On May 8, 2008, the U.S. House of Representatives passed H.R. 4279, known as the Prioritizing Resources and Organization for Intellectual Property Act  — “PRO IP” for short.  The bill would revise various enforcement-related revisions to U.S. copyright and trademark laws.  Key sections of the bill include:

• a revision to the Copyright Act protecting the validity of copyright registrations that have a harmless error — specifically, the revision will excuse any inaccuracy in a copyright certificate of registration so long as the inaccuracy was not knowingly put into the application and correction of the inaccuracy would not result in refusal of registration;
• sections increasing statutory damages in counterfeiting actions and allowing treble damages in trademark infringement actions involving counterfeit goods if the violation was intentional;
• an expansion of Section 602 of the Copyright Act (which prohibits importation of infringing copies) to also cover exportation;
• a section increasing the government’s authority to sieze property used in connection with copyright infringement; and
• the creation of an IP Enforcement Division in the U.S. Department of Justice, the appointment of an IP adviser to the President, and the appointment of IP enforcement officers in foreign countries.

A companion bill is expected to be introduced into the U.S. Senate soon. 

The Washington Post reported yesterday that the National Football League reversed a long-standing copyright enforcement policy and is permitting religious organizations to host live showings of the Super Bowl on large-screen televisions so long as the group charges no fee and the event occurs on a premises normally used by the religious organization.

Despite the brewing equipment on the altar, I don’t suppose that one of my favorite local hangouts - the Church Brew Works - will qualify for the new policy.    

Are we approaching a yet another new era for the distribution of copyrightable works to the mass market?   Radiohead, Prince, Peter Gabriel, and Paste magazine may be at the forefront of a new business model for the distribution of creative works.  Read the rest of this entry »

In June 2007 the Free Software Foundation released version 3 of the GNU General Public License relating to open source software code.  Under version 3, distributors of open source software have the option to continue distribution under GPLv2 or changing distribution to GPLv3. 

When IP due diligence reveals that a software product is licensed using the GNU General Public License, the license version (GPLv2 or GPLv3) can be important.  For example, GPLv3 does not permit licensed open source code to be used as a “technological measure” for controlling access to a copyrighted work.  Thus, if the software product at issue includes technical features such as digital rights management (DRM) to prevent copying, GPLv3 prohibits the use of licensed open source code to achiee the DRM or similar features. 

In addition, GPLv3 expressly requires a user of open source code to license any relevant patents to others who also want to use the open source code.  Thus, if a software product is covered by a patent but also contains open source code, the resulting product’s code must not only be made available to others, but any patents covering the product also may be automatically licensed to others.  Of course, this can significantly reduce the value of the patent.

Issues such as these may require that IP due diligence include an inquiry into which version of the GPL covers open source code.  The complete text of GPLv3 is available from the GNU Project.

Who says the world of intellectual property can’t be fun?  For a quick summer read, check out Tim English’s recent book Sounds Like Teen Spirit:  Stolen Melodies, Ripped-Off Riffs, and the Secret History of Rock and Roll.  You may have heard of the similarities between (and lawsuits relating to) songs by George Harrison and the Chiffons; The Verve and the Rolling Stones; or even the current action between Avril Lavigne and the Rubinoos about Lavigne’s latest hit single “Girlfriend”.  However, did you know where that famous opening guitar solo from Stairway to Heaven can find its origin?   Do the similarities show that copying occurred, or was it just a subliminal suggestion in the songwriter’s mind?

Bring your MP3 player and the book on your summer vacation and compare the songs yourself.  You can also check out a few sound bite comparisons and an interesting interview with Tim English in the July 19 episode of the Coverville podcast.  (Thanks, Brian for the tip about the book!)

A common shortcut in due diligence is to give commercially-available, off-the-shelf (COTS) software a cursory review, since such licenses can easily be purchased if needed after the transaction is complete.  However, if a due diligence target is out of compliance with a COTS software license, the cost to correct the noncompliance can be substantial — especially for a small company or a company that does not ensure that its employees understand the risk of noncompliance. 

 The U.S. Court of Appeals for the Sixth Circuit recently issued a reminder of this cost in Thoroughbred Software International v. Dice Corp. (No. 06-2080, June 14, 2007), when it considered a software license that permitted the licensee to make one backup copy of each licensed product.  However, a software audit found the licensee made a 38 extra copies of one licensed product,and 31 extra copies of another product.  Although most of the copies were merely residing on computers that were not being used, the court found the copies to violate the terms of the license and awarded the software company nearly $184,000 in damages.  The Sixth Circuit also vacated the lower court’s denial of attorney’s fees and remanded the case to determine whether the infringing licensee should also pay the software company’s attorneys’ fees.

 A few well-placed inquiries during due diligence can help to avoid headaches down the road, since in most cases software noncompliance can be corrected before a transaction is complete.