Addressing legal issues with the latest technological developments and social media trends.
Posted

by

In denying a motion for summary judgment of invalidity under Section 101, the court stated: “An inability to articulate an abstract idea to which claims are directed may be a clue that those claims satisfy Section 101.” The patent claims at issue related to management of online poker. Defendant challenged the validity based on lack of patentable subject matter under Section 101 in light of the recent Alice decision,
alleging the claims related to the abstract idea of a “customer loyalty program direct to poker, ” (i.e. a player rewards system within a poker room), without adding significantly more. The court refused to buy this argument because the independent claims did not even include a customer loyalty or compensation system.

It is always easy to say that a claim relates to an abstract idea, but that is not the proper legal test. The focused is on what is actually claimed. As stated in Alice, a claim that recites an abstract idea must include “additional features” to ensure “that the [claim] is more than a drafting effort designed to monopolize the [abstract idea].” To the extent the claims do recite an abstract the question is whether there are other ways to use the abstract idea.

Despite the furor over the Alice
decision, properly drafted software and game patents are still patent eligible.

Posted

by

Too many companies/lawyers treat website Terms of Service (TOS) as boilerplate agreements that no one reads. Many companies simply put a link at the bottom of the homepage. This approach continues to prove ineffective, as courts are more frequently refusing to enforce TOS absent properly drafted terms and a requirement that the user read and/or affirmatively accept the terms. In a recent 9th
Circuit Appeal, the court ruled against Barnes&Noble stating that “where the link to a website’s terms of use is buried at the bottom of the page or tucked away in obscure corners of the website where users are unlikely to see it, courts have refused to enforce the browse-wrap agreement.”

The Court further held: “where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on–without more–is insufficient…”

The result in this case was that the court decided there was no binding agreement,
and therefore B&N could not enforce the arbitration clause contained in the TOS. However, in other cases, even more significant problems can arise. Similar problems can cause modifications to a TOS to be ineffective.

The bottom line is that if properly drafted and implemented, a TOS can provide significant protection for companies and can minimize legal liability to customers. If not, courts will likely not enforce those terms.

If you have not recently reviewed your TOS, you should have a lawyer do so soon.

Posted

by

In comments on October 14, 2014, Ben Lawsky commented on changes to the proposed bitlicense regulations. The main points he made were these:

  • Regarding who will be required to obtain a bitlicense, he said the focus will be financial intermediaries, not software developers or individual users.
  • To the extent that company may need both money transmitter and virtual currency licenses, for example – which is possible – the process will be streamlined to avoid duplication.
  • Regarding concerns that banks were exempted, he said that is untrue. Banks cannot start providing virtual currency services without prior approval from DFS, and they will have to comply with any requirements that are otherwise imposed on virtual currency businesses.
  • Mining, per se, will not be regulated. To the extent a miner engages in other virtual currency services, however – for example, hosting wallets or exchanging virtual currency – a license may be required for those activities.
  • Consideration is being given to how to avoid excessive regulatory costs for startups – but no specific proposal was provided. He said the goal is not to stifle technological innovation, but if a software company is also taking on the responsibility of actually safeguarding customer money, it is a much more difficult calculation.
Posted

by

On August 1, 2014, the Food and Drug Administration (FDA) released draft guidance that would exempt from premarket 510(k) review many low-risk medical devices–including certain mobile applications that can convert a cell phone into a medical device, such as a thermometer or a stethoscope. Although the guidance is not yet legally enforceable, the FDA also announced its intention not to enforce compliance with premarket review requirements for these devices and noted that it did not expect manufacturers to submit 510(k)s for these devices prior to adoption of a final rule or order. The FDA’s recognition that these devices are sufficiently well understood and do not present risks that require premarket review to ensure their safety and effectiveness–and its corollary decision to exercise enforcement discretion as to these devices–eases the regulatory burden on medical application developers and expands opportunities for continued development and dissemination of important mobile tools for improving patient care and physician practice.

For more information, check out the Client Alert.

Posted

by

On Friday, Michael Dell, CEO of Austin-based Dell Inc., announced on twitter that Dell.com is now accepting Bitcoin as a direct payment option for consumers and small businesses in the U.S.  Other major companies, such as Overstock and Expedia, began accepting Bitcoin earlier this year and have reported favorable results, including that a majority of Bitcoin purchases were made by brand new customers.  To offer Bitcoin as a payment option,
Dell partnered with Coinbase,
a U.S.-based Bitcoin exchange and payment processor.  Dell’s terms and conditions highlight one of Bitcoin’s unique characteristics,
i.e., that once you initiate a Bitcoin transaction, you cannot change or cancel it.  Dell does, however, offer a limited refund process that requires a Coinbase account or remittance of a check in U.S. dollars, depending on the circumstances.

Austin has become a hub of Bitcoin activity.  Several emerging Bitcoin-focused companies, such as CoinTerra
and Cloudhashing, are located in Austin, and, in February, Robocoin installed the first U.S.-based Bitcoin ATM in a popular bar in downtown Austin.

Posted

by

The Federal Communications Commission’s Accessibility and Innovation Initiative will host an “Accessing Social Media” event on Thursday, July 17, 2014 from 9 a.m. to 4 p.m. in the Commission Meeting Room in its headquarters located at 445 12th Street, S.W., Washington, D.C.  The event will be webcast without open captioning.   The event is open to the public, however, RSVPing for in-person attendance is encouraged. 

The FCC’s stated purpose of the event is “to facilitate a collaborative, cross-sector exchange of information about making social media tools and content accessible to people with disabilities, including information about authoring tools, client apps and best practices.”  The event will include panels of industry, consumer and government representatives and feature technology demonstrations in an exhibit area.

Posted

by and

Today, we, along with our colleague Michael Heuga, published our client advisory titled New Canadian Anti-Spam Rules to Take Effect July 1, 2014.
If your business uses “commercial electronic messages” to market to your customers and prospective customers in Canada, please be aware of Canada’s new anti-spam rules, which require, among other things, the sender of the electronic message to obtain consent from the recipient before sending the message and the message itself to identify the sender and provide instructions enabling the recipient of the message to withdraw consent to receive such messages.

Additional Source:  Canada’s Anti-Spam Law

Posted

by

Bitcoin mining firm GHash is reportedly
consistently attaining over 51% of all of the hashing power of all Bitcoin miners.  As a decentralized currency, Bitcoin depends on an open ledger called the “block chain” to track every transaction using the Bitcoin protocol.  The integrity of the block chain is generally maintained because many different entities are competing to summarize the entire block chain as quickly as possible.  When many entities agree on the state of the block chain, that agreed upon state becomes for all intents and purposes, fact.
When a miner is able to consistently control 51% of the “votes” in the mining pool, it can theoretically control the state of the block chain.
GHash has released a press release stating that it will not attempt to use its hashing power to manipulate the market, but the Bitcoin community remains cautious of how GHash will wield its market share in the coming weeks.

For advice on how this development may impact you, contact us.

Posted

by

As reported in our earlier post,
the U.S. Government has begun its first ever auction of Bitcoins.  The Bitcoins to be auctioned were seized in connection with the shutdown of the Silk Road – the “dark net” site that served as a marketplace for illegal goods.  The U.S. Marshals Service has announced that 29,656.51306529 bitcoins will be auctioned in this initial round.  The reported
value of the Bitcoins to be auctioned, at the time of the announcement, is approximately $18 million U.S. Dollars.

Posted

by

The California Attorney General recently published recommendations
for developing meaningful privacy policies that comply with the California Online Privacy Protection Act of 2003 (CalOPPA), including recommendations for complying with “Do Not Track” disclosure requirements.  According to the Attorney General, a meaningful privacy policy is one that addresses significant data collection and use practices, uses plain language, and is presented in a readable format.  While the recommendations are not regulations, mandates,
or legal opinions, they do identify certain best practices for privacy policies that satisfy the minimum legal requirements.