30 June 2010

A Round Tuit (36)

A Round Tuit

When it comes to legal blogging, there seems to be no shortage of writing worth reading once one gets around to it.

What's that? You have no round tuit? My friend, you are fortunate indeed, for never before in human history have round tuits been so readily available. If you need one, Carbolic Smoke Ball Co. has them in stock.

While you place your order, I'll share a few posts which are worth your attention.

Viacom versus YouTube

A few months back, the Viacom v. YouTube litigation featured in one of these Round Tuit posts. The matter has now come to a conclusion of sorts, with YouTube and its parent, Google, claiming a decisive and well-deserved victory this past week. Andrew Raff reported the result:
In granting summary judgment for YouTube in Viacom v. YouTube, Judge Louis Stanton found that YouTube complied with the notice and takedown requirements set out in the DMCA [Digital Millennium Copyright Act] §512(c) Safe Harbor provision. By promptly taking down infringing works upon notice by the copyright owners, YouTube acted as service provider is required to in order to qualify for §512(c) safe harbor protection.

A general knowledge that users may be using the site to upload copyrighted material does not itself lead to liability under the safe harbor. "General knowledge that infringement is 'ubiquitous' does not impose a duty on the service provider to monitor or search its service for infringements." After all, how is a host supposed to affirmatively distinguish 3rd party works uploaded with consent from ones uploaded as infringements or others uploaded as fair use without notice from the copyright owner?

The ruling distinguishes YouTube from P2P services like Grokster and Limewire: YouTube was found to be prompt at complying with DMCA notices by promptly taking down infringing works.
As Evan Brown related, the court's focus was properly on the mechanics of the Safe Harbor and takedown processes:
Simply stated, the DMCA protects online service providers from liability for copyright infringement arising from content uploaded by end users if a number of conditions are met. Among those conditions are that the service provider “not have actual knowledge that the material or an activity using the material on the system or network is infringing,” or in the absence of such actual knowledge, “is not aware of facts or circumstances from which infringing activity is apparent.”

The major issue in the case was whether YouTube met these conditions of “non-knowledge” (that’s my term, not the court’s) so that it could be in the DMCA safe harbor. Viacom argued that the infringement was so pervasive on YouTube that the site should have been aware of the infringement and thus not in the safe harbor. YouTube of course argued otherwise.
Annsley Merelle Ward was one happy IPKitten after the summary judgment was granted:
The IPKat is incredibly impressed with what a glowing report this summary judgment seems to have been for YouTube and Google’s activities. Google and YouTube are obviously delighted.


Considering the mass of documents that Viacom had disclosed which seemingly evidenced YouTube’s own uploading of infringing content, the IPKat wonders why little hay was made of these documents.


So following this decision, the take home lesson for copyright owners wanting to get infringing material off YouTube or any other service provider's site is to draft your DMCA notice with a high degree of specificity and to actively police websites for your copyright works. For service providers, know nothing - but once you do, act fast.
Also very understandably pleased by the ruling was Google, whose General Counsel, Kent Walker, wrote:
This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other. We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world.
Super! Now give us back our damned "Hitler reacts to..." videos.

Less pleased by the outcome was Viacom General Counsel Michael Fricklas:
We are disappointed with the judge's ruling, but confident we will win on appeal.


YouTube and Google demonstrated that required tools to limit piracy aren't impossible to find or even that difficult to implement – they fixed the problem of rampant piracy on YouTube after Viacom filed this lawsuit.

Before that, however, YouTube and Google stole hundreds of thousands of video clips from artists and content creators, including Viacom, building a substantial business that was sold for billions of dollars. We believe that should not be allowed by law or common sense.

This case has always been about whether intentional theft of copyrighted works is permitted under existing law and we always knew that the critical underlying issue would need to be addressed by courts at the appellate levels. Today's decision accelerates our opportunity to do so.
Perhaps until things are sorted with the Downfall folks our new YouTube meme could be "Fricklas reacts to..." videos? I'll script the first one — "Fricklas reacts to England's humiliating exit from the World Cup" — in a nod to Viacom's co-plaintiff, the English Premier League:
This World Cup has always been about whether England needs to rebuild its national side, rethinking its approach to international play, and we always knew that the critical underlying issue would need to be addressed in the peace-and-quiet of a plane ride home from South Africa. Germany's ability to score on us at will accelerates our opportunity to do so.
Eric Goldman, who's followed the litigation closely throughout its long history, summed-up the impact of the decision:
The Viacom v. YouTube case has been noteworthy for numerous reasons. It involves the cherished Internet brands YouTube and Google, it's been going on forever (see my initial blog post on Viacom's complaint from March 2007), and it's generated lots of water cooler talk (see the salacious details from the parties' summary judgment motions).

Now, the case is also noteworthy because it hands YouTube a clean and decisive win on the DMCA 512(c) safe harbor. The ruling basically says that the current industry standard practices of notice-and-takedown for user-caused copyright infringement satisfies the safe harbor. Although this seems like an uncontroversial result when stated like that, the reality is that copyright owners have repeatedly angled to get a better deal than Congress gave them in 512. This case will squelch many of those copyright owner requests to force service providers to go beyond current industry-standard practices. Of course, we have to see how the opinion fares on appeal.

The opinion stays above the fray and avoids most of the messy facts from the parties' voyeuristic filings earlier this year. On the decisive question of what constitutes YouTube's actual knowledge or red flags awareness of infringement, the court immediately turns to the legislative history. Fortunately for YouTube, the legislative history is replete with defense-favorable statements.
Kurt Opsahl noted that the YouTube win protects responsible players under the current DMCA scheme, but that the struggle — even aside from Viacom's forthcoming appeal — is not yet done:
Without the DMCA safe harbors, sites like YouTube, eBay, Blogger, Wikipedia, and Flickr simply wouldn't exist. Where online platforms for free expression are concerned, it's unavoidable that some users will (knowingly or unknowingly) upload infringing material. The DMCA safe harbors give service providers like YouTube a strong incentive to remove content upon receipt of a takedown notice (Viacom sent 100,000 notices to YouTube in one day; virtually all the videos were gone by the next business day). In exchange, those service providers are shielded from copyright infringement liability.

So today's ruling, while a big win for YouTube, is hardly groundbreaking. It simply reconfirms what lawyers for Internet companies have been telling their clients for years, based on the plain language of the DMCA safe harbors. Of course, the fight is hardly over—Viacom has already vowed to appeal. Moreover, you can be sure that reversing this ruling and re-writing the DMCA safe harbors will be high on Hollywood's list of items for the Obama Administration's "comprehensive review" of copyright law, announced just yesterday.
Others also considered future copyright battlegrounds. Some suggested that the YouTube decision's reliance on prompt takedowns would lead to an overemphasis on takedowns at the expense of fair use reviews; Mike Masnick discussed the fair use problem and found cause for concern but not for panic:
[It was suggested] that those of us cheering on this ruling may now be disappointed because this ruling might lead to more bogus takedowns. Basically, the judge pointed out that Google's quick response in taking down content as soon as it received takedown notices helped give it safe harbor protections. However, many people (including us here at Techdirt) have, at times, complained about Google responding to takedowns (or content ID matches) way too quickly and not taking fair use or if it was a legitimate claim into account. The suggestion, then, is that to make sure they're covered by these safe harbors, companies may follow Google's lead and be quick with the takedown. On top of that, since the ruling reminds copyright holders that the law puts (as it always has) the burden on them to alert a service provider of infringement, they expect this ruling will lead to greater and greater takedown notices.

I have to say that I find this argument entirely unconvincing for a simple reason: to most in the tech industry, this ruling didn't change a damn thing. The judge effectively said that the DMCA says exactly what most here believed it said all along: if you get a DMCA notice, you probably should take down the content pretty quickly to avoid liability. You can leave it up, but you risk opening yourself up to liability, so for all intents and purposes, most service providers are very quick to pull down content. On top of that, most content companies that fear these sorts of things have already been pretty aggressive on the takedown front, so I don't see why they'd become any more aggressive. They're already doing all they can.
Randy Picker extrapolated from the Viacom-YouTube online video dispute to other technologies which has been gaining steam of late — electronic and print-on-demand books; Picker noted that the division between storage and "public performance" of content is an important one and companies which blur the lines between the two must tread carefully:
Consider a hypothetical. An online service provider offers backup storage for its customers. Customers copy files to a centralized server to protect against a local hard drive failure. Some customers upload files that infringe the rights of copyright holders, as might occur, for example, if a customer scanned an entire book so that it could have an electronic copy of the book. Assume such scanning to be infringing though I do understand that some contend that such full-scale digitization might be fair use under some circumstances.

The service provider notices that through its customers uploads it has amassed a very nice collection of digitized books. It decides to go into the print-on-demand business: customers check to see if a copy of the book is stored centrally and if so the service provider print outs a copy on demand and overnights it to the customer. Are these printed books protected by the storage safe harbor in section 512(c)?

I assume that the answer to that is no. The fact that part of your business may be protected by section 512(c) doesn’t insulate any other aspect of your business from potential charges of copyright infringement. Indeed, I assume that the YouTube district court agrees with me on this as it is crystal clear in stating that to the extent that YouTube’s activities go beyond the scope of storage and “allied functions” then normal principles of copyright infringement apply and YouTube is outside the safe harbor of section 512(c).

Supreme Court

As the current Supreme Court term wound to a close this past week, a flurry of major decisions were handed-down. I'll focus on three of the more anticipated ones — Skilling v. U.S., concerning "honest services" prosecutions, Bilski v. Kappos, concerning business process and software patents, and McDonald v. City of Chicago, concerning the applicability of the Heller-construed Second Amendment to the states.

Lyle Denniston reported the decision in Skilling:
For nearly a quarter of a century, federal prosecutors pursuing corruption cases — involving public officials and those in private life — have had a broadly worded criminal law available, and they have used it both creatively and expansively. On Thursday, the Supreme Court, while refusing to strike down the law under the Constitution, pared it down to what the majority called its “solid core”: the law may be used only to prosecute bribery or kickbacks. The Court suggested that Congress may want to try to expand the law’s reach, but warned the lawmakers to approach that prospect with constitutional hesitation.


[T]he construction those Justices put on the law was that it criminalizes “bribes and kickbacks — and nothing more.”

The majority thus rejected Justice Department arguments that the law should also be available for prosecuting for “self-dealing” — that is, taking some action that gives one personal gain, without disclosing that fact — or going after conflicts-of-interest. Reading the law as covering anything but bribes and kickbacks, the Court ruled, would raise constitutional questions about enacting a vague law that did not give people clear warning of what was forbidden. (Near the end of the main opinion, the Court in a footnote suggested that, if Congress were to try to add new crimes under the “honest services” law, it would “leave many questions unanswered,” so the lawmakers should proceed with “particular care.”)
Christine Hurt noted that the decision seems, on its surface at least, to be a personal win for Skilling:
[T]he Court does not hold the statute unconstitutionally void, protesting that its job is to "avoid constitutional difficulties by [adopting a limiting interpretation] if such a construction is fairly possible." The Court reasons that citizens have at least always been on notice that section 1346 criminalizes bribery and kickback schemes, so it therefore holds that the statute stands, but criminalizes only bribery and kickback schemes. Good news for Skilling, though, as he did not participate in any bribery or kickback scheme.
Tom Kirkendall pointed-out that though he's won a battle, Skilling can yet lose the war:
[D]espite his resounding Supreme Court victory, Skilling’s legal battles are not over. But slowly the truth about Enron and Skilling’s role there is emerging from the cloud of prejudice under which he was tried, both in court and in the mainstream media.

The truth about Enron is that no massive conspiracy existed. In reality, Skilling and the late Ken Lay were not intending to mislead anyone and that the company was simply a highly-leveraged, trust-based business with a relatively low credit rating and a booming trading operation. Although there is nothing inherently wrong with such a business model, it turned out it to be the wrong one to survive amidst choppy post-bubble, post-9/11 conditions when the markets were spooked by revelations of the embezzlement of millions of dollars by Fastow and a few of his minions.

That Jeff Skilling did not predict that Enron would fail under those conditions does not make him a criminal. Unlike his main accusers Fastow and Ben Glisan, Skilling didn't embezzle a dime from Enron. Did he tirelessly advocate this highly-leveraged but innovative company that was dealing with difficult market conditions during 2001? You bet. But since when is it a crime for a CEO to be optimistic -- even overly-optimistic -- about his company?
Scott Greenfield was critical of the robes' determination that the notoriously vague "honest services" law could be fairly and Constitutionally construed to cover just bribery and kickback schemes:
Nowhere in the statute is "honest services" defined to be bribes and kickbacks, and indeed, no prosecutor ever said so. Sure, they were included within the confines, but it covered so much more. Anything that, in the eyes of a prosecutor, could be rhetorically argued to meet a jury's approval as the way a corporate executive or officer should act or decide would fit the bill. It could convert the executive suite to a convent, where its inhabitants were expected to take oaths of poverty, chastity and obedience. Their lives would be dedicated to their corporate god, and they would have to satisfy the dogma of their prosecutor priests.

The Supremes fixed that. They gussied up the law by limiting it to two things, bribes and kickbacks.


Defining words is part of the Supreme Court's job. But it usually involves only trimming the edges, not a full color and mullet cut. Had Congress meant honest services to mean only bribes and kickbacks, it would have said so. These are not unfamiliar words to Congress, a number of whose members have some intimate familiarity with them. No one really suspects that Congress intended the law to be limited to those two instances; Congress criminalized an idea rather than any specific acts. That was its purpose.


A properly drafted criminal law should provide no risk that it be stretched out of shape. The citizenry deserve laws that have fully defined parameters, where they can tell if they've committed a crime rather than find out afterwards that conduct that appeared to be lawful can be twisted to fit.
John Wallbillich observed:
Apparently a white collar conviction requires a crime to have been committed.


I recall years ago getting an annual form letter from Mr. Skilling’s former boss, Kenneth Lay. Mr. Lay informed all counterparties that Enron was committed to ethical business conduct, and that any concerns should be reported to their compliance department. At the time I believe there were a few hundred staff members working on compliance.

Enron had very good compliance training videos, too.
Bad Lawyer has little regard for Skilling and his former colleagues, but he's glad that this exceedingly-overbroad prosecutorial tool has finally been reined-in:
Readers of Bad Lawyer know that I am no fan of these greedy, materialistic bastards.... But I do not understand, as a matter of justice, how a person can be aggressively prosecuted with every particle of probative dirt piled on a guy, under the guise of proving a violation of what turns out to be a vague and invalid law, charge, indictment. How is the taint of that prosecution not prejudicial as it relates to all the other charges. If I say, Joe Flabeetz is a dirty rotten thieving bastard and he violated such-and-such vague prohibition against dirty rotten thieving bastards, how are the legitimate charges that Flabeetz took money from the petty cash drawer not prejudicially affected by the vague and invalid prohibition. When we do this as a justice system aren't we in effect saying: "never mind?" Sounds like a violation of fundamental notions of fairness to me.
Larry Ribstein suggested that the central problem in "honest services" law is whether and where to draw the line between mis-, mal-, and non-feasance considered as simply an agency cost and that treated as a criminal offense:
Whether you call it bribery or serious loafing, it’s all agency costs. Particularly since there is no coherent federal law of fiduciary duties – it’s all state law – Congress can’t assume that the courts will have any idea what it’s talking about when talks about “honest services.”


The Court avoided a serious earthquake by holding that the statute could be interpreted to support the bulk of honest services prosecutions involving bribery and kickback allegations.

As a result of this approach, prosecutors will still be able to use the honest services statute in future cases. However, one hopes that this case, plus revelations of what I’ve called “the real backdating scandal,” will throw a dose of cold water on the whole enterprise of criminalizing agency costs.
Stephen Bainbridge agreed, writing:
The validity of criminalizing agency costs is really a matter for the legislature.

Instead, the Court took the cases to address the honest services statute's vagueness. The statute nowhere defines what it means by "honest services." Two decades of judicial opinions have failed to articulate clear boundaries for the statute. Almost everybody agrees that bribes and kickbacks are covered by the statute. beyond those clear violations, however, there was great uncertainty.

Today, a divided SCOTUS took a hatchet to the honest services statute, using Skilling's case as the vehicle. The opinion held that the statute was not unconstitutionally vague on its face. Instead, as limited to the core set of cases that the pre-McNally case law had criminalized and which Congress intended to restore by passing the statute. Accordingly, the statute properly could be applied to fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who had not been deceived.
The decision in the Bilski v. Kappos patent matter had been pending for some time; considering the unusual length of time the opinions were in the works, it was suspected that retiring Justice Stevens would write the majority opinion and that it would strike-down or severely curtail "business method" and software patents which do not meet the "machine-or-transformation" test. Anticipating such a result, John Duffy wondered why the petitioners, whose chances for success he rated at "as close to zero as can be imagined", did not seek to dismiss ahead of Monday's decision date:
Kenny Rogers’ hit song The Gambler provides some wise strategic advice, valid not only in cards and but also in law and perhaps in life generally: If “fold ’em” is an option, sometimes it is the best one. Supreme Court Rule 46 on “Dismissing Cases” provides petitioners in Supreme Court cases the opportunity to “fold ’em,” and in the days remaining before the Supreme Court delivers an opinion in its Bilski v. Kappos case, the most puzzling question in the case has become this: Why won’t the petititoners in Bilski fold?

From the perspective of the petitioners, the case for seeking dismissal seems overwhelmingly strong. In the months since the oral argument in Bilski, every Justice save Justice Stevens has delivered an opinion from the set of cases argued in the November sitting. Bilski remains the only case not decided from that sitting. Because only one case remains undecided and only one Justice has yet to deliver an opinion from that month, there is widespread agreement among those familiar with Supreme Court practice that Justice Stevens is writing the Court’s opinion in Bilski. Thus, the petitioners are now reduced to hoping that Justice Stevens, who once argued in dissent that all software should be outside patentable subject matter, will author an opinion that will be more pro-patent than the positions taken by all but one of the Federal Circuit judges.

But there’s more. Not only do petitioners have no realistic hope of winning anything in the case, they also have much to lose by persisting in the appeal.
When on Monday the Bilski decision was delivered, it mystified more than a few. Instead of a broad defeat of patents — like the ones in Bilski — which do not meet the stringent "machine-or-transformation" test, the ruling invalidated Bilski's patents as excessively abstract but also held that "machine-or-transformation" was not the only game in town; Ashby Jones reported:
To many followers, the outcome wasn’t all that surprising. The U.S. Court of Appeals for the Federal Circuit had earlier struck down the patent, and many saw the Supreme Court’s decision to review the decision as reflecting a desire to push the bar even higher on business-method patents, perhaps relegating them to the dustbin forever.

But that didn’t happen. On Monday, the Court ruled that the method at issue was too abstract to be patented. But ratcheted back the ruling of the Federal Circuit, possibly making business-method patents easier to receive than they were before.
Dennis Crouch summarized the results:
In the decision, the Supreme Court affirmed that Bilski’s risk-management method was not the type of innovation that may be patented. However, rather than using the Federal Circuit's "machine-or-transformation test", the court simply relied on prior precedent to find the claimed method unpatentably abstract.


In general, the opinion offers no clarity or aid for those tasked with determining whether a particular innovation falls within Section 101. The opinion provides no new lines to be avoided. Rather, the outcome from the decision might be best stated as "business as usual."


Although the court expressly refused to rule on the patentability of software, it appears that software will largely remain patentable. At minimum, the decision would bar any categorical exclusion of software patents. The court neither endorsed nor rejected the Federal Circuit's past interpretations of Section 101 -- Noting that "nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past.


Although the majority opinion refused to define the term process, it did write that the machine-or-transformation test developed by the Federal Circuit does not define what is (and is not) a patentable process. Rather, the Court held that the machine-or-transformation offers "a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101. The machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible process." As a "clue," the machine-or-transformation test likely correlates with the existence of patentable subject matter. However, some patent claims that fail the test will still be patentable and other patent claims that pass the test will still be ineligible.
Notwithstanding the somewhat inconclusive results in Bilski, Crouch noted that the "useful-concrete-and-tangible-result" test described in the State Street decision has now been rejected by a clear majority of judges and justices at the Federal Circuit and SCOTUS:
Cumulatively, this means that the broadest notion of patentable subject matter as represented by State Street is not the law. Although not "the test" it appears that the USPTO will continue to use the machine-or-transformation test as a "tool" for determining whether particular process claims fit within Section 101.
Looking at the messy result in the case (which he summarized as "We don’t like what you came up with, but we can’t come up with anything. Try something else, and we’ll let you know what we think about that."), Gerald Magliocca speculated that Justice Stevens had been composing the sort of broad opinion observers had anticipated, but "lost his majority somewhere along the way". Joe Mullin shared his suspicions:
In the last batch of opinions to which he will ever contribute, retiring U.S. Supreme Court Justice John Paul Stevens fell one vote shy in his goal of moving methods of doing business outside the scope of the country’s patent system. And he marked the occasion by weighing in with a concurring opinion that reads an awful lot like a dissent.


In his minority opinion, Stevens argued that business-method patents are overly broad grants of monopoly rights, likely to stifle innovation and harm competition. Patents on business methods are patents on business itself," he wrote. "Therefore, unlike virtually every other category of patents, they are by their very nature likely to depress the dynamism of the market."

In the end, however, his argument couldn’t carry the day.

"It looks like Stevens could not garner five votes and got dumped from the majority," says Ed Reines, a patent litigator in Weil Gotshal's Silicon Valley office.

The ruling, Reines says, won’t create any major changes in patent law, except to encourage the Federal Circuit "to develop limiting doctrines" that apply to novel and non-obvious subject matter vigorously—especially when it comes to business-method patents. The net result, he says, is that Federal Circuit judges will be able to create their own tests and limits without "trying to read the tea leaves in Supreme Court law."
Brett Trout discussed whether the "Gordian Knot" of post-State Street business method patents remained tied:
While the Federal Circuit, and the rest of the world, were looking for a new test for the patentability of business method claims, the Supreme Court stopped short of offering any new rule or guidance. Noting that because Bilski’s claim was unpatentable under prior rulings as an abstract idea, there was no reason for the Supreme Court to further define what may or may not constitute patentable business methods. Justice Kennedy noted that Benson, Flook, and Diehr provided the necessary “guideposts” as to what constitutes a patentable process under 35 U.S.C. §101. The majority went on to note that nothing in the Bilski opinion should be read as endorsing State Street or any of the Federal Circuit’s past interpretations of §101. Basically, business as usual.


The ruling in Bilski did not upset the apple cart one way or the other. The ruling will invalidate very few, if any, existing patents. It will also not invite a deluge of patent applications on abstract ideas.
At the Groklaw blog, there was some disappointment that the patent law tangle remained stubbornly knotted after Bilski:
I think the State Street and AT&T interpretations of Section 101 by the Federal Circuit just got tossed overboard...

Not everyone on the court agrees in all particulars. So it's complicated, and obviously not all we hoped for. But it's encouraging in some respects as to the future. What is clear is that the "machine or transformation test," while useful, is not the *sole* test for eligibility to obtain a patent.


What they did is pull back some from the lower court's decision slightly. They don't get the tech, I'm afraid. And they believed the BSA, which in my view is a mistake. And they think patents are a good thing. They didn't specifically address software patentability. They passed on that question. So, this will require more work, later cases. But I find it significant that they searched for a *limiting* principle, even if not ruling today on certain categories, like software patents. They did not say everything under the sun is patentable. And they are clearly aware that patents can get out of control to the point where they hinder, rather than foster, innovation. Have we seen that before in a Supreme Court opinion? They seem to think they are describing a future problem, though, not one already happening, as far as chilling innovation. That is already happening in software development, particularly for Free and Open Source software development. Presumably future cases may open opportunities to further explain the problem.
Michael Barclay was also unenthusiastic:
By watering down the CAFC’s [Court of Appeals for the Federal Circuit] “machine-or-transformation” test, the Supreme Court regrettably failed to provide guidance in the future about business method patents. For example, suppose a patent claim is not clearly unpatentable as just an abstract idea, but it does fail the now-optional “machine-or-transformation” test. When will such a claim be patentable? The Court did not answer that question, or provide details about how to apply its “abstract idea” test.

In short, the ruling has done little to clean up the mess the CAFC helped created in 1998, when it decided State Street Bank & Trust Co. v. Signature Financial Group, and opened the doors to patents for novel methods of doing business. That ruling knocked patent law loose from its historical moorings and injected patents into business areas where they were neither needed nor wanted. The results had been nothing short of disastrous: a flood of patent applications for services like arbitration, tax-planning, legal counseling, charity fundraising, and even a “system for toilet reservations.” In its Bilski opinion, the CAFC tried to fix the problem by effectively overruling State Street. Yesterday’s ruling eroded the CAFC’s limits on process patents, and thus missed an opportunity to fix some of the problems with those patents.
With all of the speculation amongst the patent bar and legal academics about how the Bilski decision would be implemented in practice, Vincent LoTempio provided some insight into how it will be used within the USPTO; he summarized the Bilski guidance sent Monday from Robert W. Bahr, Acting Associate Commissioner for Patent Examination Policy, to his patent examiners.

In McDonald v. City of Chicago, the Court considered whether the Second Amendment right to keep and bear arms, which was determined in the recent Heller decision to be a personal right precluding absolute prohibitions of handgun possession in the home, is incorporated by either the Due Process or Privileges or Immunities clauses of the Fourteenth Amendment and thus applicable to the various states. For ease of reference if you're scoring at home, the Second Amendment provides:
A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.
The Fourteenth Amendment provides in Section One:
No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
As usual, Lyle Denniston provided the best summary of the close decision in McDonald:
Five members of the Supreme Court on Monday assured state, county and city officials not to worry: the new decision protecting a “right to keep and bear arms” against government action at any level — local, state or national — “does not imperil every law regulating firearms.” But the Court majority did not have any assurances for judges at every level, that they will be spared the duty of ruling on many forms of gun regulation that a legislature, county board, or city council has chosen to enact. And the Court gave those judges very little guidance, in its ruling in McDonald, et al., v. Chicago, on how they are to analyze those laws.

The Court did not even rule on the constitutionality of the one law that was at issue — a handgun ban in Chicago — nor did it tell the Seventh Circuit Court what constitutional standard to apply in judging that law when the case returns there. That particular law’s fate, like that of so many others around the nation, now must await a new round in court.

What the Court’s assurance aimed to do was to forecast that opponents of gun control will not win every time. But it had no authority to prevent many such battles from arising in the lower courts. It is fair to speculate that, after decades of frustration that the Second Amendment had not limited state and local power to pass gun laws, there is a pent-up demand to use it now that it is newly available as a high-powered legal weapon against such legislation. Judges, in short, are about to learn what legislators have long known: given the passionate support that exists for gun rights, virtually any attempt to curb them produces a pitched battle. The dueling of lobbyists will now be replicated by dueling attorneys.
Even before the ink was dry on the opinions, Douglas Berman was considering McDonald's impact on gun rights claims by criminal defendants:
Now that the Supreme Court has clarified that the Second Amendment applies to the states, there are likely a significant number state criminal defendants who will now start urging state courts to decide that the Second Amendment should block some state prosecutions based on gun possession and use. And the many divisions in the McDonald opinion probably ensures that lower courts will be divided when ruling on these issues.
Berman was a bit puzzled, however, by some of the dicta he found in Justice Alito's opinion:
[T]oward the end of his opinion, Justice Alito in dicta "repeats [Heller's] assurances" that the Court's Second Amendment rulings do "not cast doubt on such longstanding regulatory measures as 'prohibitions on the possession of firearms by felons'." Slip op. at 39-40. But doesn't this dicta essentially connote that the Second Amendment really is going to exist as "a second-class right, subject to an entirely different body of rules than the other Bill of Rights guarantees"?
Eugene Volokh analyzed McDonald's effect on the standard of review applicable to gun control statutes:
Courts shouldn’t simply ask whether right-to-bear-arms claims should be subject to “strict scrutiny,” “intermediate scrutiny,” an “undue burden” test, or any other unitary test. Rather, as with other constitutional rights, courts should recognize that there are four different categories of justifications for a restriction on the right to bear arms:
  1. Limited Scope: A restriction might not be covered by the constitutional text, the original meaning of the text, the traditional understanding of the text’s scope, the background legal principles establishing who is entitled to various rights, or the categorical exceptions set forth by binding precedent (such as Heller’s statement that bans on gun possession by felons, bans on concealed carry, and several other kinds of gun controls are constitutional).
  2. Slight Burden: A restriction might only slightly interfere with rightholders’ ability to get the benefits that the right secures, and thus might be a burden that doesn’t rise to the level of unconstitutionally “infring[ing]” the right.
  3. Reducing Danger: A restriction might reduce various dangers (in the case of arms possession, chiefly the dangers of crime and injury) so much that the court concludes that even a substantial burden is justified.
  4. Government as Proprietor: The government might have special power stemming from its authority as proprietor, employer, or subsidizer to control behavior on its property or behavior by recipients of its property.
But this having been said, the “reducing danger” justifications are indeed often evaluated under intermediate or strict scrutiny, and some lower federal courts dealing with Second Amendment challenges after Heller have indeed applied these standards of review. And while McDonald doesn’t purport to discuss what standard of review courts should apply, it might still affect the matter.
In a subsequent post, Volokh suggested that criminal defense lawyers in Louisiana and Oregon might leverage the McDonald decision to attack the holding in Apodaca v. Oregon that the Sixth Amendment's unanimous verdicts requirement is not applicable through the Fourteenth Amendment:
[N]ow, there’s a fresh precedent pretty solidly condemning the Apodaca approach of incorporating a right against the states, but only partly. Justice Thomas is especially on the record against selective incorporation generally, but the other four conservatives are on the record against partly incorporating a clause in a way that leaves it less applicable to states than to the federal government. And even the McDonald dissenters might be willing to revisit Apodaca; only Justice Stevens generally supported a partial-incorporation approach in McDonald, and he will now be off the Court.
Scott Greenfield foresaw decades of battles over states' and cities' attempts to re-regulate firearms ownership in the wake of Heller and McDonald:
McDonald did one thing only, holding that the right enunciated in Heller applies to the states. As with the mystery paragraph of Heller, the Court reiterated that the decision doesn't preclude regulation and limitation. This leaves open the next hundred years of piecemeal litigation over each and every inch of imaginative legislation to see where the line is drawn. We're so far away right now that we can't even see the line, no less know what the line precludes.


More decisions needed to flesh out the right mean more years before anybody really understands what can and can't be done.

If the City and State of New York were miraculously inclined to embrace the concept, however, the best one could hope for, given what the Supremes have offered up to now, is an onerous application/registration process for ownership of a non-automatic handgun or rifle within the home (only) for the purpose of self-defense by sane, competent and trained people over the age of 21, without any prior felony, and possibly serious misdemeanor, conviction, restraining order, and maybe open investigation.

The process would be prolonged and expensive, and would require proof of insurance for the weapon, which would again be expensive. While applicants would not be required to show special need to possess a weapon for self -defense, they might be required to provide verifiable proof of everything they've ever done in their life from birth to the day of application. In triplicate.

In other words, don't expect any rush on guns any time soon. And that's assuming the powers to accede to the 2nd amendment. They won't. They will fight it every inch of the way. Given the Supreme Court's apparent inclination to parse out the details as if the cost is paid from Scalia's pocket personally, it could take forever before all the questions are answered.
Though the complete future of gun regulation at the state and local levels can't yet be known, Matthew Scarola offered an admirable overview of Heller's and McDonald's effects. Adam Winkler, however, predicted that the effect of McDonald won't be as pronounced as some have suggested:
From the perspective of gun rights, however, that isn’t as big a change as it may seem at first. Forty-two states already guarantee individuals the right to have guns in their state constitutions. McDonald extends that right to the remaining eight outliers. None of those eight states, however, ever tried to completely ban gun ownership and qualified individuals can lawfully obtain guns in every one. The Second Amendment now applies more broadly, but gun rights more generally were secure long before this decision.
Jon Lowy also wrote that McDonald will have little short-term effect on gun regulations:
The fact is, the McDonald v. Chicago case will likely have a very limited impact. The Court reaffirmed the narrow contours of the Second Amendment right recognized in District of Columbia v. Heller, again holding only “that the Second Amendment protects the right to possess a handgun in the home for the purpose of self-defense.” As a result, bans on handguns in the home are no longer permitted. But the bans in Chicago and Oak Park at issue in McDonald were the last of their kind in the nation. There are no more gun-ban dominoes to fall in subsequent litigation.
Jack Balkin joined the chorus of academics who foresee little practical effect in the McDonald ruling:
McDonald v. Chicago is a very long opinion, and quite interesting theoretically, but its practical effect is likely to be fairly small. The vast majority of states already have guarantees of a right to bear arms. The case is remanded for further proceedings. The Chicago ordinance, which bans handguns in the home, is likely to be held unconstitutional under Heller. However, the big issues really have yet to be decided. Moreover, McDonald goes out of its way to restate language in Heller suggesting that a range of traditional limits on firearms will be unaffected by an individual right to keep firearms for self-defense in the home. Since most states already apply a reasonableness test for gun regulations, and uphold many different types of gun control laws, it's likely that the federal courts will be not be much more protective. McDonald, like Heller, is a symbolic opinion more than a revolution in the practical effects of the law.
Ilya Somin was singing for the other side, but with a note of caution:
Today is a big victory for gun rights and a bigger one for liberty. The Court correctly decided that state actions violating the right to keep and bear arms are no more valid than those taken by the federal government. But it could not have been otherwise: the Fourteenth Amendment, coming on the heels of the Civil War, says clearly that never again would the Constitution tolerate state oppressions and that all individuals possess certain fundamental rights. And it is equally clear that the right to keep and bear arms is one of those deeply rooted fundamental rights, not least because the Framers thought so highly of it as to enumerate it in the Second Amendment.


[A]s we celebrate the belated recognition of a precious right – the one that allows us to protect all the others – we must be shocked and saddened to see four Justices (including Sotomayor, who at her confirmation hearings suggested she would do otherwise) standing for the proposition that states can violate this right at will, checked by nothing more than the political process. This is a nation of laws, not men – a republic not a pure democracy – and thus it is disconcerting to see, as we do time and time again with this Court, that the only thing separating us from rule by a crude majoritarian impulse is one vote.
In particular, Justice Thomas' concurring opinion, with its discussion of the Privileges or Immunities clause, was analyzed and applauded by many. Ashby Jones asked whether his concurrence is Thomas' "finest hour":
So you’ve never heard of the Privileges or Immunities Clause? We’re not surprised. The clause was largely neutered in a set of cases decided in 1873.


Commentators on the right and left urged the Supreme Court to reverse the 1873 cases and safeguard the right to bear arms through the Privileges or Immunities Clause. Such a move could have opened an avenue for individuals to claim new rights, some which might have pleased liberals, others which might have pleased conservatives.

Those arguing for resuscitation of the Privilege or Immunities Clause pinned their hopes on Justice Antonin Scalia and Justice Clarence Thomas, both known for their “originalist” approach to constitutional interpretation.

But Justice Scalia on Monday opted, along with Justices Alito and Kennedy and Chief Justice Roberts, to use the Due Process Clause. ...Justice Scalia, in a concurrence, “acknowledged misgivings about using the due process clause to apply Bill of Rights protections to the states” but went along with it “’since straightforward application of settled doctrine suffices to decide it.’”

But in a separate concurrence, Justice Thomas boldly went where no justice has gone before: to the arms of the Privileges or Immunities Clause. He wrote:
[T]he text of the Privileges or Immunities Clause . . . command[s] that “[n]o State shall . . . abridge” the rights of United States citizens . . . the Clause establishes a minimum baseline of federal rights, and the constitutional right to keep and bear arms plainly was among them.
The rationale didn’t carry the day, but many legal commentators were thrilled by Justice Thomas’s concurrence. “He’s sticking with the text of the Constitution,” said Georgetown law professor Randy Barnett, to the Law Blog. “At the same time, nobody voices disagreement with Justice Thomas. And that’s because they can’t.”
Nelson Lund wrote:
The most interesting aspect of the decision is Justice Thomas’ concurrence, which rejects the plurality’s reliance on the judicial fiction of substantive due process. Thomas relies instead on the original meaning of the Privileges or Immunities Clause. His opinion is scholarly and judicious, and it cements his standing as the only Justice who is more than a half-hearted originalist. Thomas confines himself to the issue presented, which involves only the right to keep and bear arms, and explains why stare decisis should not foreclose an originalist approach in this case. With appropriate judicial restraint, he declines to decide in advance exactly what implications his analysis may carry with respect to substantive due process precedents involving other provisions of the Bill of Rights.
Randy Barnett added that Thomas' opinion had resurrected the Privileges or Immunities clause:
Decades of academic research that has lead to a remarkable consensus among constitutional scholars that The Slaughter-House Cases was wrongly decided have now been vindicated. Only a remarkably tepid and barely defended assertion of stare decisis by Justice Alito now stands in the way of a complete restoration of the “lost” Privileges or Immunities Clause at the heart of Section One of the Fourteenth Amendment. Not that this will happen overnight.
Josh Blackman considered where the long-lost Privileges or Immunities clause goes from the Thomas concurrence in McDonald:
[T]he Court could have ruled on narrower grounds. They could have said the privileges or immunities clause only protects enumerated rights. Or they could have ruled on broader grounds, and said the privileges or immunities clause protects nothing. Instead, they did neither. They argued that the petitioner failed to address their concerns, scholars are conflicted, and precedents stand in their way.

The exact same argument could have been made about DC v. Heller. Petitioner did not address concerns about bans on the exact scope of gun control regulations. There had been decades of debate among scholars about the history of the second amendment. And the Court reversed over a century of precedents.

But if the Supreme Court wishes to give the Privileges or Immunities Clause more teeth in the future, I hardly see this opinion as standing in the way.

Odds n Ends Shop

Though a long-anticipated ruling concerning the Public Company Accounting Oversight Board (PCAOB) was less-than-exciting, Stephen Bainbridge found a passing quote from Chief Justice Roberts worth a take-away:
One can have a government that functions without being ruled by functionaries, and a government that benefits from expertise without being ruled by experts. Our Constitution was adopted to enable the people to govern themselves, through their elected leaders. The growth of the Executive Branch, which now wields vast power and touches almost every aspect of daily life, heightens the concern that it may slip from the Executive’s control, and thus from that of the people.
Granted, it's not exactly William Wallace's speech before the Battle of Stirling from Braveheart. It's not even President Whitmore's dawn speech on July 4th from Independence Day. But it's not bad. Not bad at all.
Inspiring? Certainly, but for my money you can't beat this from Dan Hull:
Get off your knees. Lead.

Stop whimpering, groveling, and apologetically asking employees to do their jobs.

Make yours moxie. It's your business, and your rules. Get off your knees. Demand things first of yourself--and then of others. (1) What are you doing this week at your firm? (2) What are your employees doing for you and your partners this week? (3) What did you all do together for customers, buyers and clients?

It's time for lawyers and other service providers to lead. At your shop, refuse to be a slave to lawyer-centric and employees-first popular cultures. Stop whimpering, groveling, and apologetically asking employees to do their jobs. Don't bargain with them. Show them. Lead.
Somewhat less inspiring are the results of a recent C-SPAN poll, which revealed how little Americans really understand about the functions of the Supreme Court. Elie Mystal found that those results revealed "America's ongoing stupidity about the Judicial Branch". Noting that Americans by-and-large can't name a single Supreme Court decision other than Roe v. Wade and have no clue why Elena Kagan is spending a lot of time on Capitol Hill this week, Mystal was most dismayed that those polled thought that the SCOTUS deals frequently with hot-button issues like abortion and Affirmative Action:
The Supreme Court hasn’t heard a major affirmative action case since, what, Michigan? Bollinger came down in 2003. The Supreme Court hasn’t heard a landmark abortion case since Planned Parenthood — in 1992! (Maybe I’ll give you Carhart — that was in 2007.)

Surely the Court doesn’t deal with abortion “most often.” How can we be this uninformed?

And yet, with nary a clue about what the Court does, the cases they hear, or even who sits on the freaking bench, 48% of the people think the Court is doing a better job of serving the public’s interests than the other branches of government.
The general cluelessness about the highest court in the land came as no surprise to Tom Goldstein:
Ideologues on both the left and right, as well as the public generally, frequently repeat their own received wisdoms that the Supreme Court is an easily categorized institution and that the Justices are committedly “liberal” or “conservative,” with Justice Kennedy as the lone swing vote. Liberals and conservatives also consistently accuse their opposites of being “activists,” a point vividly on display in the Senators’ opening statements in the Kagan confirmation hearings. The just-completed Term proves, I think, that those generalizations are often misleading or outright wrong.


Start with the Court’s ideological divide. Although some cases are decided five to four, that’s no more than twenty percent of the docket this Term (we’re running the final numbers now). Roughly half the decisions are nine to zero. Only slightly more than one in ten cases involved the narrow liberal-conservative divide (fewer, if we don’t include cases in which we presume Justice Sotomayor would have voted with the left had she not been recused).

Though the Term ended (as it often does) with decisions decided along ideological lines, other five-to-four decisions that intuitively might have been decided on an ideological basis during the course of the Term were instead resolved by totally unpredictable alignments.


I admit that the nuance and diversity among the Justices’ views, and varied directions of their decisions, was more apparent to me this Term than in any other that I can remember. It’s worth pausing to consider why that might be true. In addition to the fact that much depends on the precise mix of cases that happen to be reviewed, this may illustrate the point often made by the Justices that a change in the Court’s composition has unexpected consequences. Justice Sotomayor was appointed last year, of course, after the relatively recent confirmations of the Chief Justice and Justice Alito. Before that, it had been more than a decade since the last change in membership. In that earlier period, now well behind the Court, the Justices had settled into a fairly regular pattern of votes in significant cases.
Speaking of changes in Court personnel, you'll note that despite the mammoth size of this week's Round Tuit, there's hardly a mention of the Kagan confirmation hearings. Meh. Something's got to give and if you want to know all about "Lady Kaga" and her poker-faced confirmation performance, I can't beat the day-by-day coverage you get from David Lat and Elie Mystal over at Above the Law (see here, here, here, and here for first and second day liveblogs).

Header pictures used in this post were obtained from (top to bottom) Carbolic Smoke Ball Co., TechShout.com, Wikipedia, and Paris Odds n Ends Thrift Store.

1 comment:

Hull said...

Kudos on this one, too. A tome. Dang. And thanks.