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Grooveshark, Michelle Lee, USPTO, Marvel, Boston Scientific – the week in IP




Grooveshark losing a copyright infringement case, rumours of Michelle Lee becoming USPTO director, the USPTO issuing more than 300,000 utility patents in fiscal year 2014, and a settlement between Marvel and the heirs of Jack Kirby were among the intellectual property stories hitting the headlines this week

Knocked out of its groove

A federal judge in New York this week ruled that online music service Grooveshark infringed on thousands of copyrights in case brought by nine record companies.

Grooveshark hosted music filed without permission from record companies and publishers, and claimed in 2011 to have 35 million users. The company defended itself by saying the Digital Millennium Copyright Act protected it as long as it complied with takedown notices from copyright holders.

Judge Thomas Griesa said Grooveshark, whose parent company is Escape Media, had uploaded 5,977 of the three labels’ songs without permission and were not subject to the safe harbor provisions of the DMCA.

"Each time Escape streamed one of plaintiffs’ songs recordings, it directly infringed upon plaintiffs’ exclusive performance rights," Judge Griesa wrote in his opinion. The judge also found that Grooveshark destroyed evidence in the case, including the list of files that CEO Samuel Tarantino uploaded.

Grooveshark is still facing two other copyright suits filed by the music industry, both in New York.

Grooveshark put out a statement saying it is "preparing for the appeals process".

"We can say that we will continue to operate our business ethically and honestly — with first-to-market technology as we have done since 2006. I can also say Grooveshark’s current service has provided millions of dollars in revenue to artists and labels globally.

"This decision dealt specifically with an early iteration of Grooveshark which we discontinued in 2008 in favor of our current music streaming service. In turn, we respectfully disagree with the decision, and we are assessing next steps, which will all focus on remaining extremely committed to ensuring we respect artist and songwriter copyrights."

The plaintiffs in the case were Arista Music, Arista Records, Atlantic Recording, Elektra Entertainment Group, LaFace Records, Sony Music Entertainment, UMG Recording, Warner Brothers Records and Zomba Recording.


USPTO Director Lee?

Michelle Lee, deputy director of the USPTO, is being "seriously considered to permanently head the agency", according to Reuters, which cited two sources. The sources said they know of no other possible candidates being considered.

The office has been without a director since David Kappos stood down at the beginning of February last year. Rumours over the summer suggested that Phil Johnson, senior vice-president of intellectual property at Johnson & Johnson, was being lined up to take the job. The Obama Administration reportedly changed tack after a backlash from some of the technology community to the potential appointment.

Lee is former head of patents at Google.

Hal Wegner, partner at Foley & Lardner, noted in his widely-read emails to his distribution list that a Lee nomination would be free from the massive opposition that killed a possible nomination of Johnson.

In one email, Wegner said: "One knowledgeable observer pointed out that the prospective nominee is a Republican. If anything, this should smooth her path to Senate confirmation."

USPTO breaks 300,000 mark

The USPTO also made headlines this week when the Patently-O blog revealed the office issued more than 300,000 utility patents in fiscal year 2014 – the first time it has passed this figure.

"Don’t worry, there remain more than 1,000,000 applications pending in the pipeline and more than 25,000 appeals remain pending before the Patent Trial and Appeal Board," said Dennis Crouch in a blog post. "During the fiscal year, the 8,300 patent examiners 'disposed of’ more than 600,000 cases which in some circles will be calculated as an allowance rate of about 50%." Crouch clarified that he does not think request for continued examination filings should be used in calculating allowance rate, so the allowance rate is effectively about 70%.

Crouch noted that an important aspect of this new set of patents is that most corporate-owned US patents are actually owned by foreign corporations stemming from inventions first created outside the US.

Patent Progress took the news as a chance to suggest that some of the 300,000 patents might not be that novel.

"Think about that – 70% of patent applications result in a patent. Doesn’t that seem at odds with the idea of a patent being for something new?" asked Matt Levy, patent counsel at the Computer and Communications Industry Association, in a Patent Progress blog post.

"It seems to me that it’s simply impossible that seven out of 10 applications are for inventions that no one has ever thought of before. Remember, a patent is only supposed to issue for an invention that’s new and wouldn’t be obvious to someone with ordinary skill in the same field."


SCOTUS won’t save day in superhero case

The new session of the Supreme Court begins next week but – because of a last-minute settlement – one case the court will not be hearing involves the creator of such the Fantastic Four, the Hulk, the X-Men, Thor and Captain America.

The Supreme Court was due to consider whether to grant cert on the case on Monday 29. But the parties announced a settlement on September 26.

Kirby’s heirs had sent notices of copyright termination to Marvel and its parent company Walt Disney in 2009. The intent was to regain copyrights beginning in 2014, the first year they could do so. In 2010 Marvel filed suit in an attempt to invalidate the notices.

The petition of Jack Kirby’s four children sought a review and reversal of a Second Circuit Federal Appeals Court decision that stripped the Kirbys of the right to rescind previous transfers of copyrights to their father’s publisher, Marvel Comics. The so-called termination right" permits authors and their heirs to take back previously transferred copyrights for the additional 19 years that Congress provided in the 1976 Copyright Act.

The International Intellectual Property Institute had filed an amicus brief in the case arguing that the Second Circuit had failed to follow Supreme Court precedent in the 1989 case of CCNV v Reid that held that work commissioned from a freelance artist could not be "work-made-for-hire" of the kind created by a salaried employee. The IIPI said the Second Circuit had disregarded the definition of
"employer" as "it was universally understood at the time Jack Kirby created works in question" and rendered "meaningless the termination right established for the benefit of freelance authors and artists" under the 1976 Act.


Boston Scientific’s $308m loss

Boston Scientific has been ordered to pay $308 million in damages to the family of a physician and medical device developer over patent, infringement allegations, reports the Boston Business Journal.

A Maryland court found that Boston Scientific was liable for damages owed by its Guidant subsidiary to Mirowski Family Ventures, which is an entity supported by royalties for products developed by the late Michel Mirowski. Guidant had agreed a deal with St Jude Medical in 2002 to develop an implantable defibrillator. Mirowski Family Ventures sued in 2013, saying the deal breached its licence agreement with Boston Scientific.

The jury awarded $86.5 million in lost royalties, $80.2 million in interest and $142.6 million in damages.



Also on the blog this week:

UPC questions centre on judges and costs – video interviews

Do your business colleagues understand trade marks?

Highlights from Twitter Q&A with the UK IPO’s Rosa Wilkinson

Guest post: Catriona Hammer on the CIPA Congress

And in our news and analysis:

Patent licensing professionals still adjusting to PTAB proceedings

Acacia subsidiary ordered to pay $1.4m attorneys’ fees

Burundi - Early trade mark registrations to be renewable

Analysis: Is the PTAB a troll killer?

3D printing must avoid the music industry’s IP mistakes

Judge notes Alice’s unintended consequence in video game case

UK readies for new exemptions to copyright

Vringo and ZTE in pre-litigation row

The perils of trying to revive a band’s brand

PCT growth driven by emerging markets

Battistelli responds on Unitary Patent costs

Interview: Richard Vary, Nokia

UPC video interviews: the view from in-house

What we want from the Unitary Patent and UPC

New gTLDs – Understanding and mitigating the risks of the 'super six’

When trade mark rights meet free speech

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@BrocklehurstIP Good luck! T minus four days ...

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Is "gnarly complexity of territorial copyright licensing" to blame for closure of BBC Store? https://t.co/JMMJP8kEPH

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Congratulations to everyone listed this year! #ipwomen https://t.co/JU7wSPDuBR

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