Los Angeles Business Litigation Blog : Los Angeles Business Litigation Lawyer & Attorney : Daniel Reisman Law Firm : California Civil Litigation & Contracts

Microsoft filed a complaint against TomTom yesterday alleging eight counts of patent infringement. TomTom makes in-car navigation devices. The software powering the devices is built upon Linux.

Given that this is the first instance of Microsoft directly asserting that an implementation of the Linux kernel infringes upon Microsoft's intellectual property, the geeks with the long beards, err, open-source software advocates, are concerned. If successful, Microsoft may create a very slippery slope for Linux as well as the myriad of devices it powers.

According to Ars Technica, "[t]he lawsuit, which was reported [yesterday] at Todd Bishop's Microsoft blog, is thought to be the first time that Microsoft has directly targeted Linux with patent litigation." And, in an interview with Todd Bishop, posted today, Horacio Gutierrez, Microsoft's corporate vice president and deputy general counsel for intellectual property, confirmed it.

Gutierrez states that "three of the eight patents in this dispute read on the Linux kernel as implemented by TomTom. The other five relate to car navigation proprietary software used by TomTom." When questioned as to what he meant by "reads on the linux kernel," Gutierrez responded that "the patents cover the implementation of the Linux kernel done by TomTom in their products." Id.

"Reads on" is actually a legal term of art. In very general terms, determination of patent infringement has two steps. First, the patent claim at issue must be construed to determine its scope and meaning. Second, one determines if the accused device or process infringes the properly construed claim. Interpreting the meaning and scope of a claim is generally a matter of law. The question of infringement, specifically literal infringement is generally a question of fact, and requires the factfinder to decide whether the patent claim, as construed, reads on the accused object or process.

As Ars Technica explains, at least two of the patents at issue involve the FAT32 filesystem. FAT is an acronym that stands for File Allocation Table. The FAT filesystem was first developed around thirty years ago for use with MS-DOS and later Microsoft Windows. Although FAT has largely been discarded in favor of the NTFS filesystem, removable devices such as Windows-formatted iPods are still formatted using FAT32. FAT32 is also one of the only, if not the only filesystem with native read/write support in most of the major computing platforms, including Microsoft Windows, Linux, and Mac OS X.

Last year, Microsoft asserted that Linux infringes on over 200 of its patents. From what I can tell, most businesses that rely on Linux either entered into licensing agreements with Microsoft to protect themselves from potential liability (such as TomTom's competitor Garmin), or just entirely dismissed the assertion, assuming it was just FUD aimed at decreasing Linux's share of the server market.

So, what's the point of this litigation? Why attack Linux? Does it actually pose a threat to Microsoft's dominance in most things computer related?

Microsoft should be able to protect its intellectual property; however, FAT32 is essentially outdated technology, so why waste the money suing over it?

According to a blog post on CNET, Microsoft is adding broader support for FAT32 formatted hard drives to Windows 7. Could the push for better backwards compatibility with FAT32 in Windows 7 have anything to do with the case against TomTom? I suppose it's possible (though somewhat unlikely). And, even if it is the driving motivation, it still doesn't necessarily mean that Microsoft has finally decided to wipe Linux from the face of the planet—it may just mean that Microsoft wants to get paid for what it owns. In fact, Gutierrez was fairly adamant in his assertion that the suit against TomTom is not an attack on open-source software, but rather the result of TomTom's absolute unwillingness to come to an agreement regarding licensing of Microsoft's intellectual property—including the five patent claims relating to purely proprietary technology. See Tom Bishop's Blog.

(You can find the complaint here (warning: pdf)).

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Last week, on February 20, 2009, the Ninth Circuit refused to extend the definition of obscenity to encompass portrayals of violence under the First Amendment, and thereby held a California law prohibiting the sale or rental of violent video games to minors an unconstitutional content-based restriction on freedom of expression. See Video Software Dealers Association v. Schwarzenegger, No. 07-16620, 2009 WL 415582 (9th Cir. Feb. 20, 2009).

In 2005, California passed a law prohibiting sales and rentals of violent video games to minors. If the law had gone into effect, the penalty for a violation would have been a $1000 fine. And, all video games, determined to be violent by the State, would have to have been labeled ‘18’ on the front of the packaging.

Thankfully, two industry trade groups, the Video Dealers Association (‘VDSA’), and the Entertainment Software Association (‘ESA’), quickly filed suit.

The district court granted a preliminary injunction prohibiting enforcement of the law before it went into effect, and later granted the plaintiffs' motion for summary motion judgment permanently enjoining the enforcement of the law on constitutional grounds.

The Ninth Circuit affirmed the district court's rulings in Video Software Dealers Association v. Schwarzenegger. The opinion, drafted by Judge Callahan, holds that obscenity laws cannot be applied to violent content under the First Amendment.

I imagine the ruling comes as more of a relief than a surprise to the ESA, who defeated a similar law in Illinois. Nevertheless, it is a major victory for the video game industry, retailers, and for a variety related businesses in California.

Video games are a multi-billion dollar industry, and, according to the ESA, “California is the largest employer of computer and video game personnel in the nation, accounting for 40 percent of the total industry employment nationwide.” Although the video game industry is probably not as “recession proof” as it appeared to be a month or two ago, it is still not being hit as hard as other other sectors of the economy. See e.g., The Los Angeles Times (detailing Electronic Arts’ projections for 2009).

Admittedly, this is just speculation on my part, but laws prohibiting the sales and/or rentals of violent video games, and levying fines on those that violate them, would hurt not only the video game industry, but a number of related industries as well, and could drive an already-shrinking economy further into recession. I know first hand that students in film school, music school, and recording school are increasingly looking toward the video game industry for employment as the music industry is in shambles and post-production jobs in the film industry are difficult to get.

I am not suggesting that, as matter of policy, business interests and the economy should be put ahead of protecting children from real risks of harm. And, I think it is fairly clear that not all video games are suitable for young children. However, a quantifiable risk of actual harm to a child's psychological and neurological well-being from playing ‘violent’ video games is anything but proven.

Moreover, I concede that beating up hookers in Grand Theft Auto completely lacks educational value, but other games, despite being gory and violent, may not. As the Ninth Circuit puts it,

Many of these games have extensive plot lines that involve or parallel historical events, mirror common fictional plots, or place the player in a position to evaluate and make moral choices. Id.

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In Roodenberg v. Pavestone Company, L.P., 171 Cal. App. 4th 185 (2009), the California Court of Appeal held that section 3287(a) of the California Civil Code is inapplicable when prejudgment interest is expressly provided for in a contract. Thus, no showing of certainty regarding the amount of prejudgment interest due is required on the part of the defendant.

The general rule with respect to allowance of interest, when there is no contract to pay interest, is that the law awards interest upon money from the time it becomes due and payable if such time is certain and the sum is certain or can be made certain by calculation. Id. at 191 (citing Schmidt v. Waterford Winery, 177 Cal. App. 2d 28, 34 (1960)) (emphasis in original).

In this case, the contract clearly stated that when the sum became due, the defendant had 30 days to pay it. If unpaid after 30 days, interest accrued at the rate of one and a half percent per month. Therefore, the general rule regarding certainty is inapplicable.

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There has been considerable press coverage regarding the general outrage inspired by Facebook’s changes to its terms of service since the original alarmist post appeared in The Consumerist. So, it was only a matter of time until someone threatened to initiate formal legal proceedings. And, according to The New York Times, approximately twenty-five consumer interest groups intended to do just that by filing a complaint with the Federal Trade Commission alleging unfair and deceptive trade practices today. As a result, Facebook has, at least temporarily, withdrawn the new terms of service in exchange for an agreement with the consumer groups to delay bringing a claim against it.

Of course, Facebook still intends to change its terms of service. And, from a practical perspective, I think it should. Facebook’s now-defunct-revised terms of service were probably a more accurate reflection of how Facebook users’ and ex-users’ content is currently used and how it will continue to be used in the future. In essence, I think there is probably a strong argument in favor of modifying the terms of service to state that Facebook users do in fact relinquish a fair amount of their rights with regard to the content they post on the site—if only to bring the legal effect of the terms of service into sync with the practical effect of posting content on Facebook. It will reduce Facebook’s exposure to liability, and, hopefully, it will encourage users to be cautious when posting valuable content on Facebook. As to how Facebook can accomplish such a change given the recent debacle as well as the questionable legality of unilaterally changing the terms of service for current users, that remains to be seen and is beyond the scope of this post.

Protecting the rights of users with regard to the content they post on Facebook—under almost any reasonable terms of service—will be difficult, time-consuming, and expensive (if possible at all). For example, I doubt that most Facebook users register the copyrights to the photos that they post on the site; however, copyright registration is a prerequisite to copyright litigation—and registration is not cheap.

Despite the possibility that from a purely theoretical standpoint, the user may retain most or even all of the legal rights to the content after posting it on Facebook, from a practical standpoint, once it is posted on Facebook, it is likely to stay on Facebook in one way or another for a long time. Therefore, I think that advice given to the readers in The Consumerist that states “[m]ake sure you never upload anything you don’t feel comfortable giving away forever, because it’s Facebook’s now” is sound regardless of which set of terms of service are currently in effect.

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The Daily Journal (subscription required) states that civil trials in California dropped by 28% during the fiscal year of 2006–07. According to the same article, the reason most often cited by lawyers, judges, and academics is the cost of litigation and trial.

I suppose rising litigation costs could account for a slow decline in the number of civil trials over the course of a decade, but I find it unlikely that such a steep drop in one fiscal year can be solely attributed to the cost of litigation and trial. Maybe it was just a strange year.

Also, I’m not sure how one can draw any conclusions looking at the number of civil trials in a vacuum.

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