FCC Publishes New Privacy Rules for ISPs

Effective January 3, 2017, the FCC’s new rule, “Protecting the Privacy of Consumers of Broadband and Other Telecommunications Services,” establishes streamlined privacy guidelines applicable to Broadband Internet Access Service (“BIAS”) and all telecommunication carriers.  Prior to this rule, BIAS providers were not subjected to the same privacy standards as telecommunication carriers.  The new rule focuses on creating transparency, choice, and data security to provide “heightened protection for sensitive consumer information, consistent with consumer expectation.”

To promote transparency, the rule requires that carriers “provide privacy notices that clearly and accurately inform customers about what confidential information the carriers collect, how they use it, under what circumstances they share it, and the categories of entities with which they will share it.”  To promote choice, the rule allows customers to opt-in or opt-out of approval for the sharing of sensitive customer personal information.  To promote data security, carriers must “adopt security practices appropriately calibrated to the nature and scope of its activities, the sensitivity of the underlying data, the size of the provider, and technical feasibility.”

Another important aspect of the rule is the adoption of data breach notification requirements, which is particularly relevant considering recent data breaches of large United States companies (i.e. Target and Yahoo!).  Information regarding data breaches must be reported to the FCC, FBI, and Secret Service “within seven business days of when the carrier reasonably determines that a breach has occurred if the breach impacts 5,000 or more customers.”  Carriers are now required to notify affected customers without “unreasonable delay, but within no more than 30 days.”

While these rules are set to take effect January 3, 2017, its fate remains unclear with the Trump Administration taking control and Court challenges accepted until January 31.   However, the implementation of the rule should help protect consumers’ personally identifiable information and allow them to be more informed with what is collected and who it is shared with.

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How long is too long for a Non-Compete Restriction?

No Attorney’s Fees For BitTorrent Download Of “The Cobbler”

In relation to our recent Copyright Radio Show about the risk of copyright infringement liability stemming from illegal downloads, an Oregon Court declined to hold a BitTorrent Defendant responsible for Plaintiff’s attorney fees.  In Cobbler Nev., LLC v. Cerritos, the Plaintiff accused Defendant of violating the Copyright Act by using BitTorrent to illegally download Adam Sandler’s movie “The Cobbler” (based upon the reviews, a movie probably not worth risking a copyright infringement lawsuit for).  While the Defendant was found responsible for the minimum $750 in statutory damages, the Court denied Plaintiff’s motion for attorney’s fees, which would have subjected the Defendant to roughly $17,000 in additional damages.

In rejecting the Plaintiff’s motion, the Court noted that the “financial penalty of that [$750] magnitude is sufficient to deter [Defendant], as well as others, from illegally downloading movies in the future.”  The Court also commented on how awarding “Plaintiff its attorney’s fees in his case would only contribute to the continued overaggressive assertion and negotiation of these Copyright Act claims.”  Overall, allowing upwards of $17,000 in damages would counter the policies of the Copyright Act.

Decisions such as the one in Cobbler Nev., LLC v. Cerritos could mark a change in how illegal downloads are handled under the Copyright Act.  While it is generally agreed that illegal downloads are an issue, as this Court pointed out, “consumers who downloaded a single movie [should not] pay more than their share of the problem.”  Moving forward, it will be interesting to see how the diminished possibility of attorney’s fees under the Copyright Act will impact copyright infringement lawsuits for illegal downloads.

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Damages for Design Patent Infringement

On December 6, 2016, the U.S. Supreme Court reversed a damages award that Apple, Inc. won over Samsung Electronics Co., Ltd. in their longstanding patent fight.  See a copy of the full decision here.  Apple’s design patents were directed to specific elements of Apple’s iPhone.  The Supreme Court remanded the case to the Federal Circuit for further proceedings without actually decided how much money Apple was entitled to from Samsung.  In doing so, the Supreme Court reasoned that “article of manufacture” could be limited to a particular component of a product, regardless of whether that component is sold separate from the product as a whole.

 

The Supreme Court argued that an award of “total profit” must be made from the manufacture or sale of the “article of manufacture to which the design or colorable imitation has been applied.”  The Supreme Court defined an “article of manufacture” as a “thing made by hand or machine.”  As such, the infringing component could either the smartphone, itself, or a particular component within the smartphone.  Moving forward, it appears as though the following elements will be important in design patent infringement cases: (1) the scope of the design claimed in the plaintiff’s patent; (2) the relevant prominence of the design within the product as a whole; and (3) whether the design is distinct from the product as a whole.

 

Feel free to contact a Traverse Legal patent attorney today at 866-936-7447 to discuss your patent (utility or design) needs.

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Web Accessibility Lawsuits Increasingly Prevalent

Using and accessing private company websites is undoubtedly a daily occurrence and often a necessity.  But what happens if, because of a disability, a user is unable to access a website fully?  Under the Title III of Americans with Disabilities Act (ADA), “no individual shall be discriminated against on the basis of a disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or lease to), or operates a place of public accommodation.”  Due to disabilities such as blindness and deafness, the number of website accessibility lawsuits have increased dramatically.

In July 2016, southern grocery/pharmacy retailer Winn-Dixie was sued by a blind Plaintiff, Juan Gil, for violation of ADA Title III.  Particularly, Gil was interested in being able to order pharmaceutical refills online, but his website reading software was not compatible with the Winn-Dixie website.  Thus, Gil claimed that the Winn-Dixie website was inaccessible under ADA Title III.  In response, Winn-Dixie has asserted that their website is not a “place of public accommodation” because they are not a physical location. The Department of Justice intervened in the case to support Gil’s position that websites are subjected to ADA Title III.  Courts are split on the issue of whether the internet is included in the statute’s reach, and with a California state court recently finding an online retailer in violation of the ADA Title III under similar facts, it will be telling to see what direction the Winn-Dixie case goes.

To protect your company’s website from exposure to an ADA Title III lawsuit, it is important to be open to making your website as accessible as possible.  In a recent webinar – “The Road to Sustainable Corporate Accessibility” – John Foliot of Deque Systems commented that “[l]awsuits happen because somebody with a disability reached out to an organization to say that they were having problems, and the organization actually created or accelerated their frustration.”  Thus, it is wise to have procedures in place, particularly within your Terms of Use Agreement, explaining how to address the concerns of disabled individuals that reach out regarding the accessibility of your company’s website.  If you need help re-working your company website’s Terms of Use, Traverse Legal can help.

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Could Illegal Downloads Expose You to Copyright Infringement Liability?

Hello listeners! My name is Mallory Donick and I am a Copyright Attorney with Traverse Legal.  Today we are going to talk briefly about illegal downloads and the potential repercussions those downloads can have under copyright law.

It is safe to assume that most people have illegally downloaded something in their lifetime, typically music and movies.  We live in an increasingly connected world where file sharing is the norm, which makes access to free digital media easier than ever.  Because illegal downloading is so prevalent, many are led to believe that they won’t be the ones to get caught.  But, what happens if you do get caught?

As a quick refresher, copyright law protects original works of authorship fixed in a tangible medium, which includes digital copies of music and movies.  Copyright infringement occurs when someone reproduces, distributes, displays, or performs protected works without [the] author’s permission.  Thus, by downloading free, illegal digital media, copyright infringement is occurring.

Even if your free downloads are infringing copyright, you may still ask – how will they find me?  Well, the copyright owner can acquire your IP address as being associated with illegal downloads.  Armed with the IP Address, copyright owners file a “John Doe” lawsuit, which means that the Defendant has not yet been named.  Through the lawsuit process, copyright owners can subpoena your Internet Service Provider (“ISP”) to disclose your name and address.  After that, the copyright owner uses your contact information to send a threat letter asserting legal leverage and requesting payment.  In the event that the issue doesn’t get settled, you are potentially exposing yourself to a full-blown copyright infringement lawsuit.  That could mean getting slapped with some seriously excessive fines.

As use of streaming services like Pandora, Spotify, Netflix, and Amazon increases, logically illegal downloading should be decreasing – but statistics show that it’s not.  In fact, it is estimated that illegal file-sharing has grown approximately 44% from 2008 to 2014.  Software such as BitTorrent and YouTube to MP3 remain extremely popular because people like free.  Well, free is only better until it catches up to you.  While you may never get caught, you have to ask yourself – is illegal downloading really worth the risk?

If you have been the subject of a copyright infringement notice due to illegal downloading, Traverse Legal can help navigate your options.  This is Copyright Attorney Mallory Donick signing off until next time.  Take care!

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Patents vs. Trade Secrets

Should I patent my invention or keep it as a trade secret?  What are the differences between patents and trade secrets?  These are the types of questions that we regularly get asked from our clients.

 

According to the USPTO’s Trade Secret Policy, “trade secrets consist of information and can include a formula, pattern, compilation, program, device, method, technique or process.”  The Defend Trade Secrets Act of 2016 specifies that a trade secret involves taking reasonable measures to keep information secret and deriving independent economic value from the information not being generally known to another person who can obtain economic value from the disclosure of the information.

It is important to understand that patents and trade secrets are NOT mutually exclusive forms of intellectual property protection.  Initially, most inventions were probably protected as trade secrets.  At some point, patent protection was pursued on some of these inventions, while others remained trade secrets.  This decision is often based on the commercial potential and marketability of an invention.  A single product may even have both trade secret and patent protection.

While a patent typically has a term of 20 years from its filing date, trade secrets can last forever as long as the information is kept secret and continues to have economic value, such as the formula for Coke®.  Patents are specific to jurisdictions/countries and only provide rights in those jurisdictions/counties, while the geographic scope and enforceability of trade secrets is unlimited.

Further, patents typically involve greater costs (drafting, prosecution, and maintenance fee costs) and time to obtain compared with trade secrets.  Trade secrets can be obtained immediately and typically require of various agreements, such as NDAs, employment agreements, etc., to ensure the security of the information.  However, the risk of someone reverse engineering your invention is much greater if you simply have a trade secret, as opposed to a patent.  Also, trade secrets are lost upon public disclosure, while patents need to be formally invalidated to be lost.

As you can see, there are numerous factors that should be evaluated when deciding whether or not trade secret protection, patent protection, or both is the best form of intellectual property protection for your invention.  This is typically a very fact-dependent decision that involves evaluating both your business and intellectual property goals.  Let a Traverse Legal patent attorney provide you with the tools necessary to help you make these decisions.  Give us a call today at 866-936-7447 for a free consultation.

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