"Verbatim copying"; a requirement for infringement rules US Court

You can copyright your words, not your ideas—and in an erudite opinion concerning two consulting firms duelling, a federal judge amplified that longstanding principle.
Judge William G. Young of the US District Court for the District of Massachusetts dismissed a copyright infringement suit brought by Situation Management Systems (SMS) against ASP Consulting Group, despite finding that that ASP did copy SMS’s workbooks.

“The ruling appears to limit claims of copyright infringement of business publications to instances of near verbatim copying,” said James J. Foster, a senior litigator with Wolf, Greenfield & Sacks, P.C., in Boston, which represented ASP.

“The backdrop to this suit is a bitter struggle between a company and its former employees,” Young wrote. Two ex-SMS employees, who helped create SMS’s workbooks, went on to become ASP’s cofounders. ASP charged that the pair infringed the copyright of three of its workbooks when they created similar SMS workbooks.

Young ruled that they did copy, but changed the wording sufficiently: “the copying is not actionable because ASP’s works are not substantially similar.”

Young’s witty 33-page decision quotes many sources on copyright and even tosses in a Shakespeare sonnet.

The Patent Reform Act [2007] and the Small Inventor [International]

A federal bill expected to receive a vote from the Senate this year would trigger the most radical changes to the U.S. patent system in more than 50 years. Supporters of the Patent Reform Act of 2007 want to switch to a “first-to-file” system that would grant patent rights to the first person to file an application. The United States is the lone country still using a “first-to-invent” system that rewards an inventor who first conceives the innovation, even if another person submits an earlier application.

The results can be costly, complex and time-consuming. When at least two people file an application on the same invention, the Patent Trademark Office conducts a trial, known as an interference proceeding, to determine the first inventor. Eliminating interferences and aligning the United States with the rest of the world are the main arguments for switching to a first-to-file system. But opponents argue the change would harm solo inventors and small companies, which account for about 45 percent of patent applications.

Here’s why: The new system would create a race to the Patent Trademark Office, and the entity most likely to win is the one with the most resources—corporations with deep pockets. They’re less concerned about filing fees and are more likely to file an application even though the commercial benefit of the technology may be risky. Small businesses, on the other hand, will wait to file until they’re certain a market exists for the product before committing funds for filing fees.

Filing fees range from $500 to $1,000. But navigating the lengthy process, which typically takes two to three years, often requires legal assistance. Attorney fees can push the costs for a simple invention to $20,000 and to $40,000 for a complex filing.

With 1.6 million active patents in the United States, the possibility of infringement has led to more litigation, particularly within the technology sector. Microsoft Corp. is among larger software developers that support a first-to-file system because the company is often forced to fend off infringement suits brought later by smaller competitors. Unlike the auto industry, for instance, in which large sums of money are necessary to produce an innovation, an independent inventor sitting at his kitchen table can develop software.

Some of the litigation stems from what is known as “patent trolling,” a term used to describe an individual or company that holds a patent with no intention of marketing an idea or making a product.

The patent holder instead waits for another company to develop a similar product and then threatens it with expensive patent-infringement lawsuits to extract large monetary settlements. Under the reform act, a new venue would provide a less expensive and more streamlined way to hash out disagreements. It would allow anyone to seek cancellation of an existing patent within a year of its approval. The proceeding, however, would be available only for patents issued after the date of the bill’s enactment.

The bill also would change how patent damages are calculated, including limitations on their availability for willful infringement. Proponents of changing the damage provisions argue that large patent awards are excessive compared to the actual value of the patent.

Further, budget limitations of not-for-profit universities often constrain the resources they can devote to rapidly filing patent applications, making it more difficult for them under a first-to-file system. Not everyone is convinced reform is needed. Pharmaceutical firms such as locally based Eli Lilly and Co. are satisfied with the current system and depend upon court injunctions to stop generic drugmakers from infringing upon their patents.

Indeed, from 1996 to 2006, the number of patent applications more than doubled from about 200,000 to 450,000, according to the PTO. Nearly 1.1 million applications are currently pending, and 760,000 of those still await first action. The average time it takes to get approval is 32 months.

To shave the backlog, the PTO hired 1,200 patent examiners in 2007 and has plans to employ 1,200 more examiners this year. Compounding the problem of delays is that the tedious work leads one of every two examiners to leave the job within the first year.

Is virtual life a lawless jungle: Role-playing, competition and trademark rights [International]

In video games, as in professional sports, the idea "for the love of the game" has lost much of its allure. Indeed, the industry is ripe for multimillion-dollar litigation. Witness, for example, the landmark $82-million U.S. jury award in 2005 against Sony Computer Entertainment America Inc. for infringing Immersion Corp.'s video-game patents.

Even arbitration awards, known for their conservatism, have been in the millions. In February, Ubisoft Entertainment won a $13.2-million award against MGA Entertainment for breach of a video-game licence agreement involving the popular Bratz dolls. MGM is involved in a high-stakes battle with Mattel over whether the toymaker actually created the dolls. The case is set for trial in the spring.

Most intriguing, however, are the unscripted games, called real-world games or virtual worlds. Examples include Active Worlds, Everquest, There, The Sims Online and Red Light Center. The most popular however, is Second Life, created and operated by Linden Research Inc., also known as Linden Lab.

The twist, from an intellectual property (IP) point of view, is that users, known as "residents," create most of the content. A three-dimensional modelling tool allows them to build virtual landscapes, buildings, vehicles, machines and other objects to use, trade and sell. Because residents own their creations, a thriving market economy using a synthetic currency -- "Linden dollars" -- freely convertible to real-world currency has emerged. It includes both a currency exchange and a stock exchange.

No surprise, then, that many household brands and other companies, including financial institutions, law firms, universities and professional organizations like the American Bar Association have a presence on Second Life. Countries such as Sweden, Estonia and the Maldives have even opened embassies there.

Companies go to Second Life to do business, test new products, advertise real-world goods and services, build brand awareness and showcase innovation. All of this means, however, that virtual worlds are ripe for intellectual-property disputes. The freedom that users have to create virtual assets makes it as easy for them to create and sell infringing items as it is to create original non-infringing items. It's equally simple for users to create digital replicas of real-world content branded with real-world trademarks.

But IP enforcement is elusive, because the law has yet to confront the divide -- or lack of it -- between real and virtual.

For example, it's unclear whether someone who commercializes a virtual copy of a patented real-world object commits patent infringement and if so, in which jurisdiction. It's also unclear whether someone who develops a trademark used only to identify virtual goods and services generates enforceable trademark rights in the real world. And it's not known whether making virtual use of a trademark, which can be confused with a real-world trademark, amounts to trademark infringement. But rights holders can't really stand around waiting for the courts to decide the law.

Eros, a company that created virtual beds that it sold to online users so they could have virtual sex, faced this problem when an unknown person created unauthorized replicas of the beds that it sold for a lower price. Eros identified the infringer, however, by obtaining court-ordered subpoenas directing Linden Lab and Internet service providers to release information about the anonymous defendant, who has since been identified.

Wikinomics - Ideagoras

So we’re on to the “ideagora” which, if you remember your Greek (I don’t) uses the word for market (agora) to produce something that means (surprise!) “idea market.”
So What?
And so it is. Don Tapscott tells the story of InnoCentive, an idea market launched by Eli Lilly in 2001. InnoCentive allows companies to post research problems that member scientists (who number more than 90,000 in 175 countries) can crack in exchange for cash rewards. A quick look at the InnoCentive site reveals that the current maximum reward is $1 million–quite a motivator. (The more relevant question, of course, is the average reward, which the site doesn’t reveal.)
The notion behind ideagoras seems to be to treat the world as a big part of your enterprise R&D lab. Use your internal R&D people–who understand your customers–to come up with the blue-sky ideas (we should sell platinum saltines!) and leave the down-to-earth problems (how do we get the salt to stick to the little squares?) for the ideagoras. Of course, one happy implication of this approach is that (other things equal) your R&D budget will shrink.
At the limit, Don Tapscott imagines a market of eBay-like proportions with people submitting both problems and solutions (patents) for general review and consumption. In his mind, such a market will drive innovation at a much faster pace than we’ve ever seen. I suspect that that’s probably true.
Now, one tiny problem with ideagoras (I feel we should get it out on the table) is that specifying a problem often presupposes a certain type of solution. In other words, getting the salt to stick might (to you) be a difficult materials science problem…but if it were reconceived as a chemistry problem, it might become easy. The unfortunate part is that you’re going to categorize the problem under “Materials Science” when you post it to the ideagora, and it’s possible that no chemist will ever see it.
In any case. Ideagoras seem to represent a powerful new approach to innovation and if you’re intrigued, I urge you to pick up Wikinomics and read about them in more depth. Not to do so…would be hubris.

Entrepreneur Investment Opportunities: Will Your Startup Idea Fly?

Entrepreneurs are constantly coming up with creative and innovative ways to identify investment opportunities, but how do you know if your startup idea has what it takes to get off the ground and soar? Use this investment opportunities checklist to ensure your startup idea has the strategy and substance for long-term success.

Before attempting to secure investment for your startup idea, you should be prepared with the answers for any questions that an investor may have. Use the following checklist to determine whether or not your startup has the wings to attract investment opportunities.

Technical evaluation questions for startups:
What are your competitive advantages, features and benefits?
Is your product high-quality, as verified through third-party results?
Is your business idea innovative and does it solve a current market need? Will your product/service require an educational component to teach customers about its features and benefits?
Is your product hard to imitate (high barriers to competitive entry)?
Is your product environmentally safe and in line with regulatory controls?
Have you checked the idea for faults or limitations?
How soon can your idea be put into operation?
Have you secured protection on your intellectual property?


Market evaluation questions for startups:
What is your unique selling proposition for quality, service and innovation?
What customer problems are you solving and in what market niche?
What is the demand for your product - seasonal, repeat sales, etc.?
What is your competition doing in this area?
Do you have established distribution channels?
How simple or complex will the idea's execution or implementation be?
Have you considered the possibility of user resistance and difficulties?
What is your key to marketplace differentiation (performance, design, quality, economy)?


Management evaluation questions for startups:
Is your management team experienced and educated in this industry?
Have they adopted an entrepreneurial attitude with a focus on results?
Does management see the big picture and also understand details?
Does the team have experience in all necessary areas (marketing, finance, management, production)?
Are you employing outside expert advisors (legal, accounting, etc.)?
Is there outside accountability (investors, board of directors)?


Economic evaluation questions for startups:
What is your up-front investment intensity?
Are you competing on innovation and quality and not just on price?
Do you have a handle on cash flow and overhead?
Are your financial projections realistic and demonstrating high margins and profitability?
Do you as the owner have a financial commitment and is management paid for performance versus title?
What immediate or short-range gains or results can be anticipated? Are the projected returns adequate and the risk factors acceptable?
What are the long-term investment opportunities for your startup?

With well thought-out, solid answers to these questions, you should be better prepared to present your company to potential investors and increase your chances of receiving the funding you need.

Indian patent filings lag behind global average

India lags behind the world average in patent filings, with its total number of filings by residents being just three per million people in its population, compared with the world average of 250, according to the World Intellectual Property Organization Patent Report: Statistics on Worldwide Patent Activity.

"The number of patents in force in India in 2004 was 6,406, while it was 182,385 in China, and the world average of patents in force in 2004 was 84,671, worked out on the basis of the world population (6,378 million), with the number of patents in force worldwide during 2004 being 5.4 million," according to the Indian federal ministry for commerce and industry.

The global patent numbers include those obtained in different countries for the same invention, therefore it is not possible to arrive at a conclusion on the proportion of patents in force in India vs. those in force worldwide. However, the number of patents in force in India was 6,857 in 2005, the ministry said in a statement.

The Indian government has in recent years tried to strengthen the processes that help create intellectual property rights with a scheme of modernization of intellectual property offices at a cost of nearly $40 million for infrastructure development, computerization, human resource development and training and awareness.

A National Institute of Intellectual Property Management is being set up in Nagpur in central India, with four regional offices and agreements reached with France, the United States, the U.K., the European Patent Office, Japan, Switzerland and Germany for cooperation in the field of intellectual property rights.

From Edison to iPod [New Text]

Fross Zelnick Lehrman & Zissu, a leading firm in the field of trademark, copyright, design and unfair competition law, has announced that firm partner, Larry Apolzon has co-authored with Fred Mostert “From Edison to iPod: Protect Your Ideas and Make Money,” a guide to demystifying intellectual property.

The book provides entrepreneurs, writers, artists, designers, musicians, inventors and other business professionals and creative people with practical information and tips to enable them to protect their creations. In everyday language, “From Edison to iPod” explains intellectual property including trademarks, copyrights, design patents, trade secrets and utility patents. In its review, Publishers Weekly noted, “The authors have boiled down their message so well that a single two-page chart serves as a terrific crib sheet for the entire resource.”

The publisher, DK Publishing, worked closely with the authors to present a varied and colorful display of creations that have become established icons accompanied by informative captions to inspire and guide the reader.

“One of the ‘golden rules’ that we set forth in the book is that ideas don’t put money in the bank and that creative entrepreneurs need to lay out their ideas and get them into action,” said Apolzon. “New products, content and brands are being introduced to the global marketplace overnight and making informed business decisions to efficiently and effectively safeguard such new creations is essential.”

Apolzon was elected to the partnership at Fross Zelnick in 1992. He counsels a broad spectrum of clients on the adoption, protection, use and enforcement of brands and new product and package designs. His clients range from major and independent record labels, celebrities and other media and entertainment ventures to luxury brand owners and manufacturers of an array of consumer products.

Co-author, Fred Mostert, is Chief Intellectual Property Counsel of the Richemont Group of Companies in London. The two authors have been colleagues for over 20 years and first worked together as associates at Fross Zelnick.

"From Edison to iPod: Protect Your Ideas and Make Money" [ISBN: 978-0-7566-2602-0] was released this month by DK Publishing.

Ideas behind computer games can be copied [Court of Appeal - United Kingdom]

General ideas and structures behind computer games and programs can be copied as long as the source code and graphics are not, the Court of Appeal has ruled.

The judgment upholds an earlier High Court ruling in a case involving three computer games simulating pool. Under UK copyright law and EU Directives, the court ruled that the ideas behind the games cannot be protected by copyright, because copyright does not protect general ideas.

"Merely making a program which will emulate another but which in no way involves copying the program code or any of the program's graphics is legitimate," said Lord Justice Jacob, who gave the Court's ruling.

Nova Productions produced Pocket Money, a game based on pool. Mazooma Games produced a game called Jackpot Pool and Bell-Fruit one called Trick Shot. Nova claimed that the other two developers had infringed its copyright by using similar elements in their games to those it used in Pocket Money.

Nova did not claim, though, that the source code of its game had been copied or that the graphics had been copied. Those actions would have been clear infringements of copyright.
The company did claim that there was an extra right in the imagery used in its game, something beyond the copyright attaching to individual images and related to its use of a power bar used to judge the strength of a pool shot and of a cue control mechanism.

"Mr Howe invited us to find that there was in effect a further kind of artistic work, something beyond individual freeze-frame graphics," said Jacob in his ruling. "This was said to be because there is a series of graphics which show the 'in-time' movement of cue and meter. So, it was said, that what the defendants had done was to create a dynamic 're-posing' of the Claimant's version – one in which the detail of the subjects had changed, but an essential artistic element of the original was carried through to the Defendants."

The Court found, though, that for copyright purposes the moving images must be taken as simply a series of still images, each of which has its own copyright protection.
"A series of drawings is a series of graphic works, not a single graphic work in itself," said Jacob. "No-one would say that the copyright in a single drawing of Felix the Cat is infringed by a drawing of Donald Duck. A series of cartoon frames showing Felix running over a cliff edge into space, looking down and only then falling would not be infringed by a similar set of frames depicting Donald doing the same thing. That is in effect what is alleged here."
On that count alone the Nova case would fail, said the judge, but he went on to rule on the other issues in the case.

He said that some copying of another person's work is permitted, and that to infringe copyright it must be 'substantial'.
Jacob also said that there are some parts of the creative process which are not protected by copyright law, which only gives legal protection to very specific things. "Not all of the skill which goes into a copyright work is protected – the obvious example being the skill involved in creating an invention which is then described in a literary work," he said. "An idea consisting of a combination of ideas is still just an idea. That is as true for ideas in a computer program as for any other copyright work."

On the protection of ideas, Jacob quoted an opinion he gave himself in an earlier case. "The true position is that where an 'idea' is sufficiently general, then even if an original work embodies it, the mere taking of that idea will not infringe," he said in that ruling in 1994. "But if the 'idea' is detailed, then there may be infringement. It is a question of degree."

The taking of a plot (i.e. the 'idea') of a novel or play can certainly infringe if that plot is a substantial part of the copyright work, he said in that dispute between Ibcos Computers and Barclays Mercantile.

The general nature of the ideas which Nova was seeking to protect was the downfall of its argument on the basis of literary copyright. "The appeal on literary copyright fails on the simple ground that what was found to have inspired some aspects of the defendants' game is just too general to amount to a substantial part of the claimants' game," said Jacobs. "The Judge's evaluation, far from being wrong in principle, was right when he said 'they are ideas which have little to do with the skill and effort expended by the programmer and do not constitute the form of expression of the literary works relied upon'."

The protection of such general ideas is not only not a part of copyright law or the relevant European directives, it is something that could be damaging to businesses, the Court of Appeal found.

"If protection for such general ideas as are relied on here were conferred by the law, copyright would become an instrument of oppression rather than the incentive for creation which it is intended to be," said Jacobs. "Protection would have moved to cover works merely inspired by others, to ideas themselves."

The decision backs a 2004 ruling in easyJet's favour after it was accused of infringing copyright in an airline booking system. The budget airline had commissioned a system that emulate the look and feel of another system built by a company called Navitaire. This was achieved without copying source code and the court rejected the main claim of infringement.