- In This Issue -



An ePublication of the Los Angeles County Bar Association
Volume 1, Number 3 • June 2011 • Archives of Past Issues
ELIPS Home Page

Message from the Chair

It has been a wonderful year for ELIPS. Thanks so much to all of you whose work made it happen.

On every score, we built on the solid foundation set by my predecessor, Allison Brehm, and our predecessors before her, and we are ahead of where we were a year ago.

We initiated a new generation of electronic communication with you, our members, including this newsletter and various social networking sites.

We initiated a series of informal networking evenings at various local bars and restaurants.

We put on a string of outstanding CLE programs.

We put on two successful evenings at art museums.

We put on a hugely-attended "Day In The Life" program to orient law students to the possibilities of career and practice.

We had a hard-working and deeply committed Executive Committee, to whom we all owe thanks and appreciation for their hard work.

We had devoted effort from Fatima Jones, our staff Section Coordinator, and the rest of the County Bar's staff, from Executive Director Sally Suchil on down, and also from the County Bar's President, Alan Steinbrecher, and many of the volunteers.

For me, the year as Chair was easy and fun. Not once did I go home and kvetch to my family about "problems at ELIPS." There were none. In our unrelenting effort to serve our members better, there were many challenges and opportunities. The Executive Committee always pulled together, worked as a team and got the job done. And, always in a first-class way, with a smile, a handshake and pats on the back all around. The most collegial, professional and effective group of its type with whom I have ever worked. I cannot thank them enough.

To you, our members, deep thanks as well. It was in your service that we were all constantly inspired to do more and better. I and the entire Executive Committee thank you for the vote of confidence you cast year after year with your membership in the section.

To next year's Chair, Dominique Shelton, I wish the same kind of support you all so enthusiastically gave the Section this year. With that support, Dominique, the Executive Committee, and the Section will accomplish ever more, and record the best year ELIPS ever had. I can't wait to see it happen.

Thank you all once again.

Sincerely,

Jeff Kichaven

Interview with Randa Soudah, Vice President, Assistant General Counsel, at CBS

Ms. Randa Soudah is Vice President, Assistant General Counsel, at CBS and works in the Litigation and Labor and Employment Departments. Ms. Soudah attended law school at New York University. After graduation, she served as a law clerk for the Honorable William H. Walls, Judge of the United States District Court for the District of New Jersey. She then joined the law firm of Willkie Farr & Gallagher LLP in New York in 1997 where she practiced general business litigation. Ms. Soudah joined CBS in 2001.

Ms. Soudah was interviewed by Tami Kameda, associate at Kelley Drye / White O'Connor. Questions appear below in italics, and Ms. Soudah's responses follow in plain text.

Did you always know that you wanted to pursue a career as in-house counsel?

At my law firm, I worked closely with in-house counsel for our various clients and developed an understanding of the role they played for their companies. It seemed like a great job where you could focus on what are, in my opinion, some of the more enjoyable aspects of being a lawyer. So I thought that would be a good position to work toward, and I was especially interested in working for a media company because of the types of issues you would typically get involved in. As an associate at Willkie, I did a fair amount of work representing a large media company on a variety of matters, including First Amendment-related actions and employment litigation, and the work was always very interesting and fun. Working for that client solidified my interest in going in-house at a media company.

In your time at CBS, what changes have you seen in your profession?

Everything has changed so much, and so fast, with the internet and interactive media. In this new age of information, the issues that are coming up are endlessly interesting and challenging. A recent case, Tamkin v. CBS Broadcasting, Inc., is an excellent example of a defamation claim that we would not have seen a few years ago. The case arose when the plaintiff googled himself and found allegedly defamatory material on fan "spoiler" websites devoted to the show CSI. First, the plaintiff would not have been googling himself years ago. Second, those "spoiler" sites wouldn't have existed before either. New media technology can help us but it can also hurt us, when you don't have control over what is out there. It becomes an issue of maintaining control over content while at the same time looking to what is out there to promote that content. One of the challenges is trying to adapt the way we look at things to a completely new technology. An example is in the labor relations context, where it affects negotiations with the guilds and creates disputes over whether and how people should be compensated for the use of content online.

And in the employment arena, we see the rise of the role of social media in the workplace, which creates a tension between enforcement of company policies with an employee's asserted right to free speech and really extends the boundaries of what constitutes workplace activity. And of course, with the economic downturn, there has been a tendency towards more claims and litigation as I think people become more anxious about their livelihood.

What do you think best prepared you for your position?

Training in litigation is valuable when you go in-house. The skill set you learn as a litigator gives you the ability to help your clients navigate difficult waters. As a litigator, you essentially become trained to look at things in a certain way. When a dispute arises you can see down the line and anticipate how it might play out. Someone may call me while drafting a contract with a concern, and I am able to tell them from a litigation standpoint that in my experience I have never seen a dispute over that particular issue, or conversely, that disputes over that particular issue are common.

My experience at Willkie was also valuable. I was provided with the opportunity to interact regularly with our clients. I learned that it was not just about how to win the case, but that you have to consider the business interests in determining how to proceed. Winning the case may not always be consistent with the long-term goals of the client, or a business resolution may be preferable.

In many cases litigation is about relationships – personal or business - that have gone bad. There is always a lesson to be learned. I have been able to use my experience of having learned those lessons and apply them to help clients and give advice.

Do you have any advice for attorneys who want to pursue an in-house position?

First, develop relationships. A lot of in-house positions are opportunities that you learn about from friends and colleagues. Express that going in-house is a goal of yours. Put the word out that you are interested.

Also, as in-house counsel, a lot of what you are called upon to do is to problem solve and to give the best legal advice you can but with the understanding of business goals. During an interview, it is important to be able to give examples of your skill set of problem solving. In this profession, we are partners with our clients. We are always providing advice and have to understand the business, have to understand client needs. It's really easy to say no, you can't do this or that. But the challenge is to help a client achieve its goals within what is appropriate. And sometimes the answer really is - no. But in most cases, you are giving the best advice you can and helping your clients balance their risks or trying to limit their downside. These are all valuable skills to develop

What do you find most satisfying about your job?

So many things. First and foremost, I enjoy the people I work with, in my department, our corporate clients, and our outside counsel. Helping our clients try to navigate through a particularly thorny set of circumstances to get to a favorable resolution. Working as part of a team to try to resolve issues and get the best results. Of course, litigating and winning when your position has been vindicated. The day to day advocacy we engage in. Also, in my position, I'm fortunate to be able to work with nearly all divisions and businesses within our corporation, and the exposure to those businesses is a continuous education for me. Every day I learn something I didn't know before – everything from how a television show gets on the air to the details of how we sell our product. There are so many interesting things to learn about our business and it's always changing.

Privacy and Mobile Phone Applications
Article by Sasha Barbour

On April 5, 2011, as part of a continuation of their ongoing analysis and reporting related to privacy and data collection practices in the online world, the Wall Street Journal published an interesting article stating that mobile application (app) makers face federal investigations as to "whether numerous smartphone applications illegally obtained or transmitted information about their users without proper disclosures".(i)

Pandora Media Inc., the popular online music service, whose app was reported to have "transmitted information about a user's age, gender, and location, as well as [the] unique identifiers for the phone, to various advertising networks"(ii) was cited in this article as having "received a subpoena related to a federal grand-jury investigation of its information-sharing practices by smartphone applications." As a part of registering Pandora's app, the Wall Street Journal reports age and gender information is requested.(iii)

Though app makers may not think they are "doing anything wrong,"(iv) as counsel to such clients, it is important to remember that there are numerous laws on the books, both at a federal and state level,(v) related to privacy that trigger criminal and or civil liability to entities that collect information without proper notice to or authorization from the user of such applications and websites. Special rules apply to minors.(vi)

Since there has been an explosion of apps in the past years due to the popularity of smart phones and a since many of the apps are geared with young, entertainment seeking consumers in mind, app makers have increasingly focused on this market.(vii) Further, the value proposition of these apps and upon which app makers' business models are based are the ability to collect user information in order to sell advertisement, products or services as well as to engage in target marketing and brand building endeavors. Many app business models derive their value not so much from the app's function but by the ability to gather user information for purposes of developing the user profile among other things. According to Gartner Inc.,(viii) spending on mobile advertising is expected to reach $7.5 Billion in 2012 from $530.2 Million in 2008. (ix)

On the civil law side, late last year, Apple has been compelled to confront a class action in the Federal District Court for the Northern District of California involving "intentional interception of users' personally identifying information… by using iPhone and iPad mobile device applications" without users' consent.(x)

In the case of the recent federal probe reported, it "centers on whether app makers violated the Computer Fraud and Abuse Act" (CFAA). Although originally "intended to reduce cracking or "hacking" of computer systems and to address federal computer-related offenses," [the CFAA] "could be used to argue that app makers 'hacked' into users' cellphones". (xi)

Under the CFAA, depending on the offense, penalties range from 1 to 20 years of imprisonment and or payment of a fine.(xiii) Further, under Subsection (b) of the CFAA, punishment is for anyone who commits, attempts to commit and those who conspire to commit an offense under the CFAA.

Depending on the activity alleged, however, should the activity in question be found to be one of, "whoever conspires to commit or attempts to commit an offense by intentionally access[ing] a computer without authorization or exceeds authorized access, and thereby obtains information from any protected computer;"(xiv) then penalties include a fine and imprisonment for up to 5 years if the offense punishable was committed for purposes of commercial advantage or private financial gain.(xv)

"The term computer means an electronic, magnetic, optical, electrochemical, or other high speed data processing device performing logical, arithmetic, or storage functions…" (xvi) and, presumably include "smartphones", such as an iPhone or an Android OS phone- two popular smartphones which allow downloadable apps and are high speed data processing devices performing logical, arithmetic or storage functions as a matter of course.

"The smartphones are essentially a mini-computer, says Zach Womack, co-founder of Applicandy, a mobile application development company."(xvii)

It is worth noting that, under the CFAA, a "computer" is not an automated typewriter or typesetter, a portable hand held calculator, or other similar device.(xviii)

"The term exceeds authorized access means to access a computer with authorization and to use such access to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter."

Further, in addition to the fine and or imprisonment, other penalties that a court can impose on a person convicted under the CFAA include an order of forfeiture of such person's interest in any personal property that was used or intended to be used to commit or facilitate the commission of such violation; and any property, real or personal, constituting or derived from, any proceeds that such person obtained, directly or indirectly, as a result of such violation.(xx)

This forfeiture would also include any property, real or personal, which constitutes or is derived from proceeds traceable to any violation of [the CFAA].(xxi)

Incurring the risk of noncompliance may result in fines, a forfeiture of property and an extended "staycation" at Club Fed. Use of the CFAA by federal prosecutors and any conviction they may obtain due a violation of this law would serve as a powerful tool to compel compliance with applicable privacy laws.

Conclusion:
When advising mobile application company clients, it is suggested that lawyers:

1. Understand the business model underlying the application as well as the client's marketing plans and target audience for the application.

2. Determine if the application collects data from users of the application.

3. Determine if such data collection from users triggers applicability of a privacy law or law(s).

4. Determine if the user of the application is provided with adequate notice and the ability to consent to the collection and use of such information.

It is suggested that lawyers consider advising mobile application company clients as follows:

1. Compliance with relevant and applicable privacy law is highly recommended otherwise clients run the risk of potential criminal and civil penalties that may be fatal to their business.

2. Meaningful and straightforward notice and disclosure of information collection practices and use of such information are provided to users of the application.

3. Straightforward mechanisms be considered and employed to allow the user of the application to "opt-out" of or "opt in" to such information collection practices.

4. Whatever is stated in the notice, authorization, or privacy policy is actually practiced by the app maker (or whoever is collecting data and handling or transferring same and that the identity of such data collector or handler is disclosed).(xxii)

i Wall Street Journal, April 5, 2011, at Bl, first column.
ii Wall Street Journal, April 5, 2011, at Bl, third column.
iii Wall Street Journal, April 5, 2011, at Bl, third column.
iv Wall Street Journal, April 5, 2011, at B3, first column.
v As with most laws, applicability depends on the context or issue arising from the specific facts and circumstances. In Pandoras case, a subpoena issued to determine whether their user information gathering practices would trigger criminal liability under the Computer Fraud and Abuse Act. For a partial list of laws having provisions related to data privacy, please see http://www.bbbonline.org/understandingprivacy/library/fed_stateprivlaws.pdf.  See also California Office of Privacy Protection web page at http://www.privacyprotection.ca.gov/privacy_laws.htm. See also the Federal Trade Commission's Privacy and Security page at http://business.ftc.gov/privacy-and-security. For an Online Guide to Privacy Resources, see http://epic.org/privacy/privacy_resources_faq.html.
vi Wall Street Journal, April 5, 2011, at B1. See generally, the Computer Fraud and Abuse Act of 1996 (as of Feb. 1, 2010). See Children's Online Privacy Protection Act of 1998 (COPPA) as how data collection practices from children (minors younger than 13 years of age) are regulated at the federal level. vii The top three categories of mobile applications used in the past 30 days are games, music and social networking. See http://blog.nielsen.com/nielsenwire/online_mobile/the-state-of-mobile-apps (dated June 1, 2010). These three categories were in the top 5 as of September 9, 2010. See http://blog.nielsen.com/nielsenwire/online_mobile/games-dominate-americas-growing-appetite-for-mobile-apps/.
viii Gartner, Inc. (NYSE: IT) is the world's leading information technology research and advisory company.
ix http://mobithinking.com/stats-corner/global-mobile-statistics-2011-all-quality-mobile-marketing-research-mobile-web-stats-su#mobile-app-stores.
x See http://www.scribd.com/doc/45969897/Complaint-Freeman-v-Apple-final. The cases are identified as: In re: Freeman et al v. Apple Inc et al, No. 5:10-cv-05881-HRL and In re: Lalo v. Apple Inc et al, No. 5:10-cv-05878-PSG.
xi http://en.wikipedia.org/wiki/Computer_Fraud_and_Abuse_Act.
xii Wall Street Journal, April 5, 2011, at B3, first column.
xiii See 18 U.S.C. §1030 (c)(1)-(4), found at www.law.cornell.edu/uscode/18/1030.html.
xiv 18 U.S.C. §1030(a)(2)(C); and 18 U.S.C. §1030(b).
xv 18 U.S.C. §1030(c)(2)(B)(i).
xvi See 18 U.S.C. §1030(e)(1).
xvii See 18 U.S.C. §1030(e)(l).
xviii See 18 U.S.C. §1030(e)(1).
xix See 18 U.S.C. §1030(e)(6).
xx See 18 U.S.C. §1030(i).
xxi See 18 U.S.C. §1030(j).
xxii On March 30, 2011, the Federal Trade Commission (FTC) announced a settlement with Google relating to its social network "Buzz" under which Google agreed to implement a comprehensive privacy program to protect the privacy of consumer data collected as well as independent privacy audits for the next 20 years. One of the issues related to the FTC's charge that Google violated its stated privacy policy when it used information users provided for Gmail for another purpose, namely, for social networking, without obtaining consumers' permission in advance. The FTC considered this and other acts a "deceptive" tactic.

Call for Articles, Interesting Cases and Interviews!

Please send us your article ideas (or if already written, the article itself) for future issues of the newsletter. Send these to the editor at jeffmandell@yahoo.com

Relevant Cases

Intellectual Property
Posted: Thursday, June 9, 2011
Patent Act requires an invalidity defense to be proved by clear and convincing evidence.
Microsoft Corp. v. i4i Limited Partnership
filed June 9, 2011
Cite as 10-290
Full text click here

Intellectual Property
Posted: Tuesday, May 31, 2011
Induced infringement under 35 U.S.C. Sec. 271(b) requires knowledge that the induced acts constitute patent infringement. Deliberate indifference to a known risk that a patent exists does not satisfy the knowledge required by Sec. 271(b).
Global-Tech Appliances, Inc. v. SEB S.A.
filed May 31, 2011
Cite as 10-6
Full text click here

Intellectual Property
Posted: Wednesday, May 4, 2011
Copyright law does not preempt an implied contractual claim to compensation for use of an idea embodied in a copyrighted script submitted to a producer for consideration.
Montz v. Pilgrim Films & Television Inc.
filed May 4, 2011
Cite as 08-56954
Full text click here

Relevant Patent Cases of Note:
In Therasense, Inc. v. Becton, Dickinson and Co., the Federal Circuit affirmed the district court's judgment of obviousness, non-infringement, and anticipation, and vacated and remanded the district court's finding of inequitable conduct and unenforceability

The patent at issue involves disposable blood glucose test strips for diabetes management. Abbott submitted a declaration to the U.S. Patent and Trademark Office (the "PTO") to distinguish prior art references during prosecution. Several years earlier, Abbott had argued a different position regarding the same reference in front of the European Patent Office (the "EPO"). At trial, the district court held the patent unenforceable for inequitable conduct because Abbott did not disclose the EPO briefs to the to the PTO.

In a 6–1–4 decision, an en banc Federal Circuit addressed the "plague" of inequitable conduct assertions by raising the standard for the materiality prong. The Federal Circuit stated: To prevail on the defense of inequitable conduct, the accused infringer must prove that the applicant misrepresented or omitted material information with the specific intent to deceive the PTO. The accused infringer must prove both elements—intent and materiality—by clear and convincing evidence. If the accused infringer meets its burden, then the district court must weigh the equities to determine whether the applicant's conduct before the PTO warrants rendering the entire patent unenforceable.

Intent:
For the element of intent, the accused infringer must prove that the patentee acted with specific intent to deceive the PTO. A finding that the misrepresentation or omission amounts to gross negligence or negligence under a "should have known" standard does not satisfy this intent requirement. Regarding failure to submit prior art, the accused infringer must prove by clear and convincing evidence that the applicant knew of the reference, knew that it was material, and made a deliberate decision to withhold it. A district court should not use a "sliding scale," where a weak showing of intent may be found sufficient based on a strong showing of materiality, and vice versa. Because direct evidence of deceptive intent is rare, a court may infer intent from indirect and circumstantial evidence. However, a district court may not infer intent solely from materiality. Proving that the applicant knew of a reference, should have known of its materiality, and decided not to submit it to the PTO does not prove specific intent to deceive. When circumstantial evidence is used, intent to deceive must be the "the single most reasonable inference," and where multiple reasonable inferences may be drawn, intent to deceive cannot be found.

Materiality:
For the element of materiality, the Federal Circuit now demands evidence of "but-for materiality." In assessing the materiality of a withheld reference, "the court must determine whether the PTO would have allowed the claim if it had been aware of the undisclosed reference." In making this patentability determination, "the court should apply the preponderance of the evidence standard and give claims their broadest reasonable construction." Thus, it is possible that a claim may be found valid over a reference under the clear and convincing evidence standard at trial, while the same reference is deemed "material" for inequitable conduct purposes. The court expressly rejects adoption of the Rule 56 definition of materiality.

Materiality Exception:
As a major exception, the court here held that in cases involving affirmative egregious misconduct (e.g., such as submitting a false affidavit), but-for materiality need not be proven. This exception "gives the test sufficient flexibility to capture extraordinary circumstances."

Unenforceability:
Because inequitable conduct renders an entire patent (or even a patent family) unenforceable, as a general rule, this doctrine should only be applied in instances where the patentee's misconduct resulted in the unfair benefit of receiving an unwarranted claim. Moreover, enforcement of an otherwise valid patent does not result in an unfair benefit merely because of misconduct that was immaterial to the patent's issuance.

Dissent:
The dissent agreed with the majority's opinion with respect to intent, but would have adopted the Rule 56 definition of materiality.

In Global-Tech Appliances, Inc. v. SEB S.A., the Supreme Court affirmed the Federal Circuit's judgment of induced infringement, but held that induced infringement requires knowledge that the induced acts constitute patent infringement, and that knowledge can be met by a showing of willful blindness.

SEB invented and obtained a U.S. patent for a cool-touch deep fryer. Pentalpha, a subsidiary of Global-Tech, purchased an SEB fryer in Hong Kong and copied its design to develop a competitive deep fryer. Thereafter, Pentalpha hired an attorney to conduct a right-to-use study, but refrained from telling the attorney that the design was copied from SEB. The attorney failed to locate the SEB patent, and issued an opinion letter of non-infringement with respect to the patents he had found. Pentalpha began selling the deep fryers to Sunbeam, which resold them in the United States.

SEB sued Pentalpha in the Southern District of New York arguing that Pentalpha violated 35 USC § 271(b) by actively inducing Sunbeam to sell Pentalpha's deep fryers in violation of SEB's patent rights. Following a five-day trial, the district court held that Pentalpha induced infringement of SEB's patents. The Federal Circuit affirmed the District Court's decision on appeal, holding in an en banc decision that induced infringement under § 271(b) requires a plaintiff to show that the alleged infringer knew or should have known that his actions would induce actual infringement, and that this showing was met by Pentalpha's deliberate disregard of a known risk that SEB had a protective patent.

On appeal to the Supreme Court, the Supreme Court affirmed the Federal Circuit's judgment of infringement, but held that deliberate indifference to a known risk that a patent existed is not the appropriate standard under § 271(b). Rather, the Supreme Court held that induced infringement under § 271(b) requires knowledge that the induced acts constitute patent infringement. Additionally, the eight justice majority opinion held that knowledge can be found under the doctrine of willful blindness, which requires that a defendant subjectively believe that there is a high probability that a fact exists and that the defendant take deliberate actions to avoid learning of that fact. The majority opinion determined that the evidence of willful blindness was more than sufficient based on Pentalpha's decision to copy an overseas model of SEB's fryer, Pentalpha's decision to not inform the attorney conducting the right-to-use study that the fryer was copied, and Pentalpha's decision to copy all but the cosmetic features of SEB's fryer.

Note: Federal Circuit case summaries provided by Irfan Lateef of Knobbe Martens.

www.kmob.com


Los Angeles County Bar Association
2010-11 Entertainment and Intellectual Property Section
Officers and Executive Committee Members

SECTION OFFICERS
Chair
Jeff Kichaven

Immediate Past-Chair
Allison S. Brehm

First Vice Chair
Dominique R. Shelton

Second Vice Chair/Treasurer
F. Jay Dougherty

Secretary
Shahrokh Sheik

Meeting and Event Professional
Fatima Jones


MEMBERS

Nabil L. Abu-Assal Marc E. Mayer
David Aronoff Elena Muravina
Susan Cleary Louise Nemschoff
Donald G. Davis "Don" Joseph Mel Paunovich
Marina Depietri Martin Perlberger
Robert W. Dickerson Wendy J. Ray
Judith Cohen Dornstein Douglas P. Roy
Gordon H. Einstein Michele P. Schultz
Corey Field Navid Soleymani
Tanya L. Forsheit Mark J. Sonnenklar
Jeff R. Glassman Larry Steinberg
Fredric H. Goldstein Jonathan E. Stern
Nicole L. Harris Johnson Kristin R. Stohner Dion
Benjamin W. Hattenbach Paul D. Supnik
Jennifer B. Hodulik Joanne J. Terrell
Tania Marie Hoff Diana M. Torres
Patricia A. Horton Larry E. Verbit
Jonathan Hyman Kevin Lester Vick
Enoch H. Liang Danika Britt Vittitoe
James M. Lichtman Jennifer L. Webber
Denise R. Madigan Karen Vogel Weil
Ray Michael Maiello Donna C. Wells
Jeffrey Mandell Rami S. Yanni