Source: http://www.techlawjournal.com/alert/2006/02/22.asp
Timestamp: 2017-11-24 10:54:54
Document Index: 593853716

Matched Legal Cases: ['§ 2320', '§ 2320', '§ 2320', '§ 983', '§ 983', '§ 2320', '§ 2320']

TLJ Daily E-Mail Alert No. 1,315, February 22, 2006.
February 22, 2006, Alert No. 1,315.
Court Grants Cert in Case Involving Whether Patent Licensee in Good Standing Can Challenge Validity
2/21. The Supreme Court granted certiorari in MedImmune v. Genentech, a case regarding when a patent can be challenged. See, Order List [PDF] at page 4. See also, Supreme Court docket.
MedImmune wants to challenge the validity and enforceability of two Genetech patents. However, Genentech has licensed MedImmune, and MedImmune continues to pay royalties. The District Court and Court of Appeals held that the courts lack jurisdiction because there is no case or controversy.
The U.S. Court of Appeals (FedCir) issued its opinion [24 pages in PDF] on October 18, 2005. See also, MedImmune's petition for writ of certiorari [huge PDF file].
Genentech, Inc. states in its web site that it is a "biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs". City of Hope states in its web site that it is "biomedical research, treatment and educational institution dedicated to the prevention and cure of cancer and other life-threatening illnesses".
MedImmune is a licensee of Genentech and City of Hope of these patents. It continues to pay royalties. It is not under threat of suit from Genentech or City of Hope.
MedImmune filed a complaint in U.S. District Court (CDCal) against Genentech, City of Hope, and Celltech seeking a declaratory judgment that the patents are invalid and unenforceable as a result of the settlement of the patent interference. MedImmune also alleged violation of antitrust and unfair competition laws.
The Court of Appeals affirmed. Judge Pauline Newman wrote the opinion of the Court of Appeals, in which Judge Haldane Robert Mayer joined.
The Supreme Court order merely states that it has granted certiorari. The Court may revisit its 1969 opinion in Lear, Inc. v. Adkins, 395 U.S. 653.
This case is MedImmune, Inc. v. Genentech, Inc., et al., Sup. Ct. No. 05-608, a petition for writ of certiorari to the U.S. Court of Appeals for the Federal Circuit, App. Ct. Nos. 04-1300 and 04-1384. The Court of Appeals heard an appeal from the U.S. District Court for the Central District of California, Judge Mariana Pfaelzer presiding.
MedImmune is represented by Harvey Kurzweil of the New York City office of the law firm of Dewey Ballantine. Genentech is represented by Daniel Wall of the San Francisco office of the law firm of Latham & Watkins.
There is also a related pending petition for writ of certiorari, MedImmune, Inc. v. Centocor, Inc., et al., Sup. Ct. No. 05-656. See, Supreme Court docket, and June 1, 2005, opinion [12 pages in PDF] of the U.S. Court of Appeals (FedCir), App. Ct. No. 04-1499. In this case the District Court and Federal Circuit held that MedImmune, as a patent licensee in good standing, cannot challenge the validity or enforceability of that patent.
2/21. The Supreme Court granted certiorari in Global Crossing v. Metrophones, a case involving when a provider of payphone services may sue a long distance carrier to recover compensation that federal regulations obligate the carrier to pay. The Supreme Court wrote that "The petition for a writ of certiorari is granted limited to Question 1 presented by the petition." See, Order List [PDF] at page 4. See, also Supreme Court docket and September 8, 2005, opinion [34 pages in PDF] of the U.S. Court of Appeals (9thCir). This case is Global Crossing, Inc. v. Metrophones, Inc., Sup. Ct. No. 05-705, a petition for writ of certiorari to the U.S. Court of Appeals for the 9th Circuit, App. Ct. No. 04-35287.
2/21. The Supreme Court denied certiorari in Reuben v. BIPCO, a domain name dispute involving the domain bellessouth.com. See, Order List [PDF] at page 6. This case is Norman Reuben v. Bellsouth Intellectual Property Corporation, Sup. Ct. No. 05-718, a petition for writ of certiorari to the U.S. Court of Appeals for the 11th Circuit. The Court of Appeals heard an appeal from the U.S. District Court for the Northern District of Georgia, D.C. No. 1:02-cv-02231-BBM. Bellsouth wins.
2/21. The Supreme Court denied certiorari in OZ Optics v. Dimensional Communications, a contract dispute between OZ (a fiber optic communications equipment maker) and Dimensional (a trade show company). See, Order List [PDF] at page 25. This lets stand the opinion [9 pages in PDF] of the U.S. Court of Appeals (3rdCir). This case is OZ Optics, Ltd. v. Dimensional Communications, Inc., Sup. Ct. No. 05-789, a petition for writ of certiorari to the U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 04-1817.
2/21. The Supreme Court denied certiorari in Key v. Directv, a discovery abuse sanctions case. See, Order List [PDF] at page 6. This lets stand the unpublished opinion [2 pages in PDF] of the U.S. Court of Appeals (4thCir), which affirmed the District Court's imposition of discovery sanctions against Keys' attorney. This case is Larry Key v. Directv, Inc., Sup. Ct. No. 05-737, a petition for writ of certiorari to the U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 04-1256.
Senate Approves Bill to Criminalize Trafficking in Counterfeit Marks
2/15. The Senate amended and approved HR 32, the "Stop Counterfeiting in Manufactured Goods Act", by unanimous consent. This bill amends the Criminal Code with respect to trafficking in counterfeit marks, including wrappers, boxes and stickers.
The House approved an earlier version of the bill on May 24, 2005, by voice vote. See, story titled "House Approves Bill Regarding Trafficking in Counterfeit Marks" in TLJ Daily E-Mail Alert No. 1,141, May 24, 2005. One House Judiciary Committee staff member told TLJ on February 21 that he expects the House to take up the Senate version, "as early as next week".
Sen. Arlen Specter (R-PA) stated in the Senate that this bill "addresses a problem that has reached epidemic proportions as a result of a loophole in our criminal code: the trafficking in counterfeit labels. Criminal law currently prohibits the trafficking in counterfeit trademarks ``on or in connection with goods or services.'' However, it does not prohibit the trafficking in the counterfeit marks themselves. As such, there is nothing in current law to prohibit an individual from selling counterfeit labels bearing otherwise protected trademarks within the United States. This loophole was exposed by the Tenth Circuit Court of Appeals in United States v. Giles, 213 F.3d 1247 (10th Cir. 2000)."
Both the House and Senate versions of this bill make changes to 18 U.S.C. § 2320, which pertains to "Trafficking in counterfeit goods or services". For example, the bills both amend § 2320(a) to impose criminal liability upon anyone who "intentionally traffics or attempts to traffic in labels, patches, stickers, wrappers, badges, emblems, medallions, charms, boxes, containers, cans, cases, hangtags, documentation, or packaging of any type or nature, knowing that a counterfeit mark has been applied thereto, the use of which is likely to cause confusion, to cause mistake, or to deceive".
Then, the bills provide that "The following property shall be subject to forfeiture to the United States and no property right shall exist in such property: ... (B) Any property used, in any manner or part, to commit or to facilitate the commission of a violation of subsection (a)." This "subsection (a)" is a reference to § 2320(a), as amended.
This gives federal prosecutors broad authority to seize things. Sen. Arlen Specter (R-PA) and Sen. Patrick Leahy (D-VT), the Chairman and ranking Democrat on the Senate Judiciary Committee, stated in the Senate, for the benefit of prosecutors and judges interpreting this statute, that this broad forfeiture authority is intended to apply to the counterfeiters, and counterfeit things, and not to innocent auction web sites, search engines, and internet service providers whose servers and services may be used by counterfeiters.
The bill, as approved by the Senate, also provides that "The provisions of chapter 46 of this title relating to civil forfeitures, including section 983 of this title, shall extend to any seizure or civil forfeiture under this section. At the conclusion of the forfeiture proceedings, the court, unless otherwise requested by an agency of the United States, shall order that any forfeited article bearing or consisting of a counterfeit mark be destroyed or otherwise disposed of according to law." (Emphasis added.)
The Senate added the phrase "including section 983 of this title" to the language contained in the House version. 18 U.S.C. § 983 is titled "General rules for civil forfeiture proceedings". Subsection 983(d) contains the innocent owner defense. It provides, in part, that "An innocent owner's interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence." That is, this change clarifies that innocent auction web sites, search engines, and ISPs may rely upon the language of § 983(d) in any government § 2320 forfeiture action.
Sen. Leahy also discussed the relationship between counterfeiting and terrorism. He said that "Perhaps most disturbingly, the U.S. Customs Service reports that terrorists have used transnational counterfeiting operations to fund their activities: The sale of counterfeit and pirated music, movies, software, T-shirts, clothing, and fake drugs ``accounts for much of the money the international terrorist network depends on to feed its operations.´´''
The companion bill in the Senate was S 1699.
One of the differences between the House and Senate versions of HR 32 is the definition of "traffic".
The U.S. Chamber of Commerce stated in a release that "The Senate added an important provision to the bill to change the definition of ``traffic,´´ to that contained S. 1095, the Protecting American Good and Services Act, to ensure that all transfers of counterfeit goods may be penalized, even if the transfer occurs without the exchange of value."
The Chamber's Mike Zaneis stated in the release that "This modification would eliminate ambiguity in the current statute that allows counterfeiters to avoid punishment when they transfer counterfeit goods in exchange for some future benefit".
Effect Upon Internet Companies. Sen. Specter and Sen. Leahy discussed how the bill might affect internet companies.
(In the Congressional Record transcript, the Senators confusingly refer to the above quoted provision regarding forfeiture as "Section 2(bbb)(1)(B)" and "Section 2(b)(1)(B)". This language is found in Section 2 of the House version of the bill, and provides amended language for subsection (b)(1)(B) of 18 U.S.C. § 2320.)
Their discussion creates a legislative history that provides evidence of the intent of the Congress that the forfeiture provisions are not to be applied against innocent auction sites, search engines and internet service providers whose property is used to facilitate counterfeiting, or trafficking in counterfeit labels.
Sen. Specter (at right) stated that "When this legislation was sent over to the Senate from the House, concerns were raised to Senator LEAHY and myself about the language in Section 2(bbb)(1)(B) of this bill pertaining to the forfeiture authority of the U.S. Department of Justice. In focusing our attention to this section, we discussed the scope of the facilitation language, which parallels the drug and money laundering forfeiture language in 21 U.S.C. 853 and 18 U.S.C. 982, respectively, and how it might relate to Internet marketplace companies, search engines, and ISPs. Specifically, we were aware of concerns regarding the potential misapplication of the facilitation language in Section 2(b)(1)(B) to pursue forfeiture and seizure proceedings against responsible Internet marketplace companies that serve as third-party intermediaries to online transactions."
Sen. Leahy then responded that "Section 2(b)(1)(B) authorizes U.S. Attorneys to pursue civil in rem forfeiture proceedings against ``any property used, in any manner or part, to commit or to facilitate the commission of a violation of subsection (a).´´ The intent of this language is to provide attorneys and prosecutors with the authority to bring a civil forfeiture action against the property of bad actors who are facilitating trafficking or attempts to traffic in counterfeit marks. The forfeiture authority in Section 2(b)(1)(B) cannot be used to pursue forfeiture and seizure proceedings against the computer equipment, website or network of responsible Internet marketplace companies, who serve solely as a third party to transactions and do not tailor their services or their facilities to the furtherance of trafficking or attempts to traffic in counterfeit marks. However, these Internet marketplace companies must make demonstrable good-faith efforts to combat the use of their systems and services to traffic in counterfeit marks. Companies must establish and implement procedures to take down postings that contain or offer to sell goods, services, labels, and the like in violation of this act upon being made aware of the illegal nature of these items or services."
The two Senators engaged in a similar colloquy in the Senate on November 10, 2005, when the Senate approved S 1699. See, Congressional Record, November 10, 2005, at Page S12716.
Commerce Department Releases Report on IPv6
2/17. The Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) and National Telecommunications and Information Administration (NTIA) have released a report [83 pages in PDF] titled "Technical and Economic Assessment of Internet Protocol Version 6 (IPv6)".
The report states that "Although IPv6 is in the early stages of adoption, most network hardware, operating systems, and network-enabled software packages (e.g., databases, email, etc.) will likely include IPv6 capabilities within the next five years." (Parentheses in original.)
See also, story titled "House Government Reform Committee Holds Hearing on IPv6" in TLJ Daily E-Mail Alert No. 1,168, July 6, 2006.
With respect to the role of government, the report concludes that "industry should continue to take the lead in developing the IPv6 standards architecture, with coordination support and participation from government. Similarly, industry consortia and academic institutions should take the lead in conformance testing and development of interoperability solutions to support implementation, with support and participation from government. Finally, government has an important role to play as a consumer of IPv6 products and services and, therefore, must carefully evaluate the security and economic factors affecting adoption and assimilation of the new technology into federal IT systems. Private-sector decisions to purchase IPv6 products and services should be market driven, without influence from the federal government."
But, it continues that there are "market failures" that could "warrant government action to stimulate deployment of IPv6 in the United States". It elaborates that "Technological market failure refers to a condition under which either the producers and/or users of a technology underinvest relative to society’s optimal level of investment. Infratechnology research to support standardization, development of interoperability solutions, and conformance testing are all classic examples of where private returns on investment are not only less than social returns, but are below minimum private sector rates of return".
The report concludes that "the federal government will need to consider allocation of new resources and to work cooperatively with non-federal authorities and the private sector".
The report finds that "the transition to IPv6 may be a long process. Experts predict that long after most Internet users have migrated to IPv6, pockets of IPv4 may still exist in legacy systems. Hardware and software interoperability will be a key concern for enterprises wishing to interconnect their networks across heterogeneous environments. Interoperability needs will be a major consideration in an enterprise’s decision to adopt IPv6."
The report states that "ISPs and users will purchase IPv6-capable products during their normal equipment refresh cycles and that the costs of those products will be no greater than the costs of similar IPv4-only products. As a result, most of the costs that ISPs and users incur in turning on their IPv6 capabilities should be labor-related (e.g., staff training, installation, network testing)." (Parentheses in original.)
The report predicts that transition costs will be "relatively minimal" for individuals and entities that "do not operate their own significant network services". However, transition costs will be greater for government entities and large corporations.
8:30 AM - 4:45 PM. Day one of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Improving Spectrum Management through Economic or Other Incentives". See, notice. Location: National Academy of Sciences, Lecture Room, 2101 Constitution Ave., NW. The entrance at 2100 C St.