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I can’t recall a time when there were as many significant patent issues on the front burner. Pending before the U.S. Supreme Court are eBay Inc. v. MercExchange(patentee’s right to a permanent injunction after a finding of infringement), Laboratory Corp. of America Holdings v. Metabolite Laboratories(patentable subject matter), and MedImmune v. Genentech(licensee’s right to bring a declaratory relief action challenging patent). Just recently the Supreme Court decided Illinois Tool Works(abrogating the presumption of market power from mere ownership of intellectual property). Moreover, a certpetition is pending in AT& on the issue of extra-territoriality and software. At the same time, the Patent and Trademark Office is proposing dramatic restrictions on continuation practice while the Senate is proposing to limit the automatic stay provisions relative to ANDA filings � an issue of massive importance to the pharmaceutical and biotech industries. Perhaps most importantly, and with thanks to the RIM case, we are likely to see Congress focus on a legislative solution to the problem of patent “trolls,” regardless of the outcome of the eBay case. So we have this big mosh pit of important patent issues waiting to be decided, along with an incipient national debate on the proper role of patents. And just when you thought it was safe to go home and relax in front of the television with your family, we now have Simon Cowell’s new show on ABC, “American Inventor.” — Wayne Barsky Gibson, Dunn& Crutcher The recent Perfect 10 v. Googlecase (in which I am counsel for Perfect 10) highlights a new aspect of the online use of copyrighted works. Peer-to-peer systems designed solely to capitalize on infringement have been the most publicized form of Internet infringement and were the first to be litigated. In retrospect, that was the easy scenario. New uses of copyrighted works, including search engines that collect and directly make images and other copyrighted material available and online video “sharing” services, rapidly are being implemented. This presents an ongoing and accelerating challenge to adapt the framework of copyright law to these evolving technologies. As these issues arise, the law must be careful to preserve the public benefit derived from encouraging creativity by meaningful copyright protection. That will not be so easy. — Russell Frackman Mitchell Silberberg& Knupp The Betamax defense has been under sustained legal attack in cases involving peer-to-peer technology. In the Napstercase, for example, the court found that this defense, even if effective against a contributory infringement claim, will not protect a defendant from a vicarious liability claim. In the Aimstercase, the court suggested that the Betamax defense may require an evaluation of the proportion of infringing to non-infringing uses, contrary to language in the Supreme Court’s Sonyruling. The Supreme Court, in MGM v. Grokster, did little to clarify the debates surrounding the Betamax defense. Instead, the court based its ruling on an inducement theory and made it clear that the Betamax defense does not apply to inducement. The heart of the debate, still unresolved, is whether the Betamax defense turns on a product’s “capability” or “primary use.” The entertainment industry continues to argue that anyone who continues to distribute a product, knowing that it is primarily used for infringement, is a contributory infringer, notwithstanding the Betamax defense. The technology industry disagrees, arguing that so long as your product is “merely capable” of substantial non-infringing uses, it does not matter what the proportion of infringing or non-infringing uses might turn out to be. In short, the law surrounding the Betamax defense remains in flux, putting P2P developers (and all technologists) on unpredictable legal ground when it comes to contributory infringement. * — Fred von Lohmann Electronic Frontier Foundation The dominant theme of intellectual property law in 2006 has to be the Supreme Court’s amazing appetite for patent cases. The court has taken cases that could fundamentally reshape patentable subject matter, the entitlement to injunctive relief and the licensor-licensee relationship as well as two other patent cases dealing with procedural issues and the overlap between antitrust and intellectual property. And there may be more to come — important cases are pending raising questions of obviousness, the extraterritoriality of U.S. patents, and collusion by pharmaceutical patent owners. Coupled with the possibility of significant patent reform in the Congress, and depending on the outcome of these cases, 2006 may be remembered as the year the pendulum swung against strong patent protection. — Mark Lemley Stanford Law School Technology such as satellite radio provides another example of a new medium that does not fit very neatly in a copyright bucket. But this is a field that is changing so rapidly that stakeholders can’t wait for Congress to make up the rules. A lot of folks were hoping, for better or worse, that the courts would come down with some very clear and articulate standards. But now we’re left with formulating our advice based on as broad a perspective as we can glean from our vantage points. Maybe the industry will finally come up with a licensing scheme that would really encourage new business models to flourish. — Michael Glaser Perkins Coie Sun Microsystems has made recent announcements about their “open DRM” (digital rights management) project. In my view, they’ve made some commitments that are important for any DRM project � e.g., as I’ve seen it described, it would be implemented to allow individuals to assert “fair use” and unlock DRM’d content, with a tag to trace misuse. And they’ve described a platform upon which authors keep the freedom to turn the DRM off and move the content from the secured platform. These are good things. But some confuse praise for better DRM with praise for DRM. So let me be as clear as possible: We should be building a DRM-free world. We should have laws that encourage a DRM-free world. We should demonstrate practices that make compelling a DRM-free world. All of that should, I thought, be clear. But just as one can hate the Sonny Bono Act but also think if there’s a Sonny Bono Act, there should also be a Public Domain Enhancement Act, so too can one hate DRM but think that if there is DRM, it should be at least as Sun is saying it should be. — Lawrence Lessig Stanford Law School “All I Really Needed To Know About IP I Learned In Kindergarten” (with apologies to Robert Fulghum) Play fair. Don’t hit people. Put things back where you found them. Clean up your own mess. Don’t take things that aren’t yours. Say you’re sorry when you hurt somebody. Flush. P.S. Here are a few things that Fulgrum forgot to add: Smell the flowers along the way. Doodle, dream and always keep a sense of humor. Wear a bow tie. (It makes it easier to lean down and smell those flowers.) — Morgan Chu Irell& Manella *Excerpted from a January 2006 article written by von Lohmann, “What Peer-to-Peer Developers Need to Know About Copyright Law.”

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