. The patent and antitrust issues are worth a great deal to both sides of the table, but the costs surrounding the antitrust issues in Europe should not be underestimated. In the US, on the other hand, a decidedly more pro-business attitude indicates a greater emphasis on the patent battle rather than antitrust issues.</p> <p>The EU attitude, a result of zealous enforcement of antitrust laws by the former Competition Commissioner Mario Monti who served from 1999 until 2004, has not been mimicked on the other side of the Atlantic. Rather than a series of fines (and additional fines for noncompliance amounting to €2M per day as in the EU) the US approach focused more on negotiations between Microsoft and the Justice Department. Judge Kollar-Kotelly accepted nearly all elements of the November 2001 agreement and within 3 years, all other States had followed suit (with Massachusetts the final holdout until June of 2004). The agreement placed an emphasis on the user experience and most of the issues with Microsoft bundling its software were dealt with by giving purchasers to manually delete Microsoft software from their computers.</p> <p><strong>Conclusion</strong></p> <p>Ultimately this comparison between the EU and US approach to antitrust litigation may not give us any greater insight into the current litigation in California. However, using a broad-strokes application of the two jurisdiction’s attitudes it is likely that Apple and Samsung will reach a settlement in the US, and any antitrust issues will be dealt with by the parties making specific technological concessions. Of note in the US litigation will be whether Apple leverages Samsung’s potential Article 102 woes in the EU to gain greater traction as the two move towards that settlement. In doing so we may see the different attitudes create a sort of balance for multinational companies. But of course, with the shroud of secrecy that hangs over the US proceedings, that analysis will have to wait until the facts of the dispute are made public.</p> <p><strong>UPDATE:</strong> So what are reasonable licensing terms? Today the <a href="http://online.wsj.com/article/SB10001424052970204136404577207412683318278.html">Wall Street Journal</a> reports that Motorola is requesting approximately 2.25% in royalties from Apple, or about $1 billion for the iPhone manufacturer, likely as a way to force a settlement.</p> </div> </div><div class="day"> <div class="date">January 24, 2012</div> <div class="title"><a href="http://innovationlawblog.org/2012/01/ontario-court-of-appeals-recognizes-tort-of-invasion-of-seclusion/" target="_top">Ontario Court of Appeal Recognizes Tort of “Invasion of Seclusion”</a></div> <div><p style="text-align: left;">In its recent ruling in <a href="http://www.ontariocourts.on.ca/decisions/2012/2012ONCA0032.htm"><em>Jones v Tsige</em></a>, the Ontario Court of Appeal formally confirmed the existence of an actionable cause for invasion of seclusion. While the tort of appropriation of personality has long been recognized in Ontario, this appellate decision is the first in the province to give an unequivocal right of action based on breach of privacy. The court surveyed the relevant common law and statutory landscape in Ontario, other provinces, US, and Commonwealth, as well as Charter jurisprudence with respect to the protection of privacy rights. It concluded that “[r]ecognition of such a cause of action would amount to an incremental step that is consistent with the role of this court to develop the common law in a manner consistent with the changing needs of society”.</p> <p style="text-align: left;"><span id="more-2373"></span></p> <p>The case involved two Bank of Montreal employees who did not know each other but shared a tangled domestic relationship – the defendant Tsige was in a common-law relationship with the ex-husband of the plaintiff Jones. Tsige used unauthorized means to look into the banking records of the plaintiff Jones at least 174 times over a period of four years. In the statement of claim, Jones asserted that her privacy interest in the confidential banking information had been irreversibly destroyed. Jones claimed damages of $70,000 for invasion of privacy and breach of fiduciary duty, and punitive and exemplary damages of $20,000. The motion judge had granted summary judgment dismissing Jones’ claim for damages on the ground that Ontario does not recognize the tort of breach of privacy and that the expansion of privacy rights should be done via statute.</p> <p>The Court of Appeal adopted Professor Prosser’s view in his 1960 article “<a href="http://www.californialawreview.org/assets/pdfs/misc/prosser_privacy.pdf">Privacy</a>“, which argued that a four-tort catalogue emerged in common law with respect to protection of privacy interests.</p> <blockquote><p>1. Intrusion upon the plaintiff’s seclusion or solitude, or into his private affairs.</p> <p>2. Public disclosure of embarrassing private facts about the plaintiff.</p> <p>3. Publicity which places the plaintiff in a false light in the public eye.</p> <p>4. Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.</p></blockquote> <p>Any right of action that Jones may have was found to fall under Prosser’s first category of tort, namely the invasion of seclusion. This tort was further defined by the <em>Restatement (Second) of Torts. </em>“One who intentionally intrudes, physically or otherwise, upon the seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of his privacy, if the invasion would be highly offensive to a reasonable person.”</p> <p>A canvassing of Ontario case law showed that despite some inconsistent rulings, the courts are not closed to the idea of allowing an action in tort of intrusion upon privacy. In <a href="http://www.canlii.org/en/on/onsc/doc/2006/2006canlii202/2006canlii202.html"><em>Somwar v. McDonald’s Restaurants of Canada Ltd</em></a>, the Superior Court of Justice refused to strike a pleading of invasion of privacy as lacking a valid cause of action. The Court Appeal approvingly cited Stinson J’s dictum from that case, which pointed out that traditional torts were becoming increasingly inadequate in protecting privacy interests in light of rapid technological development.</p> <p>In rejecting the motion judge’s decision to grant summary judgment against Jones, the court found that the motion judge’s reliance on <a href="http://www.canlii.org/en/on/onca/doc/2005/2005canlii33024/2005canlii33024.html"><em>Euteneier v Lee</em></a> for the proposition Ontario law excludes all claims for breach of privacy was misplaced. The statement relied on by the motion judge – “[the plaintiff] properly conceded in oral argument before this court that there is no ‘free standing’ right to dignity or privacy under the <em>Charter</em> or at common law” – was not meant to be dispositive regarding the existence of a privacy tort.</p> <p>The Court of Appeal also drew on Charter jurisprudence to bolster the case for confirming the new tort. “The Supreme Court of Canada has consistently interpreted the <em>Charter’s</em> s. 8 protection against unreasonable search and seizure as protecting the underlying right to privacy”. Furthermore, case law demonstrates that the Supreme Court has recognized the right to informational privacy, a right that is distinct from personal and territorial privacy.</p> <p>The court refuted the proposition that in light of existing privacy legislation, it is not open to the court to adapt the common law to deal with the issue. Sharpe J.A., writing for the court, saw no intent by the legislature to halt the development of common law in this area. On the contrary, the lack of precise definition in the existing provincial privacy statutes was seen as leaving room for the court to delineate the proclaimed general right of privacy.</p> <p>To define the elements of the tort, the court adopts the above mentioned definition of intrusion upon seclusion from the <em>Restatement (Second) of Torts.</em> The key features of this cause of action are:</p> <blockquote><p>[T]he defendant’s conduct must be intentional, within which I would include reckless; second that the defendant must have invaded, without lawful justification, the plaintiff’s private affairs or concerns; and third, that a reasonable person would regard the invasion as highly offensive causing distress, humiliation or anguish.</p></blockquote> <p>To prevent opening the floodgate, Sharpe J.A. takes care to emphasize that the objective reasonable person standard is applied to determine those highly offensive intrusions covered by the tort. He also gives examples of private matters that may be the subject of such intrusion: “financial or health records, sexual practices and orientation, employment, diary or private correspondence “. The protection of freedom of expression and freedom of press is yet another limitation on the right to privacy.</p> <p>In terms of damages, the court holds that proof of actual loss is not an element of the cause of action. Where no pecuniary loss is provable, the loss is then treated as a “symbolic” or “moral” loss. As a guideline, damages “should be modest but sufficient to mark the wrong that has been done”, with a range of up to $20,000. Considerations outlined by the Manitoba <a href="http://web2.gov.mb.ca/laws/statutes/ccsm/p125e.php"><em>Privacy Act </em></a>are cited as a useful guide. Though the court does not exclude aggravated or punitive damages for exceptional cases, they are not encouraged since “predictability and consistency are paramount values in an area where symbolic or moral damages are awarded and absent truly exceptional circumstances, plaintiffs should be held to the range I have identified”.</p> <p>This case was found to fall into the midpoint in terms of damages. It was a highly offensive intrusion upon seclusion resulting in mental distress, but no public humiliation or harm to the plaintiff’s position. The defendant also showed remorse and tried to make amends. Damages in the amount of $10,000 were awarded. No aggravated or punitive damages were assessed due to the absence of of exceptional circumstances.</p> <p>As is the case with incremental changes in common law, a number of questions remain. For instance, to what extent will the freedom of expression and press be applied to limit the right to privacy? How will the right manifest itself in the employment context, where it may be difficult to identify which activities and correspondences are legitimate privacy interests? While the court has signaled a clear willingness to provide additional privacy protection to keep up with the changing social reality, it remains to be seen how the test from <em>Jones v Tsige</em> is to be applied in subsequent breach of privacy cases.</p> </div> </div><div class="day"> <div class="date">January 17, 2012</div> <div class="title"><a href="http://innovationlawblog.org/2012/01/is-sopa-dead/" target="_top">Is SOPA Dead?</a></div> <div><p>The story of the Stop Online Piracy Act (SOPA) and its sister act, Protect IP Act (PIPA) has been an intriguing and increasingly polarizing one. As Sarit wrote a few days ago, the increasing pressure from tech companies has forced the White House to come out against certain provisions, such as the DNS blocking provision in SOPA and other measures that would “tamper” with the underlying security measures of internet infrastructure.<span id="more-2366"></span></p> <p>Following this, <a href="http://www.washingtonmonthly.com/political-animal/2012_01/putting_sopa_on_a_shelf034765.php">Majority Leader of the House Eric Cantor announced yesterday that a vote on SOPA would not be held </a>until there was “consensus” on the issue, indefinitely postponing further hearings. Many pundits have claimed victory over the bill, which would have had significant impacts on tech companies and given federal authorities great control over the accessibility of websites on the internet.</p> <p>Nonetheless, several major websites including <a href="http://arstechnica.com/tech-policy/news/2012/01/wikipedia-to-join-reddit-in-sopa-blackout-wednesday.ars?utm_source=rss&utm_medium=rss&utm_campaign=rss">Wikipedia</a>, <a href="http://blog.reddit.com/2012/01/stopped-they-must-be-on-this-all.html">reddit</a>, and <a href="https://twitter.com/#!/flamsmark/status/158996160718176256">Mozilla</a> are still planning to go ahead with a <a href="http://sopastrike.com/">full site blackout</a> (dubbed “The Internet Strike”) tomorrow (Jan 18) in protest of SOPA and related legislation. Despite the announcements that the bill would be shelved, critics refused to back down, and it appears that the proposed legislation has set into motion a series of events that cannot easily be stopped.</p> <p>Many observers have noted that this is just one battle in an ongoing war between the entertainment lobby and the tech industry and consumers. Further, no announcement has been made by the Senate regarding PIPA, which is still <a href="http://www.pcworld.com/businesscenter/article/248089/sponsor_protect_ip_act_may_be_amended_in_response_to_concerns.html">scheduled for debate beginning on January 24</a>. The Motion Picture Association of America (MPAA) along with the Chamber of Commerce <a href="http://www.politico.com/news/stories/0112/71534.html">struck a conciliatory note yesterday</a>, but still urged Congress to continue work on the bill.</p> <p>Although the most controversial provisions have been dropped, it is still likely that the entertainment industry will get their wish, including tougher sanctions on linking to copyright infringing content and restrictions to the flow of digital information. The lobbyists supporting the bill have already spent over <a href="http://venturebeat.com/2011/12/19/sopa-lobbying/">$2.5 million on the bill</a>, and are outspending the tech lobby by more than a 3:1 ratio – it is not likely they will give up quickly.</p> <p>For its part, dropping the issue temporarily may work for them in the long term if they make the appearance of addressing tech concerns, while re-introducing it following the upcoming Presidential election may allow it to fly under the radar. As for the politicians, neither Obama nor Romney (the presumptive leading Republican candidate right now) have “officially” come out against the bills. Reading between the lines of the White House press release, it appears they still support copyright legislation in principle, as long as there is more consultation and bipartisan support. Romney <a href="http://merrimack.patch.com/articles/video-mitt-romney-slams-sopa#video-8809832">has been heard calling SOPA bad legislation</a>, but he has for the most part dodged questions about it and has not released an official position supporting or not supporting it.</p> <p>For the proposed reforms to be dropped entirely, much more pressure will be needed to sway the politicians in DC.</p> <p><strong>Update:</strong> <a href="http://judiciary.house.gov/news/01172012.html">Looks like SOPA hearings are scheduled to resume in February.</a></p> </div> </div> </body> </html>