Lawyer Behind Failing Sham To Protect Sketchy Patents Sends Bogus Copyright Cease & Desist To Blogger

from the a-bit-sensitive,-michael? dept

You may recall a story we had last fall on a really, really obnoxious and cynical scam to protect sketchy patents by "selling" the patents to Native American tribes. The details here are complex, and that original article has a longer explanation, but the very short version is that in 2010, Congress created a special appeals board to review patents to see whether they never should have been granted. This Patent and Trademark Appeals Board (PTAB) has actually been quite useful in getting rid of sketchy patents, which is why people with sketchy patents hate it, and are trying to get it declared unconstitutional by the Supreme Court.

But, while everyone waits on that some lawyers came up with a fairly devious plan to avoid PTAB review. It started when the PTAB agreed to dismiss some reviews of patents held by the University of Florida, after the University claimed that it had sovereign immunity as a state organization. The lawyers for the University of Florida, from the law firm of Shore Chan DePumpo based in Dallas, apparently sensed an opportunity. Realizing that a state-controlled organization could apparently avoid the entire PTAB process by claiming sovereign immunity, it realized that companies facing challenging PTAB reviews could potentially avoid doing so entirely by "selling" the patents to a "sovereign" organization, which would then license the exclusive rights back to the original patent holder. Effectively, the patent holder would pay a bit of money to some sort of sovereign operation, but would retain all of the rights as before, just structured as an exclusive license.

The big example of this from last fall was the pharmaceutical company Allergan, which seemed likely to lose some of its patents for the drug Restasis under PTAB review. So right before the PTAB was going to rule, the same lawyers engineered a "sale" of the patents to the St. Regis Mohawk Tribe. Allergan would pay the tribe $13.75 million basically for one purpose only: to magically exempt it from the PTAB process. As we noted at the time, this really does appear to be a sham sale for no other purpose than to avoid the PTAB.

The sham not only didn't work, it has backfired spectacularly. In February, the PTAB denied the tribe's motion, clearly recognizing what was going on:

Upon consideration of the record, and for the reasons discussed below, we determine the Tribe has not established that the doctrine of tribal sovereign immunity should be applied to these proceedings. Furthermore, we determine that these proceedings can continue even without the Tribe's participation in view of Allergan's retained ownership interests in the challenged patents. The Tribe's Motion is therefore denied.

Not only that, but the publicity of all of this woke up Congress, which introduced the PACED Act, which is directly designed to stop this kind of activity:

Senator Tom Cotton (R-Arkansas) and Senator Claire McCaskill (D-Missouri) along with Senators Pat Toomey (R-Pennsylvania), Joni Ernst (R-Iowa), David Perdue (R-Georgia) today introduced the Preserving Access to Cost Effective Drugs (PACED) Act, which restores the power of the Patent and Trade Office and federal courts, and the International Trade Commission to review patents regardless of sovereign immunity claims made as part of sham transactions.

In short, this scam hasn't worked out all that well. And it appears that the lead partner at Shore Chan DePumpo, Michael Shore, is a wee bit sensitive about all of this. Roy Schestowitz of the site Techrights.org has been writing about all of the PTAB shenanigans in numerous posts on his site. For example, here's a post he wrote on March 18th, about the anti-PTAB movement. That post, along with earlier posts about the PACED Act included a headshot of Michael Shore, the lawyer mentioned above.

Last week, another lawyer from Shore Chan DePumpo, Shukri Abdi, sent Schestowitz a laughably ridiculous cease and desist letter, claiming that Schestowitz was infringing on Shore's copyright in using a thumbnail of his headshot in those stories.

It has come to our attention that you are responsible for unlawfully publishing Michael Shore's photograph on the website www.techrights.org, as the named registrant and creator of the website, in violation of the United States Copyright Act. 17 U.S.C. § 101 et seq. We demand that you immediately cease such infringing activity, desist from such infringing activity in the future, and comply with the requirements set forth in this letter.

As you are no doubt aware, Mr. Shore has exclusive rights in his photographs, which you have widely reproduced, published, and/or distributed without permission. Your unauthorized reproduction, distribution, publication, and/or transmission of Mr. Shore's photograph on www.techrights.org, including the following webpages, constitutes copyright infringement.

The letter goes on to demand Schestowitz cease and desist from doing anything with the photograph and gives him until the end of this week to respond. In an abundance of caution, Schestowitz has done so. But he shouldn't need to. Abdi, a recent law school grad, specializes in patent and trademark issues, but considering she worked at the Intellectual Property Law Clinic in law school, one would hope that at some point someone taught her about Section 107 of copyright law, regarding exceptions to copyright law, including fair use. That starts out by noting that using works "for purposes such as criticism, comment, [and] news reporting" can be considered fair use, and thus non-infringing.

Indeed, there is a case that is directly on point on this issue, Dhillon v. Does, in which a lawyer named Harmeet Dhillon was upset about a website, called MungerGames, that published an article critical of her that included one of her own headshots that she had posted on the web. In other words, an identical situation to the one here. The court there found it to easily be fair use. And, of course, we won't even get that deeply into the open questions of whether or not Shore actually holds the copyright in this image. Abdi's letter states that Shore "has exclusive rights in his photographs" which is not entirely accurate. It's unclear who took this photo, but it clearly was not Shore. It is possible that there was an assignment of the copyright in the photo to Shore or that it was done under some sort of explicit work-made-for-hire agreement, but nowhere does the letter state that. Indeed, it seems to imply (incorrectly under the law) that Shore has exclusive rights in photos taken of him rather than by him. Notably, nowhere in the letter does Abdi suggest that Shore registered the copyright in the photo, which would be a necessary prerequisite to suing for statutory damages (there simply are no actual damages here anyway).

Of course, it's possible that Abdi knows all this and was just doing what the partners at her firm asked her to do, which was to send a purely bumptious, censorial threat to a blogger for daring to call out the sketchy legal practices of the law firm Shore Chan DePumpo in trying to craft sham patent sales for the sake of avoiding questionable patents getting invalidated by the PTAB. Of course, sending such a threat might just backfire, in the same way that Shore's plan to "sell" (wink, wink) patents to Native American tribes has backfired. Indeed, it might call attention to just how thin-skinned Michael Shore is, and how he's willing to have associates at his firm send out completely ridiculous, legally nonsensical threats in a weak attempt to try to scare off someone who was criticizing him.

And because this very story is about the headshot, and because using headshots is fair use, and because we're discussing it clearly, here is the headshot of Michael Shore:

Filed Under: bullying, cease and desist, censorship, copyright, fair use, michael shore, patents, ptab, roy schestowitz, shukri abdi, slapp, sovereign immunity
Companies: shore chan depumpo

Legal Threats By Charles Harder & Shiva Ayyadurai Targeting More Speech

from the chilling-effects dept

Let's say right upfront: if you are unaware, Shiva Ayyadurai is currently suing Techdirt for our posts concerning Ayyaduria's claims to have invented email. Ayyadurai's lawyer in this matter is Charles Harder, the lawyer who filed multiple lawsuits against Gawker, and is credited by many with forcing that company into bankruptcy and fire sale.

Now Harder, on behalf of Ayyadurai, has sent a demand letter to try to have social media comments posted in response to the lawsuit against us taken down. We are writing about this -- despite the lawsuit against us -- because we believe it is important and we do not intend to have our own speech chilled. This is also why we believe it is so important to have a federal anti-SLAPP law in place, because the chance to chill speech with threats or actual litigation is not a hypothetical problem. It is very, very real.

Harder's letter is to Diaspora, and it demands that certain posts by Roy Schestowitz be removed (which appears to have happened). Schestowitz is the guy behind the Techrights blog, which frequently covers issues related to things like free v. proprietary software and software patents. Harder's letter to Diaspora claims that Schestowitz's posts are defamatory, violate Diaspora's terms of service, and "constitute harassment and intentional infliction of emotional distress."

Harder's letter makes the questionable claim that Diaspora itself is liable for Schestowitz's statements. There is tremendous caselaw on Section 230 of the CDA holding that a website cannot be held liable for speech made by users, so it's odd that Harder would argue otherwise, stating that the posts "qualify under the law to establish liability against you."

One of the key reasons Section 230 of the CDA exists is to protect the freedom of expression of users, so that websites aren't pressured via legal threats to take down speech over fear of liability. That's why it grants full immunity. It is surprising that an attorney as established as Harder would overlook this. Elsewhere in the letter, he references Massachusetts law as applying, so it's not as though he's suggesting that some other jurisdiction outside the US applies. So, since Section 230 clearly applies, why would Charles Harder tell Diaspora that it is liable for these statements?

Separately, Harder's letter concludes with the following statement:

This letter and its contents are confidential, protected by copyright law, and not authorized for publication or dissemination.

We have seen similar statements on legal letters in the past and they have generally been considered meaningless, at best. On the question of confidentiality/authorization for publication, that's not how it works. The recipient of such a letter has no obligation to not disseminate it or to ask for authorization without any prior agreement along those lines. You can't magically declare something confidential and ban anyone from sharing it. Furthermore, this is especially true when dealing with legal threat letters. While many lawyers put such language into these letters to try to scare recipients (and avoid a Streisand Effect over the attempt to silence speech), they serve no purpose other than intimidation.

Separately, claims of copyright in takedown or cease & desist letters, while they do show up occasionally, are also generally considered to be overstatements of the law. First off, there are questions raised about whether or not general cease & desist threat letters have enough creativity to get any kind of copyright, but, more importantly, even if there were copyright on such a letter it would be a clear and obvious fair use case to be able to share them and distribute them publicly, as part of an effort to discuss how one has been threatened with questionable legal arguments.

Either way, we believe that this fits a pattern of using legal threats and litigation to silence criticism of public figures. In an era when speaking truth to power is so important, we believe such actions need to be given attention, and need to be called out. We also think they demonstrate why we need much stronger anti-SLAPP laws, at both the state and federal level to protect people's right to speak out about public issues. If you agree, please call your elected representatives and ask them to support strong anti-SLAPP protections, like those found in the SPEAK FREE Act of 2015.

Filed Under: anti-slapp, cda 230, charles harder, copyright, defamation, roy schestowitz, section 230, shiva ayyadurai, threats
Companies: diaspora

European Patent Office Threatens Blogger With Defamation Lawsuit For Criticism

from the thin-skin dept

World Intellectual Property Review (WIPR) is reporting that the European Patent Office, EPO, has threatened Roy Schestowitz with a defamation lawsuit over a blog post he did. Schestowitz writes the Techrights blog, which I personally think can go overboard with some of its stories at times. However, to argue that his stories are defamation, especially by a government agency, is crazy. Back in October, Schetowitz had a story claiming that the EPO was prioritizing patent applications from large companies like Microsoft to "foster a better esprit de service." I actually don't think the program described by the EPO actually sounds that crazy, and the EPO's response isn't that crazy either -- it's just about more efficiently handling certain patent applications to keep the office from getting swamped. Indeed, it does seem like Schestowitz may have overreacted with his interpretation of the memo. But, misinterpreting something is hardly defamation.

In fact, to argue that Schestowitz's post is defamatory is crazy. Threatening Schestowitz with a defamation claim is much crazier and dangerous than even Schestowitz's own interpretation of the EPO's memo. If you're working for a government agency, such as the EPO, you have to be willing to accept some amount of criticism, even if you disagree with it. To claim it's defamation and to threaten a lawsuit is really, really screwed up. Frankly, this calls into question what the EPO is focused on much more than any claims of favoring large companies. Also bizarre is the fact that WIPR edited its own story to remove any mention of what Schestowitz's original blog posts were about in the first place. They had originally included a sentence briefly describing the original Techrights blog post that got the EPO upset, but then deleted that part.

The EPO has been coming under a fair bit of criticism lately, and the entire organization appears to be astoundingly thin-skinned. A few months ago, the office apparently blocked access to Techrights altogether from within its network. That seems like a pretty strange move in the first place. Florian Mueller (and, yes, I know that many people here don't trust Mueller, but...) has pointed out how absolutely ridiculous the EPO can be about just about anything related to how it works:

The European Patent Office is the last dictatorship on Central European soil. Local police cannot allowed to enter the EPO's facilities without an invitation from the president. National court rulings cannot be enforced; compliance is voluntary. Employees and visitors are subjected to covert surveillance. And if employees are fired (or "suspended"), which just happened to several staff representative, they won't get their day in court for about ten years.

The EPO's leaders have a rather selective attitude toward the law. When it's about their wrongdoings, they want their organization to be a lawless, autocratic island that disrespects human rights. But when the rules of the world around the EPO come in handy, the leadership of the EPO tries to leverage them against those who dare to criticize it.

I'm having trouble thinking of any other governmental agency that has ever threatened a public critic with defamation. Basic concepts around free speech suggest that the EPO should suck it up. If it disagrees with Schestowitz's interpretation of what it's doing, then it can come out and explain its side of the story. Threatening him with defamation actually only makes me think that perhaps his interpretation hits closer to home than I originally believed.

Filed Under: criticism, defamation, epo, european patent office, roy schestowitz, thin skin
Companies: epo