Letter from AmeriKat: It's cold outside, but the US IP courts are warming up!

Now that the cold north winds have begun to truly blow winter onto London's stone streets, one can easily be forgiven for retreating into the warmth of their homes until spring. Having spent a blustery evening walking along the South Bank on Wednesday, a frigid journey from Farringdon to Holborn on Thursday, and a freezing walk in Marylebone on Saturday, the AmeriKat herself is still nursing frozen paw pads and refuses to go outside once more. However, the AmeriKat was reminded last week that during the winter we all (people and Kats alike) become more insular and that instead of burrowing up next to her warm radiator, she should instead be spending the dark winter days volunteering at the Battersea Dogs and Cats Home - who have just celebrated their 150th Anniversary. The AmeriKat will be donating some of her reserved Christmas money and time to the shelter this year as part of their Kitty Kabin drive, and she suggests that all you cat and Kat lovers alike do the same for this most deserved charity. To do so, please click here.

Oracle wins $1.3 billion in largest copyright infringement jury award

Someone else that may have spare funds ready for some charitable donation is Oracle, who last week was awarded $1.3 billion by a California jury in the copyright infringement case brought by Oracle against SAP in 2007. Oracle is the second largest supplier of business-related software after SAP. SAP had not contested liability, so all was remaining was for the jury award on damages, which is reported to be the highest copyright infringement award ever in the U.S. According to a report this afternoon, SAP plans to file a post-trial motion in an attempt to reduce the award.

Oracle, a California-based company who specialize in developing hardware and software systems, sued SAP, a German based software company, after learning that the US based subsidiary of SAP, TomorrowNow had allegedly made hundreds of thousands of illegal downloads and copies of Oracle's software to avoid paying for Oracle's licence fees. According to the complaint, TomorrowNow had been downloading and using Oracle's software to provide technical support to customers of Oracle's recently acquired companies in order to lure them to buy software from SAP, rather than from Oracle. An attorney for Oracle, Geoffrey Howard, said that the scale of TomorrowNow's infringement was "unprecedented." TomorrowNow was acquired by SAP in 2004 for $10 million and, according to Oracle's lawyers, knew of the unauthorized acquisition of Oracle's software by TomorrowNow prior and subsequent to SAP's acquisition and for this reason kept TomorrowNow as a separate operating company in order to provide SAP a shield from liability.

According to the jury's foreman, the scope of the jury's deliberation on the quantification of the award was limited to quantifying the notional reasonable licence fee that would have been agreed between SAP and Oracle, rather than loss profits of potential sales by Oracle. Orcale's expert witness had suggested $1.65 billion, but the jury reduced this figure by $350 million - this is still $1.26 billion more than SAP's suggestion of Oracle's actual loss. The difference between the two side's suggested figures of course being that Oracle was arguing for a reasonable licence fee, whereas SAP was arguing for actual loss of profit flowing from Oracle's loss of customers which they claim to have been only about 86.

Regardless of how the jury elects to assess damages, jury awards hold another benefit (if you are a claimant), or problem (if you are a defendant), in that the method and means of calculation used to arrive at these figures will not be forthcoming. The problem with jury awards has previously been illustrated in Microsoft's saga in the i4i litigation (see previous AmeriKat posts here). But according to the foreman the jury came to a figure that they thought

"... was a fair number."

Safra Catz, Oracle's President, said in an e-mailed statement:

"For more than three years, SAP stole thousands of copies of Oracle software and then resold that software and related services to Oracle's own costumers. Right before the trial begun, SAP admitted to its guilt and liability; then the trial made it clear that SAP's most senior executives were aware of the illegal activity from the very beginning."

Unfortunately, the 11-day trial did not see the appearance of Leo Apotheker's video testimony. Apotheker, SAP's former CEO and now the CEO of Hewlett-Packard CEO, was cited by the outspoken Oracle CEO, Larry Ellison, as having overseen TomorrowNow's illegal Oracle downloads. At trial, however, Oracle decided not to show Apotheker's statement and had said it was unable to subpoena him to appear. According to Bloomberg Business Week, HP spokesperson's Mylene Mangalindan has said that the subpoena was

"no more than an effort to harass him and interfere with his duties and responsibilities as HP's CEO."

Bill Wohl, a spokesperson for SAP, said that SAP would pursue all possible options, including a possibility for an appeal. He stated that:

"This will unfortunately be a prolonged process and we continue to hope that the matter can be resolved appropriately without more years of litigation."

The case, besides holding interest due to the scale of the award, has shaken up the software industry. The manner in which the field of third party technical support in the software industry operates will most likely be subject to some serious self-reflection in the wake of the award. Further, the litigation has revealed some bad blood between all three major competitors - SAP, Oracle, and HP - and if the jury award is appealed, it is anyone's guess what other battles will be seeping out of Silicon Valley.

Sarah Palin and Gawker settle over leaked book excerpts

Gawker has settled with HarperCollins last week following Judge Thomas Grisea's order that the news and blog-orientated website Gawker remove leaked pages of Sarah Palin's new book, America By Heart, from it's website. The order came after a tweet from Palin's Twitter account stating

"The publishing world is LEAKING out-of-context excerpts of my book w/out my permission? Isn't that illegal?"

Had Gawker fought the order, they would have had to resort to the doctrine of fair use. However, many legal commentators have stated that Gawker had nowhere to run following a 1985 US Supreme Court decision of Harper & Row Publishers v Nation Enterprises which held that The Nation's unauthorized publication of a 400 word excerpt from an over 600 page autobiography of former President Ford did not qualify as fair use. Although the now removed Gawker post had their own commentary interspersed between Palin's work, which could have arguably benefited from the fair use defence due to its transformative nature, it is the fact that the leak came just days before the book's publication that would have been the nail in any defence. Like in Nation Enterprises and in the recent Salinger case (see previous AmeriKat posts here), US courts take a dim view of publication of literary excerpts prior to actual publication due to the US court's recognition of the potential economic impact that such leaks may have on the initial sales of a book - copyright law, if it has anything in the US, has an entrenchment in economic philosophy after all.

According to a statement by Palin's publisher, the Murdoch-owned HarperCollins, the two parties have come to a settlement whereby Gawker will remove and will not post any excerpts from the book online. According to The New York Times, the rival to Murdoch-owned Wall Street Journal (see AmeriKat posts here), the editor in chief of Gawker, Remy Stern, stated in an email that

"HarperCollins' decision to file suit against us and seek a temporary restraining order generated a good deal of press for Ms. Palin's book in advance of its publication. Now that the book is out and destined to appear on the best-seller list, we're pleased that HarperCollins proposed settling this case as is, thus avoiding lengthy litigation for both sides."

The AmeriKat agrees with Stern. Had Gawker not been subject to the injunction, she would not have even known Palin was coming out with another book. The AmeriKat is annoyed that Gawker allowed itself to be used as a promotional vehicle to move books off shelves due to failing to comply with copyright law. Gawker may however not see it that way given that their profile has undoubtedly been raised by this matter and can continue to promote itself as a provider of unedited and unadulterated content to its readers, even if on the wrong side of copyright law in this case.

This case is a lesson to those tempted to publish unpublished excerpts of biographies, especially political ones - report on its content, don't just publish its content.

Microsoft win in China over pirated software

If you are like the AmeriKat and are increasingly monitoring IP enforcement in China, last week's news of Microsoft winning a copyright infringement lawsuit against a Chinese internet cafe chain in China may come as a welcome surprise. According to the China Briefing website, Microsoft was reported to have been seeking a reported 1.5 million yuan or $225,000 (although this number varies drastically between different reports) for use of unauthorized software, however the actual award was not disclosed. For more information please see these reports here and here, or indeed if anyone has any better information on this case please let the IPKat know.