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Archive for the ‘Law’ Category

Bloggers and the new FTC Guide

Posted in Law, tagged , , , on January 20, 2010| 2 Comments »

The FTC updated its Guide Concerning the Use of Endorsements and Testimonials in Advertising effective December 1, 2009, which concerns testimonials and endorsements on websites and blogs. Going forward, if you (or a user on your blog or website) represent results from the use of a product or service as typical when that is not the case, you will need to also disclose the results that most consumers can expect. This is different from the previous FTC Guide which allowed advertisers to use extremely positive results in a testimonial as long as they included the disclaimer such as “these results are not typical.” In addition, the revised Guide also requires that the relationship between a supplier of the product or services and the endorser to be disclosed. For example, if a blogger recommends a product on their blog that they received for free or were paid to discuss on their blog, the blogger is required to disclose this information in the blog. Similarly, if an employee recommends a product or service on a discussion board or blog, the employee is required to disclose that he or she is employed by the manufacturer or supplier of the service. The revised Guide seems to indicate that both endorsers and advertisers could be liable under the FTC Act for statements they make in an endorsement. This would include false or unsubstantiated statements and the failure to disclose a material connection between the advertiser and endorser. With respect to making statements about your or someone else’s products or services, honesty and full disclosure are the best policies. 

[This is an excerpt from my book coming out this year titled: The Legal Internet Guide for Small Businesses and Bloggers, which is an easy-to-understand question-and-answer legal guide for those blogging and doing business on the internet.]

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Will someone please decide whether software can be patented?

Posted in Law, Supreme Court, tagged , on January 16, 2010| 1 Comment »

 The U.S. Supreme Court recently heard arguments in the case of Bilski v. Kappos No. 08-964 (Supreme Court 2009). This decision could help determine whether software can be patented. The question in the lower court was whether a process can be patented. The lower court expanded its inquiry to whether or not software can be patented. Although this Federal Court did not rule that software cannot be patented, it apparently overruled the State Street decision. In State Street Bank & Trust v. Signature Financial Group, 149 F.3d 1368 (1998), the court determined that software programs that “transform data” are patentable subject matter even when there is no physical transformation of an article. The State Street court held that software or other processes that yield a “useful, concrete and tangible result” should be considered patentable and this rule has been followed, more or less, by the Patent Office ever since.

In Bilski the lower court indicated that the “useful, concrete and tangible result” inquiry should no longer be used to determine whether a process can be patented. Because this was the inquiry used to grant many software patents in the past, the Federal Court’s decision has called into question the validity of these existing software patents. The new test stated for determining that a process is patentable is if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”  The lower court ruling did not explain whether a software process operating on a computer is considered to be tied to a “particular machine or apparatus.”  If a computer is not deemed to be a particular machine, then many existing software process patent claims could be in jeopardy.  

The Supreme Court also took up the question of whether the lower court’s new “machine-or-transformation” test for patent eligibility, which eliminates patent protection for many business methods, including software, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business” in 35 U.S.C. § 273. During the arguments some of the Justices seemed to imply that siding with Bilski could open the door too wide for further patent applications, while other Justices felt the new test was too limiting. Regardless of how the decision comes out, at some point either the courts or the legislature need to clear up the confusion surrounding the ability to patent business process and computer software.

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The NFL and antitrust, again?

Posted in Law, Supreme Court, tagged , , , on January 12, 2010| Leave a Comment »

I have to admit, I wasn’t really following this case until I read a very articulate editorial by Drew Brees, a Quarterback for the New Orleans Saints and former Austinite, in the Austin American Statesman (1-11-10 – page A7). Apparently the Supreme Court will be hearing American Needle v. NFL, Supreme Court Docket No. 08-661; an antitrust case brought by an Illinois manufacturer of hats who lost its antitrust claim in the Federal Court of Appeals in Illinois (7th Circuit). The antitrust claim arose from the NFL’s granting an exclusive license to Reebok to manufacture NFL fan products such as hats, jackets and the like. As the Illinois company, American Needle, pointed out, the effective monopoly has in fact increased prices for such fan gear since Reebok was awarded the contract in 2001, and has prevented smaller companies from getting into the market. The Supreme Court will decide if the NFL should be considered one entity (in which case there is no monopoly because you can’t have a monopoly with yourself) or 32 separate entities (in which case they could be found to be conspiring to restrain trade in the fan product area). What Mr. Brees pointed out was that this ruling could also affect the NFL’s ability to monopolize other areas. Apparently the NFL made the unusual request to the Supreme Court that it rule the NFL is one entity for purposes other than just fan gear. The result which Mr. Brees fears is that such a ruling could effectively overrule the 1993 decision in McNeil v. NFL, 790 F. Supp. 871, 896-97 (D.Minn. 1992), a previous antitrust lawsuit against the NFL, which paved the way for free agency among football players. Depending on how far the Supreme Court goes, the decision in the American Needle case could have ramifications for free agency, ticket prices, and, of course, fan gear, in other sports as well.

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Steal from the poor and give to the rich?

Posted in Law, Supreme Court, tagged , , , on January 8, 2010| 1 Comment »

On December 11, 2009, a Motion to Reargue Appeal was filed in the New York Court of Appeals (highest court in New York – like a Supreme Court in other states) in the case of Goldstein v. New York State Urban Development Corporation, No. 178 (November 24, 2009) which decision had upheld the condemnation of a number of residential and commercial properties in order to make way for a private corporation to develop the land for high-end residential purposes as well as the building of a sports stadium. The condemned property was claimed to be “blighted” in a study introduced as evidence in the case (which label the residents and business owners who live there would most certainly take issue). The court indicated that the condemnation was permitted under New York law under the guise of economic development. You will remember that the 5th Amendment of the U.S. Constitution states that private property cannot be taken by the government for public use without just compensation. The 14th Amendment expands this limitation to state and local governments. Typically, this power of condemnation may only be exercised through delegation from the appropriate legislature to either an agency (for public parks, etc.) or a private corporation (for purposes of providing a public service, such as utilities or transportation).  What worries me, besides the very poorly worded opinion in Goldstein, is that the New York Court of Appeals seems to be taking the much-maligned approach in Kelo v. City of New London, 545 U.S. 469 (2005) a step further away from the Constitution.

In Kelo, a U.S. Supreme Court case, a bare majority of 5 Justices — Stevens, Kennedy, Souter, Ginsberg, and Breyer, ruled that private property could be taken for redevelopment by a private corporation when new jobs and taxes are created.  O’Connor, Rehnquist, Scalia, and Thomas dissented.  Kelo had further expanded the holdings in two previous cases, Berman v. Parker, 348 U.S. 26 (1954) and Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984), which allowed condemnation to eliminate “blight.”  The pathetic end to this matter outside of the court is that in November 2009, Pfizer, the private corporation whose promises prompted the condemnation action, announced that not only would it not be developing the property, but that it would be closing the existing New London facility.  Thus, the promised jobs and taxes that were the stated reason for people being removed from their land will never come about anyway.  Talk about adding insult to injury.

In response to Kelo, in 2006, an executive order was issued limiting the federal government’s use of condemnation proceedings  “…for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.”  Although this only applied to federal proceedings, many states did change their condemnation laws to follow more closely the Executive Order than the Kelo Supreme Court ruling.  Obviously, New York was not one of them.

If this Goldstein case does make its way to the U.S. Supreme Court, what would be interesting to see is whether Souter’s replacement, Sotomayor, sides with the previous dissent making way for an effective reversal of Kelo?  I have no doubt that the framers of the “takings” clause of the Constitution did not intend it to be used to force landowners off their land for the benefit of private corporations.  What will Sotomayor do if given the chance?

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Is blogging better than going to court?

Posted in Law, tagged , , on January 3, 2010| 6 Comments »

On December 30, 2009, the 9th Circuit (US District Court – Northern California) issued an opinion in the case of Birdsong, Waggoner, et. Al. v. Apple, Inc., No. 08-16641 (DC No. 5:06-CV-02280-JW) finding that even though the iPod’s ear buds can project sounds into the ears of up to 115 decibels, the plaintiffs in this case were not in fact injured (i.e., did not suffer hearing loss themselves) and thus did not have standing to sue. In addition, the court noted that the iPods did not cause hearing loss while using ear buds unless the volume was turned up significantly. Because the iPods could be used without turning the volume up (an obviously unsafe use), the decision to dismiss the class action suit was upheld. Although the plaintiffs claim that they were seeking to have Apple adopt safer features, the court was correct in indicating that filing a class action suit was not the best way to go about this. Perhaps the Plaintiffs could learn something from Jeff Jarvis who posted his issues with Dell in 2005 on his blog buzzmachine.com. Apparently, this tactic worked. Dell responded with its own direct2dell.com blog and worked to resolve its customer service issues. What we are seeing, and which should really be acknowledged for its power, is that blogging CAN be used successfully to resolve issues that a mere decade ago could only garner national attention by going to court. A blog with a wide readership has enormous potential to affect positive corporate and societal change. I believe this trend with be proven out in the years to come. Not only is blogging a faster way to reach your target audience, it is much cheaper than going to court.

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Police – take note: you can no longer Taser anyone you want

Posted in Law on December 31, 2009| 6 Comments »

On December 28, 2009, the 9th Circuit (US District Court – Southern California) issued an opinion in the case of Carl Bryan v. Brian McPherson; Coronado Police Department; and City of Coronado, No. 08-55622 (DC No. 3:06-CV-01487-LAB CAB) finding a police officer used excessive force when Tasering a young man who was stopped for not wearing a seatbelt.  The officer, without warning, Tasered the unarmed young man in the back from 15 – 25 feet away.  As I’m sure you are aware there have been a number of cases in the recent press regarding police officers Tasering everyone from little girls to tiny Grandmas.  Finally, a court recognizes that police officers can’t Taser someone out of anger – there has to be an actual threat to the officer.  Hopefully, police departments across the nation will take note of this finding of excessive force in violation of the Fourth Amendment.

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New FTC Guidelines – Bloggers and Website Owners

Posted in Law on December 24, 2009| 3 Comments »

The FTC recently updated its Guide Concerning the Use of Endorsements and Testimonials in Advertising effective December 1, 2009 which concerns testimonials and endorsements on websites and blogs. Going forward, if you (or a user on your blog or website) represent results from the use of a product or service as typical when that is not the case, you will need to also disclose the results that most consumers can expect. This is different from the previous FTC Guide which allowed advertisers to use extremely positive results in a testimonial as long as they included the disclaimer such as “these results are not typical.” In addition, the revised Guide also requires that the relationship between a supplier of the product or services and the endorser to be disclosed.  For example, if a blogger recommends a product on their blog that they received for free or were paid to discuss on their blog, the blogger is required to disclose this information in the blog. Similarly, if an employee recommends a product or service on a discussion board or blog, the employee is required to disclose that he or she is employed by the manufacturer or supplier of the service. The revised Guide seems to indicate that both endorsers and advertisers could be liable under the FTC Act for statements they make in an endorsement.  This would include false or unsubstantiated statements and the failure to disclose a material connection between the advertiser and endorser.

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Confronting Accusers

Posted in Law on December 21, 2009| 2 Comments »

In June, the U.S. Supreme Court ruled in Melendez-Diaz v. Massachusetts, (129 S.Ct. 2527 (2009) that prosecutors cannot introduce a crime lab report into evidence without making the analyst available at trial.  Despite the fact that this ruling is only six months old, the U.S. Supreme Court has agreed to hear this issue again on January 11, 2010, with a new set of facts in the case of Briscoe v. Virginia, No. 07-11191.  Because the Court was split 5-4 in the June decision (with Souter in the majority), it will be interesting to see if the ruling will be different this time with Sotomayor now the in place of Souter.  To me it should be very obvious that the preparer of a report that can result in serious jail-time should be subject to the defense’s scrutiny and cross-examination.  Of course, others will say that this puts a burden on the already overworked crime lab personnel if they have to appear in court every time a report they prepared is used.   However, the Sixth Amendment to our Constitution requires that a defendant be afforded the opportunity to confront witnesses against it, and what could be a more damaging “witness” than a lab report.  With all of the cases where new DNA tests are resulting in the release of innocent people from prisons and the public’s willingness to embrace forensics as gold because of the popularity of shows like CSI, shouldn’t we at least be able to question the people who actually prepared the damaging reports at the initial trial?

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COHIBA Cigars

Posted in Law on December 18, 2009| 4 Comments »

In Empresa Cubana del Tabaco (Cubatabaco) v. Culbro Corp. and General Cigar Co.,  97 Civ. 8399 (S.D.N.Y. 2009) the Federal Court in the Southern District of New York has reversed a number of previous rulings in this case and granted Cubatabaco an injuction which would effectively stop General Cigar from using the name “COHIBA” on its cigars.  This is a very interesting case from an intellectual property standpoint because, as we all know, there has been an embargo on Cuban Cigars for over 4 decades.  Trademark misappropriation occurs under New York law when a company intentionally uses someone else’s mark which is commonly associated with a foreign company.  Although there appears to be conflicting law on whether “bad faith” is required, the Court indicated that under the present facts, the use of the “famous” cigar name by a U.S. company could damage the goodwill in the authentic Cuban brand’s name.  The Court did, however, order that enforcement of the injunction be delayed until General Cigar has a chance to appeal this part of the judgment.  What makes this decision noteworthy is that the U.S. Court has seemingly indicated that a foreign company has common law intellectual property rights in the U.S. even if it is not selling goods here.

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Hello world!

Posted in Law on December 15, 2009| 7 Comments »

As a Libertarian, I strongly believe in the rights of the individual.  A recent Ohio Supreme Court decision made me smile.  In State v. Smith, Slip Opinion No. 2009-Ohio-6426, the Court held that a police officer cannot search someone’s cell phone contents without a warrant unless the officer’s safety is in danger.  This is an important protection for those of us who keep much of their personal information on their cell phones.  It is possible that this case will be appealed to the U.S. Supreme Court which could result in a different ruling.  As always, a police officer can search the contents of your phone if you give the officer your permission.  In a world where our privacy rights seem to be shrinking every day, I’m glad that some Court’s are still upholding our Constitutional rights.

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