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US Supreme Court Limits Patent Claims

Aire Libre and other readers noted a unanimous Supreme Court decision that denied LG Electronics's attempt to evade the first-sale doctrine by use of "business method" patents. LG licensed patents to Intel, then attempted to dictate what use Intel's customers could make of the Intel products incorporating LG patents. The decision (PDF) notes how easily patents can be written up as "business methods" to nullify the first-sale doctrine ("exhaustion") and to give the patent owner perpetual control downstream. Aire Libre adds, "That reasoning bodes well for copyright freedom as well, in light of the growing number of copyright holders who seek to nullify the Copyright Act's limitation on the distribution right by claiming the goods are 'licensed, not sold,' or subject to some restrictive EULA."

26 of 118 comments (clear)

  1. It doesn't bode anything for copyright by Quarters · · Score: 5, Insightful

    That reasoning bodes well for copyright freedom as well...

    Reason has no place in a legal proceeding. Sad, but true. This ruling doesn't have any direct implications on copyright issues. Any perceived reason the justices showed with this ruling can only be tested against copyright if and when a similar dispute regarding copyright makes it to the Supreme Court. Until a person or organization has deep enough pockets to push/appeal a court case to the SC we'll never know if the justices' reason extends to copyright or not.

    1. Re:It doesn't bode anything for copyright by moderatorrater · · Score: 4, Insightful

      Strengthening the first sale doctrine does have bearing on Copyright issues, although how much depends on the judge.

    2. Re:It doesn't bode anything for copyright by taustin · · Score: 5, Informative

      The "first sale doctrine" has already been used to kill attempts by copyright holders to limit downstream use. The rulings have been consistently correct. The general reasoning, as was used in Softman V. Adobe is that if A) there is a one time fee, and not ongoing payments, and B) use is unlimited, not time limited, it is a "sale of goods" not a license. And if it is a sale of goods, then the first sale doctrine applies, and that's that.

      It may vary somewhat from state to state, but for the most part, the Uniform Commercial Code is the standard for all state laws that will determine whether software is sold as a sale of goods or licensed. And being a copyright issue, this will generally be decided in federal court anyway.

      This ia a good ruling, but for anyone who pays attention, not a big surprise.

    3. Re:It doesn't bode anything for copyright by wamerocity · · Score: 4, Interesting

      Wow, two good rulings in the space of 30 days. I might just start regaining faith in the judicial process again. Between this and the suit between Autodesk (autocad) and that guy on eBay who was told he couldn't sell used copies online. I thought that the eventuality of that decision was going to be tougher DRM restrictions from the software makers that make sold software impossible to install without some kind of online verification. But this ruling looks like the ball may be rolling in the right direction. Maybe I'll just wait to see what pans out before I get too excited... I've been severely disappointed in our government many times...

      --
      "Thank you for using Stop-n-Drop, America's favorite suicide booth since 2008"
    4. Re:It doesn't bode anything for copyright by Kopiok · · Score: 4, Interesting

      The Supreme Court, from what I have seen, generally makes well reasoned, intelligent, and in general good decisions about the cases they hear. The problem is it's so expensive, and so hard to get your case heard that they don't decide on nearly as many cases as I think they should. Of course, there's only one Supreme Court of the United States, so it'd be tough to hear every case.

    5. Re:It doesn't bode anything for copyright by jadavis · · Score: 3, Interesting

      I assume you're referring to Kelo v. New London. The interesting thing about that case is that all the dissenters were the conservatives. O'Connor, Rhenquist, Scalia, and Thomas all dissented from that horrible opinion.

      --
      Social scientists are inspired by theories; scientists are humbled by facts.
  2. That's strange by Daetrin · · Score: 4, Interesting

    It clearly seems like LG was in the wrong here, but this was a case where both parties actually produce and sell goods using the patents they own. Has the US Supreme Court had anything to say about the numerous cases involving patent squatters/submarine patents? That seems like it ought to be a more serious issue.

    --
    This Space Intentionally Left Blank
    1. Re:That's strange by raehl · · Score: 3, Informative

      Er, like their ruling that drastically reduced cases where an injunction was appropriate, this taking away the big injunction stick from patent trolls?

      http://www.infoworld.com/article/06/05/15/78316_HNebaypatent_1.html?source=rss&url=http://www.infoworld.com/article/06/05/15/78316_HNebaypatent_1.html

  3. Re:Good work, men! by afabbro · · Score: 4, Funny

    One of the Supremes is a girl, you insensitive clod!

    --
    Advice: on VPS providers
  4. Re:Interesting... by MightyMartian · · Score: 4, Insightful

    Well, let's put this in perspective. This is about one batch of capitalists battling against another batch of capitalists over an abusive patent method that, while ultimately screwing the consumer, does not in fact directly involve the consumer (it's not terribly likely that you or I were going to be directly sued by LG).

    Still, it's good to see that there's some recognition at the top of the system that these patent shenanigans are beginning to seriously compromise manufacturing and development.

    --
    The world's burning. Moped Jesus spotted on I50. Details at 11.
  5. Re:Interesting... by Anonymous Coward · · Score: 4, Interesting

    True to the trollage, i must say that obama SEEMS less threatening on the freedom of speech side than hillary (the think-of-the-children queen), but i must say that both parties seem to want to limit such freedoms. Its just a question of HOW they are wanting to limit such freedoms.

    Course, not enough of the population seems to care and simply 'roots for their team'. Just an observation from outside your nation.

  6. Re:Good work, men! by Nikkos · · Score: 4, Funny

    All of The Supremes were girls, you ignorant putz!

  7. Re:Interesting... by Chris+Burke · · Score: 5, Interesting

    ...that it is the very same conservative US Supreme Court that liberal slashdotters have been damning for years are the ones that strike this blow for freedom.

    Haha, actually I've been cheering them because despite being stacked with conservatives, they have still handed Bush his most significant legal setbacks of his entire eight years. Something the majority Democrat Congress has been unable to do. It's the Republicans who have been gnashing their teeth at the Supreme Court for being 'activist judges' when they won't let Congress or the President do something for no more reason than the Constitution says they can't.

    Personally, I just take this to mean that in the eyes of the least politically motivated branch of government, even when stacked with conservative opinions, Bush is way out on the right on a great many things. Yet another sign of how our country's "left-right" barometer is currently skewed heavily to the right. So don't worry. Even when some liberal justices get appointed, it won't cause the court to significantly skew to the left. While in some ways counter-intuitive, it's amazing how our least Democratic branch of government is in a unique position to protect our Democracy.

    --

    The enemies of Democracy are
  8. Decision depends on license and on what was sold by waterbear · · Score: 5, Informative

    It clearly seems like LG was in the wrong here, but this was a case where both parties actually produce and sell goods using the patents they own. Has the US Supreme Court had anything to say about the numerous cases involving patent squatters/submarine patents? That seems like it ought to be a more serious issue.

    If you look at the Supreme Court's decision (http://www.supremecourtus.gov/opinions/07pdf/06-937.pdf) it will be clear how it turns, first, on whether the patent license to Intel permits Intel to sell goods that practice the patents, and second, did the goods sold by Intel practice the patents. The answer to both questions was yes, triggering the application of the doctrine of exhaustion of patent rights with respect to the product that was sold. That was true even where the patent had method claims, and when those would not be completely practiced until the sold product was combined with other components. The rationale for that aspect was that the sold items practiced the patent by embodying all of the inventive matter and having in practice no other use except to practice the patent: the components left to be added were standard stuff, while all of the inventive content was in the items sold.

    None of that depended in any way on the question whether the patent licensor engaged in manufacture on its own account. The court did not need to consider that. So the decision clearly applies to patent holders who grant licenses to others to sell patented products, irrespective of whether the licensors themselves do manufacturing or not.

    -wb-

  9. Re:Interesting... by DigiShaman · · Score: 3, Insightful

    WTF?! SCOTUS shouldn't be "left" or "right" wing! I want a Supreme Court that will read the Constitution as-is and from the beginning of it's creation. That last thing we need is for SCOTUS to interperate it in a shape/form that fits with "modern times". Screw that! If a line isn't drawn in drawn in the sand from the get go, what's the point of having this core document?

    Sorry for my ranting folks, but this just bugs the hell outta me. If you want the Constitution changed, then vote to ammend it. I do not want some judge changing the original meaning to fit with their own political ideology and/or dreams for a different future.

    --
    Life is not for the lazy.
  10. 8 years later by Xelios · · Score: 3, Insightful

    This suddenoutbreakofcommonsense only took 8 years, and one stubborn company that refused to settle when all the others did. It may have been an obvious outcome to some, but apparently not to the Federal Circuit Court of Appeals or the unnamed number of other companies who gave in to the royalty demands.

    The real question in all this is why the appeal court sided with LG.

    --
    Murphey's fighting Occam, and we're in the stands.
  11. Re:Interesting... by Chris+Burke · · Score: 5, Insightful

    WTF?! SCOTUS shouldn't be "left" or "right" wing! I want a Supreme Court that will read the Constitution as-is and from the beginning of it's creation. That last thing we need is for SCOTUS to interperate it in a shape/form that fits with "modern times". Screw that! If a line isn't drawn in drawn in the sand from the get go, what's the point of having this core document?

    Which, as I was trying to point out, is largely the case. You can't possibly prevent the justices from holding what you might call conservative or liberal viewpoints. Yet despite this, and despite efforts to deliberately get as many of a certain viewpoint on the bench as possible, the Supreme Court of the U.S. remains largely centrist. Overall, they have done a better job of respecting and sticking to the Constitution by far than either of the other two branches. They are the "line in the sand" you refer to, and they've done a very good job of stopping people from crossing it.

    In so much as they can. I mean, they don't have the ability to rule on arbitrary issues, so as long as warrantless wiretapping doesn't come before them in a case, they have no ability to rule on it.

    Sorry for my ranting folks, but this just bugs the hell outta me. If you want the Constitution changed, then vote to ammend it. I do not want some judge changing the original meaning to fit with their own political ideology and/or dreams for a different future.

    Which has been happening far, far less often than you probably think. The fact is that everyone colors their interpretation of the Constitution and what it means "from the beginning of its creation" with the political ideology. I consider myself very much a constructionist (or I guess origionalist), yet I don't delude myself that my reading of what "the Founding Father's intended" isn't affected by my own beliefs.

    The demonstrated ability of SCOTUS to resist this influence in their rulings is rather impressive to me, especially compared to the other two examples. All this screaming about "activist judges" changing the Constitution to suit their whims (in either direction, "left" or "right") is vastly overplayed, if not played out.

    --

    The enemies of Democracy are
  12. This is not about "Business Methods" by tkohler · · Score: 4, Informative

    This is about "method" patents, not only "business method" patents. The SCOTUS maintained that the first sale doctrine applies to method patents as well. This is a big deal for industries with complex supply chains where an end product (like a laptop) has components that have passed through many hands. In the same way that a patent holder of a surface mount resistor can't charge a royalty to the PC brand if they already charged the mother-boardmaker, a holder of a method patent for example, a "method of caching operations in a processor", cannot charge a royalty to everyone who buys and sells the product. The licensors are left with the decision to pick where in the value chain to insert their bite, at the low end where their value added is great but profits are lower, or higher up where the profits are higher but the contribution of the invention is diluted. IANAL

  13. Changing the original meaning? by Mathinker · · Score: 5, Insightful

    > I do not want some judge changing the original meaning

    I don't get it. You actually believe that the words of the Constitution encode enough information to enable everyone to unequivocally understand what the authors of that document believed should be done in all possible situations (even assuming they had one unanimous opinion)?

    Face it. That's impossible, and that's why we have judges. And why they're constantly overturning old decisions and laws.

    Of course, I do agree with you that judges shouldn't be making their decisions based on partisan loyalty. But one has to cope with the fact that they are human also.

  14. Re:Interesting... by Firethorn · · Score: 4, Insightful

    I agree, though you'll still get odd 'liberal' and 'conservative' readings of the constitution. Especially stuff that isn't cut and dried in the constitution, such as abortion.

    For example, the earlier poster thinks that the court is conservative, while I think that it's dangerously liberal - just look at the gaping hole that is the commerce clause today.

    Of course, I tend to think that the founders wrote in rather plain language, and generally speaking, KISS should apply. Especially from circuit courts, I've seen torturous readings of laws to essentially try to say that the law means the opposite of what it says.

    And yes, this includes stuff like same sex marriage, abortion, discrimination, etc... It's not that I actually have a problem with same sex marriage*. I'm generally pro-choice**, and I don't care whether you're white, yellow, or black. Don't even care if you're green or purple other than curiosity as to how you got to be that way.

    My objection is philosophical in nature - courts are not to be 'legislating from the bench', inventing rights, etc... If we decide that we need a new right, it should be acknowledged in the traditional way - amend the constitution. For that matter, I tend to think that legislators who propose, vote for, and enact blatantly unconstitutional laws should be fired.

    *I'm of the opinion it should be civil unions for all, if you want to call yourself married find a priest, priestess, rabbi, mullah, witchdoctor, whatever willing to perform the ceremony.
    **for first trimester, second should require some special circumstances, and third some serious medical issue(like it being discovered that said baby has no brain, and will die within a week of birth even with life support). If it should be done, the morning-after pill should be used. It should not be for sex selection, or just because you're too lazy of a dumbass to use birth control. On the other hand, if you're such a dumbass, you shouldn't be having kids anyways.

    --
    I don't read AC A human right
  15. Re:Interesting... by Maxo-Texas · · Score: 4, Insightful

    While I understand (and mostly agree with) your point...

    I do not want my neighbors to have thermonuclear weapons under the 2nd amendment.

    And if they can't, then the document is subject to interpretation in light of current technology for reasonableness.

    --
    She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
  16. J.K Rowling v. RDR Books... by thtrgremlin · · Score: 4, Interesting

    ... will likely make its way to the supreme court. The complexity of the case, and the controversy over YOUR Intellectual Property versus MY culture. Lawrence Lessig is on staff for RDR Books defending, the same lawyer that fought (ok, and lost) in Eldred v. Ashcroft. I know this is too much to ask, but I see no reason not to revert back to the Statute of Anne. Give copyright holders a FIRM grip over their IP to allow them to reap its rewards and present it the way they desire, BUT, after a "Limited Period of Time", give it to the people to let it grow and thrive.

    Unless we are going to argue reincarnation, this lifetime is the only one I have. 'Forever' is my entire lifetime, or anyone elses. Nothing that is part of my culture can be remixed or reused by myself or virtually any generation I will ever see when there is a term limit of life + 70 years / 120 years.

    Anyway, Lessig and others learned some HARD lessons, such as the power of money among other things, not to mention the series of some good small wins for EFF over the past year, for GPL and such, showing the value free and freedom to the public.

    In light of the entire history of supreme court they can seem small, they have ruled on the side of reason defying long standing law, and majority opinion: Brown v. Board of Education of Topeka, 347 U.S. 483 (1954), United States v. Causby, 328 U.S. 256 (1946). United States v. Miller, 317 U. S. 369. While Miller had to do with government taking, why can not the same PROPERTY law apply as they keep arguing. "It is the owner's loss, not the taker's gain, which is the measure of the value of the property taken." was ruled. As for Rowling v. RDR Books, IMO, an idea only becomes culture AFTER it is given to the public. And you CAN'T copyright an IDEA. Making cultural references to an idea aren't piracy, and not even plagiarism, it is literature in its absolute meaning.

    So I hope that this case shows that the supreme court is ready to rule on the side of reason that Congress CAN NOT hide away like it did after LaMacchia with the NET Act. Eldred v. Ashcroft 537 U.S. 186 (2003) ruled the way it did because the argument made could not beat the argument of big money, so YES, I think this case COULD have major implications in the near future over copyright.

    The only circumstances under which I could be persuaded otherwise would be if they tax this PROPERTY progressively with respect to the amount of time on copyright, gross value earned from copyright, and number of copyrights held by a person. This would make it EQUAL with real property. At present, any vaguely original though or artistry I express in a tangible way has GREATER protection than the home for my family. And before I am accused of making a straw man, consider the ways you can loose and reclaim an IP versus the way you can loose and reclaim your house.

    Hope that wasn't too off topic for anyone, just my thoughts on the supreme court and reason.

    --
    Want Big Business out of government? Take away the incentive and start by getting government out of big business!
    1. Re:J.K Rowling v. RDR Books... by the+eric+conspiracy · · Score: 3, Insightful

      You really can't limit term of copyright to the author's lifetime. People work for companies that fund their work in exchange for a regular salary. This would bind the value of the work to the age and health of the employee, leading to all sorts of economic pressure to not fund the work of older people.

    2. Re:J.K Rowling v. RDR Books... by thtrgremlin · · Score: 5, Interesting

      The only empirical evidence where data was used to calculate maximum profitability for a creative work was in The Long Tail, and to the authors surprise, he concluded that the most reasonable copyright term would be 4 years, 3 years renewable for a max term of 7 years. Anything longer was pointless and hindered progress.

      I have no desire to see copyright widdled away towards something reasonable. It was extended past 14 years through a corrupted process people are recognizing, and it is time for it to be fixed!

      --
      Want Big Business out of government? Take away the incentive and start by getting government out of big business!
    3. Re:J.K Rowling v. RDR Books... by Ed+Avis · · Score: 3, Interesting

      Oh, I see what you meant: if the copyright term is the author's lifetime, then a work produced by a 20 year old has more value than one produced by a 70 year old. It's a fair point but somehow people feel that it is fair for authors to exercise control over their work while they live.

      I think the original formulation struck a good balance: 14 years, extensible for another 14 while the author is alive. This still has a bias towards younger authors but it's less.

      --
      -- Ed Avis ed@membled.com
  17. EFF's Lessig endorsed Obama long ago. by thtrgremlin · · Score: 4, Informative

    http://www.lessig.org/blog/2008/02/20_minutes_or_so_on_why_i_am_4.html

    A 20 minute video done by Lawrence Lessig on why he supports Obama. Would it be too much to consider that the endorsement of the Electronic Freedom Foundation?

    That does give me some comfort over some of the things that REALLY concern me over Obama as mentioned above.

    --
    Want Big Business out of government? Take away the incentive and start by getting government out of big business!