First Sale Doctrine: In Like a Lion, Out Like a Lamb

In Mid-March, the Supreme Court issued its decision in Kirtsaeng v. John Wiley & Sons, Inc., ruling that a consumer’s rights to resell a purchased copyrighted work under the “First Sale Doctrine” preempts an author’s right to control the importation of his works. This decision was met with cheer from those seeking weaker copyright protection and the freer movement of content, including librarians. It didn’t take long, however, for the judiciary to limit the First Sale Doctrine along a new dimension.

Scaling back the First Sale Doctrine, Judge Richard Sullivan of the Southern District of New York handed down a summary judgment ruling determining that ReDigi, a service that facilitates the sale of previously-purchased digital music, could not escape liability via the First Sale Doctrine. Notwithstanding the results of this case, Apple and Amazon appear to be exploring mechanisms for the licensed resale of digital music.

A Bit More on Digital Copyright

Speaking of the limitations of digital copyright, Slate posted an indictment of the Digital Millenium Copyright Act from a researcher in digital security in consumer products. He notes the breadth of the law’s definition of “circumvention” of security measures and the narrowness of its exception for research.

Aereo

Proponents of broader exceptions under the DMCA did see one victory this week, however, as the Second Circuit affirmed the denial of an injunction against Aereo, a company which uses arrays of antennae to retransmit over-the-air television content over the internet to its subscribers. Much to the chagrin of television broadcasters, the court found that Aereo’s service was legally indistinguishable from the retransmission practice that was found protected in Cartoon Network, LP v. CSC Holdings, Inc.

Motion in Mobile: MetroPCS, Mohave Mergers and More

The FCC has approved T-Mobile’s plan to acquire discount carrier, MetroPCS, and the plan has been met with some favorable reviews from the perspective of the public interest, though investor advisory firms have panned the terms of the offer.

Verizon announced plans for 3G and 4G LTE buildout upon completion of its acquisition of the Arizona mobile carrier, Mohave.

AT&T has sought to stave off the increasing belief that mobile carriers are shifting towards becoming mere “dumb pipes.” AT&T’s development of innovative services was the subject of an executive’s talk at Venture Beat’s Mobile Summit this week.

“Predictive coding”, also referred to as “technology-assisted review” or “content-based advance analytics,” is a technique for sorting through enormous collections of Electronically Stored Information (“ESI”) in order to produce only those documents which are responsive of an opposing litigant’s request and which are not subject to a privilege exempting them from discovery. There are multiple approaches to predictive coding, but the basic process begins when a computer creates a set of rules derived from the review and subsequent indexing (or “coding”) of a sample set of documents by the party responding to the discovery request. Those rules are then applied to the entire set of documents, producing a set of only those documents that conform to the rules established in the sample. Samples of the excluded documents are then evaluated and recoded, the rules are adjusted accordingly, and the process is iterated until the parties are sufficiently confident that the documents found by this process are only those necessary to fulfill the obligations of discovery. Usually, those documents are then reviewed by human eyes.

Predictive coding is an alternative to the more traditional “keyword search.” Keyword searches rely on human review of documents that contain any of a set of keywords, as defined through discussion among litigants. A keyword search reviews only a limited set of results; it is not, like a predictive coding search, a review of the entire body of ESI. Though they remain relevant–even preferable in certain situations–keyword searches have frequently been compared to a game of “Go Fish.” Stated perhaps less derisively “[s]earching for an answer on Google (or Westlaw or Lexis) is very different from searching for all responsive documents in the FOIA or e-discovery context.” Nat’l Day Laborer Org. Network v. U.S. Immigration & Customs Enforcement Agency.

2012 marked the first time a court compelled the use of predictive coding in discovery over the objection of a party. See Global Aerospace v. Landow Aviation. Similarly, In EORHB, Inc. v. HOA Holdings, LLC, Delaware’s Chancery Court, sua sponte, requested that both parties not only use predictive coding but also use a common provider.

The rulings of two other courts on predictive coding, however, reveal precisely where the battle for the future of e-discovery will be fought: in the details of the process (this is confirmed by academic proponents of the technology).  The marquee case on predictive coding of the year, Moore v. Publicis Groupe SA, like Global Aerospace, compelled the use of predictive coding over the objections of a party. Unlike Global Aerospace, however, the objections in Moore were over the procedure for executing predictive coding, not the use of the technology itself. Similarly, an Illinois court refused to step in to demand the use of predictive coding in Kleen Products LLC v. Packaging Corp. of Am., for fear that the litigants would not be able to come to a mutually permissible plan for implementing the technology.

In many of these cases, the courts rely on the recommendations of the Sedona Conference, a forum that recommends best practices for e-Discovery. The Sedona Conference’s proposals are published and submitted to the judiciary for their perusal, and sometimes endorsement. The Sedona Conference envisions a cooperative discovery process, in which the litigants agree on the standard for confidence in the system’s accuracy (e.g., Is it sufficient to re-sample the excluded set three times? Or must the responding party test the set four times?).

The current dialogue on predictive coding demonstrates two important points: (1) its inevitable proliferation is all but certain, and (2) opposing litigants will need to cooperate in order to ensure its effectiveness. As this article (also linked above) demonstrates, the technology–particularly its shortcomings–is misunderstood. With such misinformation, and the fear it induces, the cooperation necessary for the beneficial use of predictive coding will be elusive. Legal practitioners should quickly become more acquainted with this technology, its benefits and criticisms, and the newly expanding body of law surrounding it so that their first reaction to the words “predictive coding” is not one of fear, but of hope for a cheaper, faster, and more accurate discovery process.

In response to an ex parte re-examination proceeding, the United States Patent and Trademark Office issued a tentative decision invalidating all 20 claims of Apple’s patent for “rubber-banding” in its UI, which was a personal favorite of Steve Jobs. The USPTO found that this patent was invalid because it was anticipated by prior art.  This patent is a key component of the portfolio of “multi-touch” patents at issue in the blockbuster Apple v. Samsung case.

Analysts over at FOSSPatents have provided a preliminary look at the mixed bag of potential implications of the USPTO’s ruling on that litigation.

Unfriendly FRAND, and the Federal Trade Commission Does a Google Search

The Federal Trade Commissions cases against Samsung and Google subsidiary Motorola Mobility for fast-forwarding to litigation instead of seeking licenses on standard-essential patents that are subject to “Fair Reasonable and Non-Discriminatory” continue. In their proceedings, Samsung has released portions of a presentation apparently demonstrating Apple’s attempt to charge prices far above FRAND levels. Meanwhile, Google is apparently contemplating settling with the FTC even as the agency begins a separate antitrust investigation inquiring into whether Google is using its dominance in the search industry to promote its own products and services

Cyber-terror

A recent cyber-attack on a Saudi-owned oil company prompted concerns that cyber-terrorism is getting easier and more accessible to less sophisticated hackers. Meanwhile, if you want to protect yourself from cyber attacks, make sure your passwords don’t appear on this list.

Facebook Potpurri

Facebook C.E.O. Mark Zuckerberg reported higher-than-expected revenue for the company. Much of that revenue, Zuckerberg reported, was driven by ads on mobile devices, even in advance of its impending overhaul of its Android app.

Meanwhile, Facebook game developer Zynga laid off over 100 employees in the wake of declining earnings.

In other Facebook news, a Texas woman was arrested for identifying an undercover police officer by posting his photograph on Facebook.