Law and Tech A weblog on Law and Technology


Biotech and Bilski

BIO, the Biotechnology Industry Organization, filed an amicus brief  last Thursday asking the Supreme Court to overturn the Federal Circuit decision in Bilski v. Doll, a decision which created the "machine-or-transformation" test in which a method or process is only patentable if it is tied to a machine or if it transforms an article or substance into something different.

BIO joins many other industries who have voiced concerns about the uncertainty of the MOT test as applied to their technologies.  For the biotech industry, BIO points out how biological, diagnostic, and other medicinal method patents could be challenged by the MOT test resulting in negative impacts on the biotech industry.

 A key concern is that investors will shy away from the industry due to a lack of confidence in biotech patents as a vehicle for recouping research and development costs. Developing products in the biotech industry is an expensive and lengthy process often involving scientific research, clinical trials, and regulatory approval.  Without strong, enforceable patent rights, it is doubtful the industry could survive and innovation would be stifled.

Clarification on the issues presented in Bilski is certainly warranted in regard to biotech IP.  The MOT test does not seem to translate well into the biotech area.  For example, the natural phenomena utilized to produce biotech patents are not analagous to the abstract ideas utilized to produce business method patents.  A distinction cannot easily be made between patentable and nonpatentable subject matter in biotech by requiring a machine or transformation.  Photosynthesis is a process that could pass the MOT as it transforms carbon dioxide, but should not be patentable as it is a natural occuring process.  But by the same test, a diagnostic method would be deemed unpatentable if it does not incorporate a machine or if the patient is not "transformed." For biotech, a better test would better focus on whether something is a man-made biological process or a naturally occuring biological process.

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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.


Amazon is watching…

As the NY Times reports, unbeknownst to Amazon’s Kindle customers who purchased e-books of George Orwell’s 1984 and Animal Farm, the titles were secretly deleted from their owners devices. The books were deleted and customers accounts credited because the books were added to the Kindle store by a company that did not have rights to them. As comments rolled in on the Times’ Bits blog many questioned what it means to own an e-book.

Different protections exist for the protection of dead trees of older tech and the ones and zeros of the new age. These differing schemes afford the purchasers of the different media different rights with respect to their copy of the same underlying work. Technology and norms create differing schemes for protecting content owner’s rights. For instance, copyright law’s first sale doctrine (17 U.S.C. 109) gives the owner of a copy of a copyrighted work the ability to sell the copy without needing authorization of the copyright holder. This right does not extend though to works that are acquired through “rental, lease, loan, or otherwise, without acquiring ownership of it.” 17 U.S.C. 109(d). Here we see law work in tandem with societal norms: “I own this book, I can do with it like I please.”

Moving to the digital age where the norms have not been set in stone there are many differences. Some differences are technological while others are differences in the norms of the medium. Digital files are easily distributable due to networks like the Internet and can be copied from one device to another easily without destroying the first copy. The ease of making a perfect copy creates a different landscape than in the world without digital files. The other major difference is that the copy that the user has does not degrade over time, unlike “real” copies. (Though, it can be argued that in an ever evolving world of file formats, a single file’s shelf life may not be that long as a new file format supersedes it without backwards compatibility without an easy conversion process.) Also, with a change in medium also created a change in the way works are distributed. From one where the consumer “owns” the product to one where they merely license it. These ease of license agreements and limitations of use of the product are due, in part, to the ease the works are transmitted. This ease worried copyright holders and so they have lashed back and educated the public that file sharing and other forms of digital distribution are wrong (morally and legally). Also through the introduction of DRM and other digital locks, it became more difficult to freely and easily transmit files. Norms were created that said “I can use this book, but I cannot share it with anyone else.” And so, while it was commonplace for people to share a CD, book, or video game, due to new norms, locks, and licenses digital versions of the same works are effectively for the purchaser only.

It is interesting to see the immense freedom (anarchy) the digital landscape provided originally created a world in which there is more
control over content than ever. It appears in the future we will see more tactics like Amazons to retake the data they sold the user. Like the article noted: “it’s like Barnes & Noble sneaking into our homes in the middle of the night, taking some books that we’ve been reading off our nightstands, and leaving us a check on the coffee table.”


Wikipedia, a market approach to copyright?

Copyright gives the owner of the copyright an exclusive right to distribute and display their images. 17 U.S.C. 106. This exclusivity
creates an effective monopoly on a particular creative work. In some instances this exclusive right gives the owner a lot of bargaining power
when dealing with those who want to use the content. (Just look at the music and movie industries, piracy aside.)

The NY Times reports that Wikipedia has a strong policy of using works that are licensed under a very unrestricted Creative Commons license which professional photographers are weary of. Because of this, Wikipedia does not have many good photographs of celebrities. But, at the same time celebrities want their (good) pictures on Wikipedia. But, because of the licensing restrictions on Wikipedia, if it can go there anyone can basically take and use the content – much to the chagrin of the photographers.

The article finishes with a quote from celebrity photographer Jerry Avenaim: “To me the problem is the Wikipedia rule of public use . . . If they truly wanted to elevate the image on the site, they should allow photographers to maintain the copyright.” It appears that as Wikipedia becomes more indispensable we’re going to see a much greater push of celebrities to get pictures of their likeness on the site licensing restrictions on the part of Wikipedia or not. Celebrities may eventually push for some photos of them to be distributed with a CC or other “copylite” licenses. In this case it’s Wikipedia’s relative exclusivity that beats out the content owner.


One Expensive Playlist…

As reported, the Jammie Thomas-Rasset verdict was announced, $1.92M to the music industry's largest players. This is after she "won" a retrial after the Judge ordered a retrial for an imprecise instruction in the first trial which the jury rendered a comparatively minuscule $222,000 verdict. But, as Thomas said, "Good luck trying to get it from me... it's like squeezing blood from a turnip." This reopens the question as to whether the sky is truly the limit as to damages. Especially as to statutory (compensatory) damages for copyright infringement, which is thousands of times more than the cost of the 24 songs she infringed.

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