Law and Tech A weblog on Law and Technology


BrewHaHa over beer label

Flying Dog Brewery (Frederick, MD) has filed a lawsuit against the Michigan Liquor Control Commission the U.S. District Court in Michigan's Western District.   The suit involves the commission's November 2009 decision to deny an application by the brewery to sell its 'Raging Bitch' beer in Michigan due to the allegedly provocative nature of the label.

Flying Dog argues that the commission's decision is unconstitutional and violates the brewery's first amendment rights to free speech.  The brewery is asking the court to mandate the issuance of a sales license in Michigan for Raging Bitch and is seeking unspecified compensatory damages from the commissioners as well as attorney fees.

In their complaint, the plaintiffs state,  "[b]eer bottles should be regulated not by the expression of their labels, but by the character of their content...[r]egrettably, the Michigan Liquor Control Commission and its members have taken it upon themselves to control not merely alcoholic beverages, but speech as well."

The commission is given the authority by the Michigan legislature to control all alcoholic beverage traffic in the state and to reject any beer label submitted for registration that is deemed to promote racism, sexism, intemperance or intoxication, or to be detrimental to the health, safety or welfare of the general public.

Flying Dog applied for a license to sell Raging Bitch, the company’s 20th anniversary commemorative beer, in the state of Michigan in September 2009. According to the suit, the commission looked at the proposed label by Flying Dog and "did not feel it was appropriate for distribution and sale in Michigan."

The Raging Bitch label's artwork was designed by British artist Ralph Steadman, who works with Flying Dog to produce illustrations for the brewery's corporate images.  The Raging Bitch label depicts drawing of a female dog and reads, in part:

"Two inflammatory words ... one wild drink. Nectar imprisoned in a bottle. Let it out. It is cruel to keep a wild animal locked up. Uncap it. Release it ... stand back!! Wallow in its golden glow in a glass beneath a white foaming head. Remember, enjoying a RAGING BITCH, unleashed, untamed, unbridled—and in heat—is pure GONZO!! It has taken 20 years to get from there to here. Enjoy!" — Ralph Steadman

Flying Dog created Raging Bitch, a Belgian-Style India Pale Ale, to celebrate the brewery’s 20th anniversary in 2010.   In addition to the controversy in Michigan, sales of the beer have also been banned in New Hampshire.  (Another Flying Dog beer, Road Dog Porter, is banned in Texas.)

Flying Dog CEO Jim Caruso and Alan Gura (an attorney with Gura & Possessky (Alexandria, Va), the firm representing the brewery) announced the filing of the case at Crunchy’s, a craft beer pub near the Michigan State University campus in East Lansing.




Organic Farmers File Suit Against Monsanto

The Public Patent Foundation (PUBPAT) filed suit on Tuesday, Marc. 29, against the biotech giant Monsanto as  a preemptive measure to protect farmers from patent infringement lawsuits.   The suit was filed in the federal district court in Manhattan on behalf of 60 family farmers, seed businesses and organic agricultural organizations. 

The case, Organic Seed Growers & Trade Association, et al. v. Monsanto is intended to protect farmers from legal action by Monsanto when their crops are contaminated by Monsanto's patented, genetically modified (GM) seed.  According to the law,  Monsanto is entitled to sue farmers  if its GM seeds are found on a farm that did not purchase a license for the seed from Monsanto, even if the crops were contaminated from seeds drifting over accidentally or though natural cross-pollination.

Once in the environment, GM seeds can potentially contaminate and destroy the organic seed for similar crops.  Organic canola has become seriously threatened as a result of contamination from GM canola.  Because Monsanto is developing genetically modified seed for many other crops, such as corn, soybeans, cotton, sugar beets and alfalfa, many fear that the future of agriculture, and thus the future of the food supply,  are at risk.

Dan Ravicher, PUBPAT's Executive Director, Lecturer of Law at Benjamin N. Cardozo School of Law in New York, and the plaintiffs' lead attorney in the case stated that PUBPAT is asking the court to declare that if organic farmers are contaminated by Monsanto's GM seed, they should not be liable for patent infringement.  PUBPAT's filing argues that Monsanto's patents on genetically modified seed are invalid because they don't meet the “usefulness” requirement of patent law, and cites evidence that genetically modified seeds have negative economic and health effects.

“Some say transgenic seed can coexist with organic seed, but history tells us that's not possible, and it's actually in Monsanto's financial interest to eliminate organic seed so that they can have a total monopoly over our food supply,” said Ravicher.  “Monsanto is the same chemical company that previously brought us Agent Orange, DDT, PCB's and other toxins, which they said were safe, but we know are not.  Now Monsanto says transgenic seed is safe, but evidence clearly shows it is not.”

Monsanto, in a statement on its blog called the suit's allegations "false, misleading, and deceptive," and went on to say,  "[i]t has never been, nor will it be Monsanto policy to exercise its patent rights where trace amounts of our patented seed or traits are present in farmer’s fields as a result of inadvertent means."

Ravicher said, however, "[i]t seems quite perverse that an organic farmer contaminated by transgenic seed could be accused of patent infringement, but Monsanto has made such accusations before and is notorious for having sued hundreds of farmers for patent infringement, so we had to act to protect the interests of our clients.”



In the News: Monsanto Seed Investigation

The Department of Justice has issued a civil investigative demand (CID) to request information on Monsanto's soybean business practices.  The demand is aimed primarily at Monsanto's claim that it will not block access to the GM soybean at issue once the patent expires in 2014.

Monsanto is currently under investigation by the DOJ for complaints of anticompetitive behavior involving its RoundUp Ready seed technology.

CIDs can consist of a request for the production of documents, a demand for oral or deposition testimony, service of interrogatories requiring a written response, or a combination of the above.  CIDs can be a more powerful device than subpoenas, which are limited to document request.  Through using CIDs, the government can conduct discovery before the defendent has a chance to conduct its own discovery.

Monsanto's press release on the CID can be found here.


i4i LP v. Microsoft Corp.

In a two page order filed 8/11 in the Eastern District of Texas, Judge Leonard Davis entered final judgment against Microsoft for willful infringement of U.S. Patent No. 5,787,449 (issued Jul. 28, 1998) assigned to Infrastructure for Information Inc. The patent covers a “Method and system for manipulating the architecture and the content of a document separately from each other.” What is ironic about this is that Microsoft was recently issued U.S. Patent No. 7,571,169 (issued Aug. 4, 2009) covering a “Word-processing document stored in a single XML file that may be manipulated by applications that understand XML.”

This reminds me of one of the, albeit at first confusing, maxims of patent law. A patent is a right to exclude others from making, using, selling, importing, etc. the patented invention. It does not give an affirmative right to the party to do any of those acts. The example that commonly exemplifies this is the case of an improvement. Adam makes a widget out of A and B. Bill comes along and improves upon the widget, adding element C. Both get patents on their invention. Bill is unable to fully exercise his invention because Adam holds the original patent, and Adam cannot make the improvement because of Bill.

Microsoft was ordered to pay $200M in damages, $40M in enhanced damages, post-verdict damages, as well as pre-and-post judgment interest. The court also ordered a permanent injunction, barring Microsoft from, inter alia, “selling, offering to sell, and/or importing in or into the United States any Infringing and Future Word Products that have the capability of opening a .XML, .DOCX, or .DOCM file (“an XML file”) containing custom XML” during the patent term. The patent expires 17 years from the date of issue, July 28, 2015.

According to SEC filings, “[t]here are over 50 other patent infringement cases pending against Microsoft, 10 of which are set for trial in fiscal year 2010.“


High Speed Trading

The New York Times reports on High Speed Trading, using a loophole in the market large firms are cashing in by being able to see trades 30 milliseconds faster than the rest of the market. This coupled with co-location of computer systems give these large firms like Goldman Sachs an advantage as they are able to execute automated trading using these computers faster than it takes to blink. These came to light when a former employee of Goldman was arrested for allegedly stealing the software code that runs these machines.

The inequity that high speed trading gives these large corporations billions of dollars a year, all on the backs of the little investor who certainly can not compete with the technology of these behemoths. It appears time for the SEC to step in and regulate, at least investigate, these practices.

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