Monday, June 17, 2013

REPOST: Patent Board's SAP ruling is first under new AIA rules

This article talks about the Patent Board's first ruling under the new America Invents Act rules.

In the first ruling of its kind since the America Invents Act established a new system for reviewing patents, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) ruled Tuesday that a key patent used in a case brought by Versata Inc. against SAP America Inc. is too abstract and therefore invalid.

The dispute revolves around a business method patent related to dynamic pricing technology, which Versata alleged SAP infringed. In 2007, Versata sued, claiming SAP stole its patented technology, and said that demand for its product dropped precipitously after SAP started offering the same software.

But in the first case to be tried under the covered business method (CBM) post-grant review proceedings initiated under the under Leahy-Smith America Invents Act of 2011, the PTAB ruled that the patent, known as the ‘350 patent,’ is invalid. “Specifically, the claims recite unpatentable abstract ideas and the claims do not provide enough significant meaningful limitations to transform these abstract ideas into patent-eligible applications of these abstractions,” the written decision said.

The case had followed a parallel track in federal court, and in May, the U.S. court of Appeals for the Federal Circuit affirmed a lower court decision ordering SAP to pay Versata $345 million in damages for infringing Versata’s patent. SAP has petitioned the appellate court for a rehearing and that request is pending. The PTAB decision, however, means SAP may have a chance to get the infringement ruling overturned.

“We’re pleased with the decision and pleased for our client,” said Erika Arner, a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, and one of the attorneys who represented SAP at the PTAB trial.

Versata will appeal the PTAB ruling to the Federal Circuit, said Scott Cole, a partner at McKool Smith who represents Versata. The company has also challenged the notion that the PTAB had authority in this proceeding on two separate grounds, Cole said. “We think the decision is completely off base, and we are confident that on review it will be flipped,” he said.

But the PTAB ruling, which was issued only 9 months after the case was first filed, could lead other companies to use this new system to challenge patents based on business methods, said Steven Baughman, a partner at Ropes & Gray who also represented SAP before the PTAB. Baughman, who is counsel on 15 of the 28 petitions that have been filed so far before the PTAB, said the speed with which such cases can be resolved, as well as the broad view of what qualifies as a business method patent, could encourage others to consider such a proceeding. “It’s a good alternative to district court, and we were pleased with the process and the way the board viewed the evidence,” he said. “I think others who were hesitant to go to the PTAB before will now begin to see its benefits.”

Senator Charles Schumer (D-NY) has introduced legislation that would allow other types of patent challenges to be heard by the PTAB—an effort to discourage patent assertion entities, or patent trolls, that use broad patents to sue.

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Sunday, June 16, 2013

REPOST: When mandatory arbitration replaces litigation, consumers lose

Paul Samakow argues for litigation and against required arbitration procedures for employer, consumer, and civil rights disputes as he shares details on why a proposed legislation that would eliminate mandatory arbitration would bring fairness back to consumer and employee rights cases. Read about it here:


Legislation that would eliminate required arbitration for employee, consumer and civil rights disputes was proposed last month. It should be passed.  Congress must act to restore fairness.

Big business and corporate money, along with a corporate friendly Supreme Court, have been enough in the past to defeat efforts to bring fairness back to the arena of routine consumer and employee rights. Unfortunately, the same thing is likely to happen again, and the Arbitration Fairness Act of 2013 that has been introduced in the House (and a similar bill in the Senate) will likely fail.

As the law exists now, you do not have the right to file a lawsuit for many consumer and employee and civil rights complaints. In these situations, the law requires you to submit to binding arbitration. Binding means no further review, no other options, no going to court.

If the arbitration process were neutral, independent and not connected to corporate purse strings, it might not be so bad. Unfortunately, in most consumer, employment and civil rights cases, the likelihood of the “little guy” prevailing is almost zero.

The existing law of our land, the Federal Arbitration Act, has been interpreted by the pro-big business Supreme Court and thus gives businesses a significant advantage in resolving disputes with us. We are forced into binding arbitration, and the Court says this is legal.  Legislation is needed to turn back the clock and restore fairness.

Most contracts we sign with big business today include mandatory arbitration clauses. These include contracts for cell phones, credit cards, mom’s or dad’s nursing home, and even on-line user agreements. Thus, when presented with these contracts, where the arbitration clauses are in fine print and often in difficult-to-understand legalese, we routinely sign, and thus, we “voluntarily” give up the right to file a lawsuit if there are problems.

The same thing happens in routine employment civil rights matters. Most big business or large corporation employee handbooks state that the employee cannot sue their employers, and that they must submit to a binding arbitration process for almost any issue.

The arbitration process is usually secretive and it is far from independent. Hearings are closed, unlike what you see in courtrooms across America or even on television. There is no appeal or next level review.

Arbitration panels are overwhelmingly funded by big business. Thus, to assure they keep getting the work, arbitrators almost always rule in favor of the business. They understand that decisions against the business will result in their firms not being used again.

When we lose access to the courts, corporations are effectively given a license to steal. Our ability to seek justice in the courts, even when up against the most powerful corporate interests, is an essential part of our democracy.

Here are selected portions of the proposed legislation:

Section 2:  Findings:

(3) Most consumers and employees have little or no meaningful choice whether to submit their claims to arbitration. Often, consumers and employees are not even aware that they have given up their rights.

(4) Mandatory arbitration undermines the development of public law because there is inadequate transparency and inadequate judicial review of arbitrators’ decisions.

Section 4:  Definitions:

(2) civil rights dispute means a dispute—

(A) arising under—

(i) the Constitution of the United States or the constitution of a State; or
(ii) a Federal
or State statute that prohibits discrimination on the basis of race, sex, disability,
religion, national origin…in education, employment, credit, housing, public
accommodations and facilities, [or] voting….

(3) consumer dispute means a dispute between an individual who seeks or acquires
real or personal property, services (including services relating to securities and other
investments), money, or credit for personal, family, or household purposes….

(4) employment dispute means a dispute between an employer and employee arising
out of the relationship….

Sec. 402. Validity and enforceability

(a) In General- Notwithstanding any other provision of this title, no pre-dispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment dispute, consumer dispute, antitrust dispute, or civil rights dispute.

This legislation broadly defines “employment dispute,” and in it “consumer dispute” is defined broadly enough to include a wide range of legal conflicts. If passed, this bill would eliminate arbitration as the required course of action for employee claims – as well as those brought by consumers – unless all parties agreed to arbitration once the dispute was identified.

U.S. Representative Hank Johnson (D-GA) and Senator Al Franken (D-MN) introduced this needed legislation. Johnson said in so doing that “forced arbitration clauses undermine our indelible Constitutional right to take our disputes to court.”

“Mandatory arbitration can be a huge disadvantage to consumers, often limiting their ability to have any meaningful legal recourse when they are wronged,” Sen. Franken said. “I’ve reintroduced the Arbitration Fairness Act to ensure that consumers maintain their right to their day in court when they are cheated.”

The Supreme Court, an ally of big business and corporate interests over the last several years, has helped those interests in several holdings and in so doing has further eroded consumers’ rights. In one case, Stolt-Nielsen v. Animal Feeds International, 2010, the Court upheld as valid required arbitration agreements for class action claims. In another, AT&T Mobility LLC v. Concepcion, 2011, the Court held that arbitration agreements may ban class actions even when such a ban was expressly prohibited by state law.

These holdings seriously harmed consumers’ rights and served to further protect corporations from accountability. Class actions were designed to allow many individuals with similar claims, too small in nature or dollars to prosecute by themselves, to join together to try to right a common and recurring wrong. By stripping the class from the right to file a unified lawsuit, requiring instead arbitration, the little guy is once again kept down and effectively never heard from.

The existing law, the Federal Arbitration Act (FAA), was originally passed to make sure that the courts enforced commercial arbitration agreements, that is, between companies, not between companies and consumers. The Supreme Court’s rulings allow big business and corporate America to insulate themselves from liability in small one-by-one cases and in attempted larger, what-would-have-been class action claims.

Because of the rulings by the Supreme Court that interpret the Act in an expansive anti-consumer fashion, Congress must act in order to restore fairness.

Representative Johnson and Senator Franken have been consistent advocates for the little guy. In 2009 Sen. Franken passed legislation with bipartisan support that restricted funding to defense contractors who committed employees to mandatory binding arbitration in cases of sexual assault and other civil rights violations. Rep. Johnson, a longtime advocate of workers’ and consumer rights, first introduced the Arbitration Fairness Act in 2007.

Their proposed legislation would change the FAA by:

1. Invalidating agreements that require arbitration in employment, consumer or civil rights disputes;
2. Restoring the rights of workers and consumers by allowing them to seek justice in the courts (and court process is open and transparent, so all of the world can see and decide if claims and defenses are legal, valid and reasonable);
3. Protecting the intent of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, and more.
Let your elected officials know that the current state of the law in this country regarding mandatory arbitration needs significant change.


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Monday, June 10, 2013

REPOST: New York Post faces suit over Boston bomb article

This article talks about two men suing the New York Post for defamation and other damages.

***

Two men have filed suit against The New York Post, accusing the paper of invading their privacy and inflicting emotional distress by publishing an article that made them look as if they were suspected in the Boston Marathon bombings case.

Salaheddin Barhoum, 16, a high school sophomore, and Yassine Zaimi, 24, a part-time graduate student who works for a financial firm, visited the finish line of the Boston Marathon on April 15 carrying backpacks with running gear because they are both avid runners, according to the lawsuit, which was filed Wednesday in Suffolk Superior Court in Boston. The two men chatted with others watching the marathon and left two hours before the bombings took place, the suit says.

When Mr. Zaimi and Mr. Barhoum discovered their images were circulating on online sites like Reddit as possible suspects, they both visited local police stations to answer questions. Court papers said they were both told that they were not suspects.

On April 18, The New York Post published a front-page photograph of both men carrying backpacks under the headline “Bag Men,” followed by an inside article with two additional photographs of the men. When Mr. Zaimi went to work that morning, his office manager showed him the article and “he immediately started shaking, his mouth went dry, and he felt as though he was having a panic attack,” according to the suit.

Mr. Barhoum learned about the case when he returned home from a track meet that morning and found his home swarmed by reporters, according to the suit. When he saw the newspaper, Mr. Barhoum “became terrified, began to shake and sweat, and felt dizzy and nauseous,” the suit says.

Max Stern, Mr. Barhoum’s lawyer, said the experience had a debilitating impact. “Everything he has attempted has suffered for this experience that has really changed his life and really shook him to his core,” Mr. Stern said.

Suzanne Halpin, a spokeswoman for The New York Post, declined to comment on the lawsuit and referred, instead, to a statement the paper issued on April 18. At the time, Col Allen, editor in chief of The New York Post, wrote: “We stand by our story. The image was e-mailed to law enforcement agencies yesterday afternoon seeking information about these men, as our story reported. We did not identify them as suspects.”

Mr. Stern said that his client never received an apology from The New York Post. “They have been unrepentant,” he said.

The lawsuit, which also claims defamation, seeks unspecified compensatory damages and payment of the men’s legal fees.

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Sunday, June 9, 2013

REPOST: Learn the laws of the jungle for business startups

Creating a business is as complicated as maintaining it.  Here are some tips from Forbes to help you get started.  Read on: 


It’s a jungle out there. In 2012, total entrepreneurial activity in the United States hit its highest level since their survey started in 1999, according to Babson College. That’s the good news and the bad news. The opportunity for change is huge, with everyone taking a new look at the world after the recession, but the competition is also huge, since the cost of entry is at an all-time low.


Image Source: Forbes.com


In this context, it’s time for every business, not only startups, to take a fresh look at the basics of business success. Jamie Gerdsen, in his book of lessons on business change, creatively titled “Squirrels, Boats, and Thoroughbreds,” aims first at existing businesses, but I believe that most of his points, like his laws of the jungle, can be rewritten for startups, as follows:
  1. If you want to eat… I don’t believe in greed, but we all need to make enough money to eat. This means building a revenue stream, and tuning your business model to produce margins in the 50% range or above. I support being socially and environmentally conscious, but you can’t help anyone else if you don’t eat.
  2. If you want to survive… Survival means growth and scaling. Once you have a proven business model, you need to scale the business up quickly to stay ahead of competitors. These days, doubling your business volumes every year is the “norm” that investors and potential acquirers are looking for.
  3. If you want to be feared… Every startup needs a sustainable competitive advantage. In the jungle, it might be the strongest jaws, but in startups it’s more likely the strongest intellectual property. With no competitive advantage, startups with new ideas gaining traction are never feared, and are usually eaten for lunch as sleeping giants wake up.
  4. If you want to mate… In the business world, we call this finding the right strategic alliances. That means you have to stand out above the crowd, and aggressively pursue those candidates that can help you breed even more presence and power in the marketplace. Sitting quietly on the sidelines, waiting to be found, is a lonely world.
Every startup in the business jungle begins with a limited amount of three precious commodities – time, talent, and treasures. The smart ones have a plan for how they intend to spend these resources, and measure themselves against the plan. Otherwise they will likely look back later, and find that one or more of the laws of the jungle have been compromised:
  • Time – Start with a timeline of how much runway you have, with objectives and milestones mapped against the timeline. Time management is an art. Don’t waste precious time on the “crisis of the day,” in favor of strategically critical tasks. The best entrepreneurs work on making better time management a top objective.
  • Talent – Every startup needs talents to give the company value. In the beginning, the entrepreneur has to cover all talents, which is made more possible these days by the wealth of information available on the Internet, as well as books and online courses. Talent can also be outsourced, but surviving in the business jungle without talent is unlikely.
  • Treasure – Most entrepreneurs assume that treasure means funding. In reality, more important treasures often include intellectual property, the ability to innovate, and well-defined processes that can deliver great products and reach new customers more efficiently and effectively than competitors. Money is no substitute for these other treasures.
In summary, whether you are running a startup, a family business, or a famous brand like IBM, you are all part of the jungle. You can be a small tiger with big teeth, or an aging dinosaur. The laws of the jungle apply to all. It really is a world of survival for the fittest.
The jungle framework is a great one to set the right perspective. Startups which prosper and succeed learn the rules of the jungle early, don’t make excuses, and don’t look for any entitlements. Does your startup have an understanding of reality, a real sense of urgency, and the overwhelming drive to innovation to make you the king of the jungle any time soon?


Atty. Evan Granowitz focuses on practice areas, like business torts, bankruptcy, and breach of contract disputes.  Access this Facebook page for more information.

Tuesday, June 4, 2013

Freelance trouble: Legalities of hiring freelancers

Image Source: freelanceshow.com


It’s a trend that’s becoming more pronounced: As hired labor becomes more expensive, many small businesses are relying on freelancers for a large portion of their business processes. Regardless of location—whether in cloud or just within the locality—freelancers provide expert services on a project-based payment basis, even at short notice. This “on-demand access” advantage provides many starting companies with the needed flexibility to manage their expenditures, resulting to less costs and overhead, and ultimately, yielding the expected returns sans the additional burden (i.e., paying for employees’ income taxes, social security, Medicare, etc.) of holding regular employees.

But with all the advantages of hiring freelancers come counterpoising disadvantages—and in most cases, even well-intentioned employers find themselves having some brushes with employment laws.



Image Source: freelance.com


The legalities of hiring freelancers (also commonly known as “independent contractors”) remain shady, most probably because there are still no arbitrary criteria on qualifying someone to be a freelancer. In general, however, the classification stems on how much control the employer exerts over the contractor. As opposed to employees that perform duties under other people’s supervision and work only for one employer, independent contractors operate under a separate business name, keep invoice for work done, and perform work for more than one client.

The most common problem that employers encounter in hiring freelancers is the possible misclassification of workers. When the government is able to detect the misclassification of independent contractors, employers may be required “to pay back taxes and penalties for federal and state income taxes, social security, Medicare and unemployment,” not to mention the legal ramifications subsequent to these consequences.



Image Source: blasho.com


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Sunday, June 2, 2013

NYC for gender parity: Topless women are good citizens

Image Source: torontosun.com


In most parts of the world, toplessness in women is only allowed by norms in the conduct of breastfeeding. In the US, as a matter of fact, toplessness during breastfeeding is supported by federal laws to cater to the rights of women to breastfeed their child anywhere they want. 

But in many places, that’s about as far as it could go in terms of walking around half naked. In some states, authorities can legally detain topless women in public for public lewdness, indecent exposure, or disorderly conduct—misdemeanors at most but legal offenses nonetheless. This has been deemed unfair and discriminatory by gender equality advocates who claim that this is a clear deterrent to achieving gender parity. 



Image Source: fastcoexist.com


In this regard, New York begs to differ.

Thanks to a legislation which nullifies the criminalization of toplessness, women in New York can walk around in public bare-breasted and not be held for any kind of misdemeanor. Since 1992, the city government has been strictly upholding this law, instructing its police force to lay their hands off any woman who is seen without upper body clothing in any part of the city.

Public sentiment has been divided on this movement, with some calling it an extreme form of liberalism which is degrading to women at the least. But with increasing awareness for gender equality across America, having the law recognize women’s right for physical freedom is an early step toward completely eradicating gender bias which continues to pervade the society. 



Image Source: forums.hardwarezone.com.sg


Atty. Evan Granowitz, a litigator at Wolf Group LA, is a recognized member of the Orange County Bar Association. Get to know more about him by visiting this Facebook page.

Wednesday, May 29, 2013

REPOST: A Law That Keeps Gun Makers Smiling


This New York Times article reports the constitutionality of the Protection of Lawful Commerce in Arms Act - a law that grants a special shield around the gun manufacturers.


A line of tobacco executives stood in Congress one day in 1994 with their right hands raised, just before they swore, one by one, that they did not believe nicotine was addictive.

They looked miserable: within a few years, their companies would be paying out hundreds of billions in damages for the illnesses caused by smoking.

For happier faces, you could look at a picture taken in the Oval Office when President George W. Bush signed a bill in 2005. Surrounded by beaming gun manufacturers, Mr. Bush put the final touch — his signature — on a piece of legislation that would make it very difficult for anyone hurt by gun violence to sue the makers for injuries.

And why wouldn’t they be smiling?

The law signed that day, the Protection of Lawful Commerce in Arms Act, has smothered lawsuits by cities around the country, including by New York, that sought to force manufacturers to be more careful in how they sold and distributed guns.

Under President Obama, the Justice Department has continued to line up with gun manufacturers to defend the constitutionality of the law.

Last year, a state court threw out a lawsuit by Daniel Williams, of Buffalo, who, as a high school junior, was mistaken for a gang member and shot by a Saturday-night special — a Hi-Point 9-millimeter semiautomatic pistol, manufactured by the thousands by Beemiller Inc. of Ohio.

The sole distributor of the Hi-Point, a man named Charles Brown of MKS Supply, “has sold at least 630 handguns traced to crime in the State of New York,” according to the lawsuit.

Like many others in the manufacture and distribution of guns, Mr. Brown has shown little curiosity about how the weapons were used. An article in The New York Times on Tuesday reported that numerous gun executives stated during sworn depositions that it was not important for them to keep track of how often their guns were used in crimes.

For instance, Mr. Brown said that he never examined the “trace” requests that came from law enforcement to see which of the companies that he supplied were, in turn, selling guns that ended up being used in crimes.

Time after time, the executives said they were not concerned with finding out what happened to the guns.

All these statements were made in lawsuits brought before the 2005 law put up a special shield around the gun manufacturers. The law grants an exception for manufacturers or distributors who are accused of having knowingly violated state or federal laws. Because of that exception, a state appellate court in October restored the suit brought by Mr. Williams against Hi-Point, Beemiller, MKS Supply and others. (The owner of Beemiller, Tom Deeb, has said that law enforcement authorities have recognized him for the special help he has given in investigations.)

The Williams lawsuit is one of very few cases not eliminated by the law.

Before the law’s passage, a federal judge in Brooklyn hearing a case brought by the N.A.A.C.P. found that gun manufacturers and distributors were not doing simple things that would reduce the number of weapons available to criminals. As examples of what could be done, wrote the judge, Jack B. Weinstein, manufacturers could only allow their products to be distributed to retailers who had actual storefronts, carried insurance, keep a minimum inventory, and allow the manufacturers to review their books.

Such measures would not restrict any Second Amendment rights, the judge ruled, and the evidence showed that “more prudent and easily available merchandising practices on the part of the defendants would have saved many lives in the past — and would save many in the future.”

Why weren’t these steps being taken?

“Some members of the industry believe that unified, well-organized voluntary attempt to limit diversion of guns to criminals would be the equivalent of a public recognition of failures to take such steps in the past,” Judge Weinstein wrote, “with an implied responsibility for thousands of avoidable deaths.”

What to make of the Department of Justice under President Obama? “We hope they will change their view on the constitutionality of a federal law that effectively rewrites state’s civil justice laws to protect one industry,” said Jonathan Lowy, a lawyer with the Brady Center who has brought many cases against gun manufacturers.

Allison Price, a spokeswoman for the Justice Department, said: “We continue to defend the constitutionality of this law. While the Newtown tragedy does not alter the department’s view regarding the constitutionality of the statute, it does underscore the need for new gun legislation, as the president and attorney general have said.”

The gun makers can still smile about the 2005 law.

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