Author: National Law Forum

A group of in-house attorneys developed the National Law Review on-line edition to create an easy to use resource to capture legal trends and news as they first start to emerge. We were looking for a better way to organize, vet and easily retrieve all the updates that were being sent to us on a daily basis.In the process, we’ve become one of the highest volume business law websites in the U.S. Today, the National Law Review’s seasoned editors screen and classify breaking news and analysis authored by recognized legal professionals and our own journalists. There is no log in to access the database and new articles are added hourly. The National Law Review revolutionized legal publication in 1888 and this cutting-edge tradition continues today.

2012 Young Professionals in Energy International Summit

The National Law Review is pleased to bring you information on the 2012 Young Professionals in Energy International Summit:

2012 YOUNG PROFESSIONALS IN ENERGY INTERNATIONAL SUMMIT

April 23-25, 2012
Planet Hollywood Resort & Casino
Las Vegas, Nevada

About the YPE:

Young Professionals in Energy (“YPE”) is the first and only interdisciplinary networking and volunteer organization for people in the global energy industry – a place where bankers can connect with engineers, accountants with geologists and so on. Our mission is to provide a forum for knowledge sharing and camaraderie among future leaders of the energy industry.

The event will feature panel discussions and presentations by YPE members from around the world on such vital energy issues as the world oil supply, shale, renewable energy, career issues and funding new energy projects.

Confirmed speakers include YPE members from the American Petroleum Institute, ExxonMobil, Fulbright & Jaworski L.L.P. the India Ministry of Petroleum and Natural Gas, the Nevada Institute for Renewable Energy Commercialization, Pemex, the University of Southern California and the U.S. Dept. of Commerce.

Highlighting the three-day conference is a keynote speech by Daniel Yergin, author of the best-selling “The Quest: Energy, Security and the Remaking of the Modern World (www.danielyergin.com).

High Court: Police Tracking of Suspect Via GPS Requires Warrant

Recently found in The National Law Review an article by Rachel Hirsch of Ifrah Law regarding a recent High Court Decision Requiring a Warrant:

Last November, we discussed the U.S. Supreme Court’s oral argument in United States v. Jones, which posed the question of whether police need to obtain a warrant before attaching a GPS device to a suspect’s vehicle during a criminal investigation.

We noted that in this case, 21st-century technology had come face to face with the constitutional requirements of the Fourth Amendment. We were hoping that the high court would uphold the U.S. Court of Appeals for the D.C. Circuit and hold that this action is a search that requires a warrant, but we took a pass on predicting what the Court would actually do.

On January 23, 2012, the Court decided the case – unanimously against the government and in favor of defendant Antoine Jones. The decision is fairly gratifying for those of us who believe it desirable to curb prosecutors’ power by imposing restrictions upon it, including, where appropriate, the requirement of a judge-issued warrant.

It turns out that both the advocates of the original-intent approach to constitutional interpretation, epitomized here and in general by Justice Antonin Scalia, and those who prefer the doctrine of the “living Constitution,” led here by Justice Samuel Alito, agree that the use of a GPS device by the government constitutes a search and requires a warrant.

Scalia, writing for a majority of the Justices, observed that prosecutors had intruded upon Jones’ property in way that would have been a “trespass” under common law.

Prosecutors “physically occupied private property for the purpose of obtaining information,” Scalia wrote. “We have no doubt that such a physical intrusion would have been considered a ‘search’ within the meaning of the Fourth Amendment when it was adopted.” And for Scalia, that fact alone was enough to decide the case.

Alito, joined by three Justices who concurred in the result, used quite a different line of reasoning and sharply criticized Scalia’s majority opinion, saying that ironically, it relied upon 18th-century tort law to decide a case involving 21st-century technology.

“This holding, in my judgment, is unwise,” Alito wrote. “It strains the language of the Fourth Amendment; it has little if any support in current Fourth Amendment case law; and it is highly artificial.”

Instead, Alito wrote, he “would analyze the question presented in this case by asking whether [Jones’] reasonable expectations of privacy were violated by the long-term monitoring of the movements of the vehicle he drove.” Alito observed that for decades, the Court has invoked the concept of “reasonable expectations of privacy” in a number of cases to define the nature of a “search” under the Fourth Amendment and to expand the definition of “search” to actions that do not involve a trespass to someone’s property.

Even though Alito is often identified with the pro-prosecution, conservative wing of the Court, he took the defendant’s side in this case. As our blog post last November noted, at oral argument Alito expressed concern about how easy it is these days “to amass an enormous amount of information about people” by the use of today’s technology.

Alito’s opinion followed similar lines. In the absence of legislation about police use of GPS tracking, he wrote, “The best that we can do in this case is to apply existing Fourth Amendment doctrine and to ask whether the use of GPS tracking in a particular case involved a degree of intrusion that a reasonable person would not have anticipated.”

This is good news for constitutional rights and for defendants. Whatever approach one takes to the Fourth Amendment, it’s clear that prosecutors can’t attach a GPS to a suspect’s car without a warrant.

© 2012 Ifrah PLLC

2012 Launching & Sustaining Accountable Care Organizations Conference

The National Law Review is pleased to bring you information on the Launching & Sustaining Accountable Care Organizations Conference will be a two-day, industry focused event specific to CEOs, COOs, CFOs, CMOs, Vice presidents and Directors with responsibilities in Accountable Care Organizations, Managed Care and Network Management from Hospitals, Physician Groups, Health Systems and Academic Medical Centers.

By attending this event, industry leaders will share best practices, strategies and tools on incorporating cost-sharing measures in a changing healthcare landscape to strengthen the business model and ensure long-term success.

Attending This Event Will Enable You to:
1. Understand the initial outcomes and lessons learned from launching ACOs, with a focus on how to sustain these partnerships in the future
2. Hear from the early adopters of ACOs or similar cost-reducing partnerships and understand their initial operational and implementation challenges.
3. Learn about the final regulations regarding ACOs and their impact on those who want to initiate the formation process
4. Gain a clear understanding of regulatory issues and accreditation processes
5. Conquering initial hurdles for establishing an ACO
6. Gain knowledge from newly-formed ACOs
7. Ensure longevity by establishing a robust long-term plan

Copyright Lessons from the Campaign Trail: Romney, Gingrich and Fair Use

Recently found in The National Law Reviewwas an article by Geri L. Haight of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding Copyrights and Fair Use:

This Republican primary season has provided lots of fodder for political blogs, but it has also provided a few gems relating to — what else — trademark issues.    Now, U.S. copyright law is in the spotlight of the Republican primary campaign.  First, Republican presidential hopeful Mitt Romney is considering whether to pull a television ad that is comprised wholly of a 30 second clip from a January 21, 1997 episode of NBC’s “Nightly News” program hosted by Tom Brokaw.  The Romney ad is entitled “History Lesson” and can be viewed here.  In the ad,  Brokaw announces the House Ethics Committee’s decision to penalize then-Speaker Newt Gingrich.  The ad contains no other voiceover or images.  It ends simply with a Romney disclaimer (“Paid For By ….) and the statement that Romney approves the ad.  NBC has sent the Romney campaign a cease and desist letter, alleging that the ad constitutes copyright infringement.  Tom Brokaw has expressed that he is “extremely uncomfortable” with the use of his personal image.   Romney’s campaign asserts that its use of the news clip  “falls within fair use” and, therefore, does not violate copyright laws.

Second, Romney’s primary opponent in the race for the Republican nomination, Newt Gingrich, has copyright troubles of his own.  On Monday, Gingrich was sued in Illinois by a former member of the band Survivor (under the name “Rude Music”) for his use of the song “Eye of the Tiger” at campaign events.  The complaint asserts that Gingrich is “sophisticated and knowledgeable” of federal copyright law, citing Gingrich’s tenure in the U.S. House of Representatives during which the Copyright Act underwent several revisions.  As evidence of Gingrich’s further familiarity with copyright laws, Rude Music cites Gingrich’s recent criticism of the Stop Online Piracy Act at the Republican primary debate in South Carolina.  During that debate, Gingrich is quoted in the complaint as saying: “We have a patent office, we have copyright law. If a company finds that it has genuinely been infringed upon, it has the right to sue.”  In the complaint, Rude Music seeks an injunction and unspecified monetary damages based on Gingrich’s unauthorized public performances of the song.

Romney’s and Gingrich’s recent copyright troubles involve the defense of fair use.  So, what is that?  This defense to a charge of copyright infringement is provided in Section 107 of the Copyright Act.  Section 107  contains a list of the various purposes for which the reproduction of a work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research.   This provision sets out four factors to be considered in determining whether or not a particular use is fair:

  1. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
  2. The nature of the copyrighted work
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole
  4. The effect of the use upon the potential market for, or value of, the copyrighted work

In Romney’s situation, NBC’s position seems to be focused largely on the first factor — its assessment that use of the news clip is commercial in nature.  The clip is used in a political ad that seeks, among other things, donations to fund Romney’s campaign against Gingrich.  But Romney’s campaign has stressed that it used only 30 seconds of a much longer broadcast and that it is using the clip for the content of the facts conveyed (regarding Gingrich’s past ethics violations), not for the particular style of the delivery of those facts.  And Romney seems to be using the clip to comment on Gingrich’s representations during the campaign regarding these past ethics violations.  The risk for the Romney campaign, however, may be the problem with reliance on the fair use in general, identified by the U.S. Copyright Office itself:  “The distinction between fair use and infringement may be unclear and not easily defined.”  But maybe that’s the point.  The Romney ad is certainly getting lots of attention due to NBC’s assertion of a copyright infringement claim.

In Gingrich’s case,  there are arguments for and against application of the fair use factors for both sides.  Again, because the songs are played at campaign events, there is an arguable commercial component to the use.  But there are also arguments about the use being political speech and commentary (given the theme of Gingrich’s underdog status).  The case involves claims that arise frequently in the content of political campaigns (e.g., Jackson Browne sued John McCain in 2008 based on the candidate’s use of the song “Running on Empty” in an ad mocking then candidate Barack Obama’s energy policies).  Though common, most cases settle early so that we do not have a wealth of case law resolving this issue.

NBC and Rude Music have both expressed false endorsement and right of publicity concerns.  By using the NBC news clip, does the public believe that NBC and/or Brokaw endorse Romney?  Or does the band Survivor endorse Gingrich because Gingrich uses “Eye of the Tige” at his campaign events?  Clearly, this perception is a concern to Brokaw, who has stated that he does not “want [his] role as a journalist compromised for political gain by any campaign[.]“  In a world where journalists are perceived as favoring one political party or the other (e.g., Fox News or MSNBC) and musicians take sides in political fights (e.g., Springsteen endorsing Obama or Wayne Newton endorsing Bachmann), such a claim may have legs.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

7th Drug & Medical Device Litigation Forum, 7-8 Mar 2012, Philadelphia

The National Law Review is pleased to inform you of the 7th Drug & Medical Device Litigation Forum: Implementing Appropriate Litigation Readiness and Costs Management Policies That Ensure An Effective Defense at Trial 
Event Date: 7-8 Mar 2012
Location: Philadelphia, PA, United States
Key conference topics
  • Mitigate and maintain costs associated with litigation
  • Gain judical insight on drug and medical litigation and its recent developments
  • Build better relationships with outside counsel in order to reduce the miscommunciation factor
  • Understand the limitations of marketing and advertising as it relates to emerging social media issues
  • Learn the latest on medical device product liability

Conference focus

 Pharmaceutical and medical device manufacturers have faced a growing array of legal challenges this year. With the increase of mass tort litigation, as it relates to product liability, pharmaceutical and medical device manufacturers must be prepared to defend the increasingly sophisticated, well-funded and multi-jurisdictional product liability campaigns against their companies.

The 7th Drug and Medical Device Litigation Conference will be a two-day, industry focused event specific to those within Drug & Medical Device Litigation, Product Liability and Regulatory Affairs in the Medical Device, Biotech and Pharmaceutical industries.

By attending this event, industry leaders will share best practices, strategies and tools on incorporating litigation readiness, utilizing cost efficient litigation strategies and accurately managing policies to ensure an effective defense at trial.

Attending This Event Will Enable You to:
1. Review the current landscape of drug and medical device litigation
2. Learn strategies in settlements and mass tort issues
3. Manage litigation expenses in order to effectively manage costs
4. Review recent case rulings, including the Mensing and Levine cases
5. Take a view from the bench: explore drug and medical device litigation
from a judicial point of view
6. Tackle product liability issues and challenges
7. Uncover the risks for drug and medical device companies when leveraging social media for marketing and advertising campaigns

With a one-track focus, the 7th Drug and Medical Device Litigation Conference is a highly intensive, content-driven event that includes case studies, presentations and panel discussions over two full days.

This is not a trade show; our Drug and Medical Device Litigation conference series is targeted at a focused group of senior level leaders to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

Testimonials:

“Great selection & breadth of speakers. Uniformly high quality of presentations. Intimate nature of meeting provided excellent opportunities for networking” – Abbott

“Great venue to learn and exchange best practices. More importantly how to leverage lesions learned from others.” – Baxter

“One of the best meetings I’ve attended. Excellent organization, topics and speakers. Overall extremely well done.” – Sanofi Aventis

marcusevans


What is an LLC and How Does an LLC Work?

Featured recently in The National Law Review an article by Christopher J. Caldwell and Laura E. Radle of Varnum LLP regarding LLCs:

Varnum LLP

Many cottage owners have heard of others who have established a “Cottage LLC”. But what exactly does this mean? What is an LLC? How does an LLC which owns a cottage work and why would someone use an LLC to own his or her cottage?

Simply put, an LLC is a “limited liability company,” which has some features of both partnerships and traditional corporations. It provides greater liability protection than individual ownership and may have perpetual existence. However, an LLC is also somewhat simpler to manage than a traditional corporation.

In an LLC the owners are called members. The LLC can be controlled either by its members or by managers who are selected by the members. In family cottage situations, selecting one or two managers (who may be members) typically works best.

The rules and regulations of an LLC are set forth in the LLC’s operating agreement. The operating agreement can be as basic or as detailed as the members wish. At a minimum, when created for cottage ownership, the operating agreement should discuss the potential sale or transfer of the cottage, management responsibilities, contributions for expenses, potential for renting, scheduling of time, liability of the owners, and an exit strategy if one owner wants to end the relationship. The primary goal of the LLC – as addressed by the operating agreement – is to provide clear rules, rights and obligations for all of the members.

Cottage owners often need to use an entity that will provide a liability shelter (for example, if the cottage is rented to third parties). But the owners also need an entity that does not require a lot of time to maintain. And, most importantly, because cottage owners want to be able to tailor the operating agreement to fit their lifestyles, they need an entity that is flexible. The LLC has all of these attributes, making it a great match for cottage owners. And once an LLC is established, cottage owners will be able to focus on the fun part of their ownership, spending carefree and conflict-free time at the cottage.

© 2012 Varnum LLP

The 15th Annual ABA National Institute on the Gaming Law Minefield Feb 24-25 LasVegas

The 2011 Gaming Law Minefield program is specifically designed to provide in-depth coverage and discussion of the cutting-edge legal, regulatory, and ethical issues confronting both commercial and Native American gaming. Attorneys, compliance officers, Native American leaders, regulators, and legislators will all provide invaluable insights into current trends, opportunities and obstacles in the gaming industry. The program’s subject matter includes new gaming technology, increased IRS CTR and SAR compliance audit activity, Internet gaming, Native American gaming, breaking hot topics in the gaming industry, latest developments in dealing with problem gamblers, and a two-hour CLE-certified ethics program.

The Gaming Law Minefield program constitutes one of the most comprehensive, state-of-the-law gaming programs available. Program attendees have consistently rated the program as a valuable educational experience that provides participants with the opportunity to meet and talk with a wide variety of gaming law experts and leading state and Native American regulators.

Early Bird Registration ends January 24th. For More Information:  Click Here:

Lessons from the Facebook Privacy Fiasco

An article recently in The National Law Review by Dean W. Harvey of Andrews Kurth LLP regarding Facebook Privacy:

Facebook is a wildly popular social media site which allows users to share information about themselves, send messages to friends, play games and join common interest groups. It is the most visited site in the U.S., with over 100 million active U.S. users and hundreds of millions of active users worldwide.1

During the week of April 18, 2010, Facebook made material changes to the way that its users’ personal information was classified and disclosed. The changes resulted in complicated privacy settings that confused users, and in some cases, personal data which users had previously designated as private was allegedly made public. As a result, a group of petitioners, including the Electronic Privacy Information Center (“EPIC”), filed a complaint with the FTC requesting that the Commission investigate Facebook to determine whether it engaged in unfair or deceptive trade practices (“Complaint”).

Allegations

The Complaint claimed that Facebook violated its own privacy policy, disclosed personal information of Facebook users without consent, and engaged in unfair and deceptive trade practices. Specifically, the Complaint alleged that among other things:

  • Facebook made publicly available personal information which users had previous designated as private.2
  • Facebook disclosed to third parties information that users designated as available to Friends Only (including to third-party websites, applications, other Facebook users and outsiders who happen on to Facebook pages).3
  • Facebook claimed that none of user’s information was shared with sites visited via a plug-in (such as the Like button, Recommend button, etc.). However, such plug-ins may reveal users’ personal data to such websites without consent.4
  • Facebook designed privacy settings “to confuse users and to frustrate attempts to limit the public disclosure of personal information . . .”5
  • Although the Facebook terms which many users accepted indicated that developers would be limited to a 24-hour retention period for any user data, Facebook announced that the limit no longer exists.6

Angry End Users

Regardless of whether each of the above allegations is true, it is clear that Facebook’s changes to its privacy practices inflamed some of its users. In support of its allegations, the EPIC Complaint included quotes from experts and users about Facebook’s privacy practices such as:

“I shouldn’t have to dive into complicated settings that give the fiction of privacy control but don’t, since they are so hard to understand that they’re ignored. I shouldn’t need a flowchart to understand what friends of friends of friends can share with others. Things should be naturally clear and easy for me.”7

“Facebook constantly is changing the privacy rules and I’m forced to hack through the jungle of their well-hidden privacy controls to prune out new types of permissions Facebook recently added. I have no idea how much of my personal information was released before I learned of a new angle the company has developed to give my information to others.”8

“‘Instant Personalization’ is turned on automatically by default. That means instead of giving you the option to “opt-in” and give your permission for this to happen, Facebook is making you “opt-out,” essentially using your information how they see fit unless you make the extra effort to turn that feature off.”9

“Facebook has become Big Brother. Facebook has succeeded in giving its users the allusion [sic] of privacy on a public site, leaving everyone to become complacent about keeping track of the myriad changes going on behind the scenes. The constant changes assure Facebook that you can never keep all your information private.”10

The Proposed Settlement

The FTC investigated the Complaint and ultimately agreed to a proposed settlement agreement containing a consent order.11 Without admitting liability, Facebook has agreed to a settlement that among other things requires the following:

  • Facebook must establish, implement and maintain a comprehensive privacy program designed to: (1) address privacy risks related to the development and management of new and existing product and services for consumers; and (2) protect the privacy and security of covered information.12
  • Facebook must obtain an independent third-party audit every other year for the next 20 years certifying that the Facebook privacy program meets or exceeds the requirements of the FTC order;13
  • Facebook is required to obtain express consent from a user before enacting changes that override the user’s privacy preferences;14
  • Facebook is required to prevent third parties from accessing user data after the user has deleted (with exceptions for legal compliance and fraud prevention).15

Lessons from the Complaint and Order

Facebook received significant negative publicity, incurred legal costs and business disruption associated with a government investigation, and will incur compliance costs for the next 20 years as a result of the proposed settlement. Businesses that deal with consumer information would be well advised to learn from Facebook’s experience. There are several lessons that businesses can draw from the Facebook privacy fiasco in dealing with data privacy issues.

A. Don’t Make Your Customers Angry

Facebook’s intentions in making the changes to its privacy settings may have been entirely good. For example, Facebook may have honestly been trying to improve its user experience. However, the changes significantly angered some of its customers. The lesson to be learned here is that intentions don’t matter if you anger your customers with your changes. The ultimate user experience may be better, the site may objectively offer more functionality, but none of that matters if users are offended by the process.

Businesses need to achieve innovations and improvements in the use of consumer data with user consent, and without breaking prior promises. Keeping your customers satisfied isn’t just good business, it also greatly reduces the likelihood that they will be filing deceptive trade practice complaints with the FTC.

B. Keep the Privacy Settings Simple

Much of the Complaint is dedicated to showing how complicated the Facebook settings are, and many of the quoted user statements underscore that issue as well. Such complexity often leads to errors (such as permitting applications to access personal information of a user through the user’s friends). Even when the settings work perfectly, the average person may find such complexity frustrating, leading to angry end users.

It is important to keep privacy policies simple and establish privacy settings so that they can be easily understood by an average user. Informed consent is really only obtained when the user understands the policy or setting to which he or she is consenting.

C. Consider How Applications Access User Data

When drafting a privacy policy, it is easy to focus on the organization’s use of data for internal purposes and with its vendors and subcontractors. However, special care must be taken with use of consumers’ data by software applications. For example, it is alleged that Facebook indicated applications only had access to the user information necessary for their operation, when the applications in fact had access to all user information.

In order to accurately describe how applications use consumer data in your privacy policy, you have to investigate the operation of the applications on your site, document that operation, and establish IT policies and procedures governing the use of data by new or modified applications. If you do not take these steps, it is likely that any promise regarding the use of data by applications will become misleading over time as the applications change and are updated.

D. Monitor Linking and Other Advertising Arrangements

Linking and advertising arrangements are the lifeblood of many sites. In order to make accurate statements about the types of data shared in such arrangements, it is necessary to review the contracts to understand what types of user data will be shared through business processes. However, this is not sufficient to ensure that the full use of data is understood. Just as with applications, it is necessary to investigate what data is collected or shared in the process of passing the user to the third party. Similar to applications, it is important to document what user data is permitted to be shared with advertisers and other third parties, and to establish IT policies and procedures to enforce such permitted uses.

E. Don’t Make User Data Public Without Consent.

One of the problems many businesses face with privacy policies is that as their business changes, the types of user data that they want to access or use may change as well. However, it is important to remember that no matter what the motive, if you have promised to keep certain elements of user data private in your privacy policy, you should not make it public by default without first obtaining affirmative user consent.

Privacy compliance is difficult in a changing online environment, even for businesses that don’t have hundreds of millions of users. The Complaint and Order in the Facebook matter highlight some of the many ways that a business can go wrong in protecting private consumer information. In order to successfully protect such information, a business which deals extensively with consumer data should establish, maintain, update and enforce a comprehensive privacy and security program, which takes into account material risks as well as lessons learned from the experience of other companies, such as Facebook.

1. In the Matter of Facebook, Inc., Complaint paragraph 31 (May 5, 2010); available at http://epic.org/privacy/facebook/EPIC_FTC_FB_Complaint.pdf.

2. Id. at paragraph 55.

3. Id. at paragraph 59.

4. Id. at paragraph 65.

5. Id. at paragraph 64.

6. Id. at paragraphs 92-94.

7. Id. at paragraph 95.

8. Id. at paragraph 97.

9. Id. at paragraph 98.

10. Id. at paragraph 106.

11. In the Matter of Facebook, Inc. File No. 092 3184, Agreement Containing Consent Order (“Order”); available athttp://www.ftc.gov/os/caselist/0923184/111129facebookagree.pdf.

12. Id. at paragraph IV.

13. Id. at paragraph V.

14. Id. at paragraph II.

15. Id. at paragraph III.

© 2012 Andrews Kurth LLP

Cutting Edge Issues in Asbestos Litigation Conference

The National Law Review would like to advise you of the upcoming Perrin Conference regarding Cutting-Edge Issues in Asbestos Litigation:

Thursday, March 1st – Friday, March 2nd, 2012
Beverly Wilshire, A Four Seasons Hotel
Beverly Hills, CA

Appeal Against Exclusion From Patentability of Software to Protect Minors Online Allowed

An article regarding Patentability of Monitoring Software was posted recently in The National Law Review.  The article was written by Rohan Massey, Francesco Mattina, Hiroshi Sheraton, Vincent Schröder, and Boris Uphoff of McDermott Will & Emery:

In relation to the application by Protecting Kids the World Over (PKTWO) [2011] EWHC 2720 (Pat), the High Court of England and Wales has allowed an appeal against a decision of a Hearing Officer that found that an alarm notification system for monitoring inappropriate electronic communications fell within the computer program exclusion.

BACKGROUND

PKTWO applied to register a system for monitoring the content of electronic communications to ensure that children are not exposed to inappropriate content. The system as claimed analyses data sampled from a communication channel. Where the data is judged to be of concern, the user of the system—the child’s parent—can be notified by email or text message and by reply can send a remote response command either to terminate the electronic communication or to completely shut down the computer.

The Hearing Officer held that the invention was excluded from patentability because it related to a computer program and to a method of performing a mental act as such. PKTWO appealed to the High Court, submitting that the contribution its invention made to the state of the art had been ignored. Just before this hearing, the Comptroller withdrew the mental act exclusion and only put forward the computer program exception.

DECISION

Floyd J began by referring to the exclusion found in Article 54 of the European Patent Convention (and Section 1(2) of the Patents Act 1977) against the patentability of computer programs “as such”. He then turned to the wealth of case law on the interpretation of this exclusion, including the four step approach from Aerotel v Telco/Macrossan’s Patent Application [2007] RPC 7 that should be applied in such cases:

1. Properly construe the claim

2. Identify the actual contribution

3. Ask whether it falls solely within the excluded subject matter

4. Check whether the actual or alleged contribution is actually technical in nature.

In identifying the actual contribution made by the invention, Floyd J observed thatAerotel required that when considering the invention “as a whole”, this contribution had to be to the effect that the invention added something to human knowledge. He then went on to ascertain whether the contribution made was technical, as this had to be the case before the requirements for patentability could be met, by applying the approach set out in AT&T Knowledge Ventures [2009] EWHC 343. Furthermore, Floyd J observed that Gemstar-TV Guide International Inc v Virgin Media Ltd [2010] RPC 10 required this technical contribution to achieve a physical effect or activity as opposed to being abstract, such as simply making something “better” or producing a different display.

Applying these principles, Floyd J held that the contribution made by the claim at issue was that a more rapid and reliable alarm notification was generated. While this was not new, the particular way in which the notification was sent, i.e., sending messages to the user by email or text, was not known in the existing art and was technically superior to other known forms of notification. He held that it therefore contributed to human knowledge. He added that the invention when viewed as a whole improved the way electronic content was monitored and was therefore technical, albeit outside the computer. He held that because of this, the invention had the necessary characteristics of a technical contribution that was superior to that produced by the prior art, and therefore did not fall wholly within the exclusion. The appeal was allowed.

COMMENT

Although there is no shortage of authority on the subject of computer programs, this ruling is a reminder of how difficult it can be to navigate these issues with any certainty. The question of determining whether the contribution is technical is by far the most difficult to answer and each case has to be decided based on its own particular facts and features, using the guidelines in the case law. What this case does not address is the tension between the European Patent Office approach and the UK approach to the exclusion.

© 2012 McDermott Will & Emery