Graffiti: Legal or Illegal?

In the rapidly changing world of Intellectual Property Law, street art protection is less commonly discussed than that of other innovative creations. Street art is somewhat ambiguous in its meaning. It is common to associate street art with the graffiti spray-painted tags on a building or subway. However, actual street art is something created with more depth. Legally, the distinction between permanent graffiti and art is permission. Street art becomes vandalism when that permission to publicly paint is not granted.[1] Because of the complexity of public art, the amount of protection warranted to street art is unclear. Graffiti law is not yet a legal practice; however, graffiti-related disputes have been stirring across the country.[2]

In a case close to home, 5Pointz graffiti curators have been wrestling with building owners over their famous murals being torn down without notice in Long Island City, New York.[3] 5Pointz, the outdoor art exhibition once praised as an international “graffiti mecca,” is undergoing construction as it transforms into two residential high-rises with luxury apartments.[4] Strikingly, the apartments will keep the 5Pointz name. The newly constructed buildings will showcase street art-style decorations in memory of the destroyed exhibit, much to the dismay of original 5Pointz artists. The building may even display replicas of 5Pointz if the artists grant permission. That may be unlikely, though, considering their adversarial stance against the building owners.

Christopher Wallace, Biggy, BIG, Notorious BIG — The “RIP wall” at 5Pointz in Queens, NY paid tribute to lost iconic figures, like Notorious B.I.G.

graffiti art — 5Pointz name behind the reception desk of the new luxury apartment building

The legacy of 5Pointz began with curator Jonathan Cohen in the early 1990s.[5] Nearly three decades ago, the site was merely made up of unused artist studios. So, Cohen asked the building’s owners, Jerry and David Wilkoff, for permission to paint on the walls of the buildings.[6] After agreeing to the artist’s use, Cohen went to work and, over time, local and international artists joined him, turning the buildings into the colorful outdoor art exhibit it came to be known as over time.[7]

The 5Pointz graffiti mecca stood tall and colorful before its demolition

The building owners were issued a permit on August 21, 2013 by the City Planning Commission to convert the 5Pointz buildings into high rise apartments. On October 10, 2013, Cohen and other aerosol artists sued the owners of the buildings that housed 5Pointz to prevent their works’ destruction, asserting VARA (Visual Artists Rights Act) and common law tort claims in the Eastern District Court of New York. In the case of Cohen, et al. v. G&M Realty, L.P., the court denied the artists’ request for injunctive relief.[8] Despite the suit, the 5Pointz artwork were quickly whitewashed in one night, erasing all artwork to allegedly prevent the property from being able to claim landmark status. The artists accused the owners of deliberately whitewashing the art so rapidly in an attempt to sabotage their plan to get the building landmarked because they had already prepared over 20,000 landmark forms for submission to the Landmarks Commission that were collected during a rally several days before the destruction. The stigma behind graffiti being an act of vandalism is blurred when building owners consent to having street art on their property, and then forcefully remove it without giving the artists an opportunity to preserve their work.

Twenty-three artists had accused Jerry Wilkoff of removing the murals without giving the artists a fair opportunity to remove and preserve their work, or even the minimum notice required by law.[9] In March 31, 2017, Senior District Judge Frederic Block ruled against the real estate developers, who made a motion to dismiss the artists’ third and final complaint. Judge Bloc stated that: “For VARA, the plaintiffs would have no right to prevent 5Pointz’s destruction by its rightful and legal owner; hence, the plaintiffs’ “moral rights” to prevent another’s disposition of his property arise purely under VARA. Because the plaintiffs’ conversion and property damage claims wholly depend on the viability of their VARA claim, the Court finds them to be fully preempted.”[10] This significant legal victory for the artists is meaningful for the entire art community because the judge is allowing the case to go in front of a jury who may be more sympathetic to the wronged artists than to the real estate owners and developers.[11]

Cohen and his fellow artists asserted that their street art is protected under VARA, a federal act that grants visual artists limited rights over visual works of art they created but do not own, and thus they are entitled to monetary damages for the destruction of their visual works of art.[12] VARA offers limited protections to only visual works of art. A “work of visual art” is:

(1) a painting, drawing, print, or sculpture, existing in a single copy, in a limited edition of 200 copies or fewer that are signed and consecutively numbered by the author, or, in the case of a sculpture, in multiple cast, carved, or fabricated sculptures of 200 or fewer that are consecutively numbered by the author and bear the signature or other identifying mark of the author.[13]

Evidently, the 5Pointz street art exhibition can be classified as a visual work of art because the murals were spray painted at the site and signed by the artists, and Judge Frederic Block agreed. The developers unsuccessfully argued that the rights warranted by VARA were “narrow and inapplicable given that, while the artists are well-known, the works are not.”

The judge ruled that the evidence provided by both developers and artists on VARA claims were sufficient to allow this case before a jury. VARA states:

(a) Rights of Attribution and Integrity.—Subject to section 107 and independent of the exclusive rights provided in section 106, the author of a work of visual art—

(1) shall have the right—

(A) to claim authorship of that work…

(3) subject to the limitations set forth in section 113(d), shall have the right—

(A) to prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and any intentional distortion, mutilation, or modification of that work is a violation of that right, and

(B) to prevent any destruction of a work of recognized stature, and any intentional or grossly negligent destruction of that work is a violation of that right.

(b) Scope and Exercise of Rights.—

Only the author of a work of visual art has the rights conferred by subsection (a) in that work, whether or not the author is the copyright owner. The authors of a joint work of visual art are co-owners of the rights conferred by subsection (a) in that work.

(1) The modification of a work of visual art which is a result of the passage of time or the inherent nature of the materials is not a distortion, mutilation, or other modification described in subsection (a)(3)(A).

(2) The modification of a work of visual art which is the result of conservation, or of the public presentation, including lighting and placement, of the work is not a destruction, distortion, mutilation, or other modification described in subsection (a)(3) unless the modification is caused by gross negligence.

(3) The rights described in paragraphs (1) and (2) of subsection (a) shall not apply to any reproduction, depiction, portrayal, or other use of a work in, upon, or in any connection with any item described in subparagraph (A) or (B) of the definition of “work of visual art” in section 101, and any such reproduction, depiction, portrayal, or other use of a work is not a destruction, distortion, mutilation, or other modification described in paragraph (3) of subsection (a).

(d) Duration of Rights.—

(1) With respect to works of visual art created on or after the effective date set forth in section 610(a) of the Visual Artists Rights Act of 1990, the rights conferred by subsection (a) shall endure for a term consisting of the life of the author.

(e) Transfer and Waiver.—

(1) The rights conferred by subsection (a) may not be transferred, but those rights may be waived if the author expressly agrees to such waiver in a written instrument signed by the author…[14]

Interestingly, real estate and copyright law seem to intersect where VARA applies, and so real estate owners, like those of the 5Pointz site, need to be aware of its protections. Title 17 of the United States Code, Section 106A(a)(1)(B)(3)(A) provides that the author of a visual art has the right to prevent intentional mutilation of a work, and any such mutilation is a violation of that right. Undoubtedly, the developers have violated the artists’ VARA-granted right. None of the statutory exceptions apply to the developers. The works were not naturally distorted over time or modified for improvement. Furthermore, 5Pointz comprised of original visual works based on each artist’s own perception; they were not reproductions or depictions of other works, so the third exception does not apply either. VARA grants visual artists these rights for the duration of the artist’s life, unless that right has been waived in a written instrument and signed by the artist, and there is no evidence of such waiver by the artists here.

While some perceived Judge Block’s ruling against the developers as an “unexpected turn” for the graffiti artists, it’s almost clear-cut that VARA is written in the artists’ favor. Despite the undefined realm of graffiti law, VARA is not so ambiguous as to the protections it warrants; nonetheless, it is narrowly construed. With the support of articles on 5Pointz, corporate and worldwide recognition, and “aerosol art” experts’ testimonies, it seems quite feasible that a jury will sympathize with the 5Pointz artists who, with the permission of the owners, worked on the demolished buildings. In the meantime, the art world awaits and anticipates the trial that turn out to be a landmark case for street artists in need of protection for their recognized works.

—

[1] Nicole Martinez, Street Art or Vandalism? Art Law Journal (2017).

[2] Marie-Andree Weiss, “Spray” the Word: Graffiti Law is a New Legal Niche, The 1709 Blog (2016), http://the1709blog.blogspot.com/2016/11/spray-word-graffiti-law-is-new-legal.html (last visited Aug. 4, 2017).

[3] Claire Voon, A Glimpse Inside the Street Art–Themed 5Pointz Condos, Hyperallergic (2017), https://hyperallergic.com/386244/a-glimpse-inside-the-street-art-themed-5pointz-condos (last visited Aug. 4, 2017).

[4] Corey Kilgannon, 5Pointz Graffiti Artists Whose Works Were Erased Will Get Day in Court, The New York Times (2017), https://www.nytimes.com/2017/04/09/nyregion/5pointz-graffiti-artists-whose-works-were-erased-will-get-day-in-court.html (last visited Aug. 4, 2017).

[5] Bruce Wallace, Remembering 5Pointz: A Five-Story Building That Told Plenty More, NPR (2013), http://www.npr.org/2013/11/21/246549375/remembering-5pointz-a-five-story-building-that-told-plenty-more (last visited Aug. 4, 2017).

[6] Jessica Meiselman, 5 Pointz Graffiti Artists Score Major Win in Suit against Developers, Artsy (2017), https://www.artsy.net/article/artsy-editorial-5-pointz-graffiti-artists-score-major-win-suit-developers (last visited Aug. 4, 2017).

[7] Leonard Greene, Two high-rise towers will pay homage to graffiti mecca 5Pointz, NY Daily News (2017), http://www.nydailynews.com/new-york/high-rise-towers-pay-homage-graffiti-mecca-5pointz-article-1.3207741 (last visited Aug. 4, 2017).

[8] See Cohen v. G & M Realty L.P., 988 F. Supp. 2d 212 (E.D.N.Y. 2013).

[9] Laurel Babcock & Bob Fredericks, Graffiti mecca 5 Pointz erased overnight, New York Post (2013), http://nypost.com/2013/11/19/5-pointz-graffiti-erased-in-overnight-paint-job/ (last visited Aug. 4, 2017).

[10] Cohen v. G&M REALTY LP, Case No. 13-CV-05612 (FB) (RLM) (E.D.N.Y. Mar. 31, 2017), https://scholar.google.com/scholar_case?case=13462150384806350539&q=COHEN+V.+G%26M+REALTY+L.P.&hl=en&as_sdt=3,33&as_vis=1 (last visited Aug 24, 2017).

[11] Corey Kilgannon, 5Pointz Graffiti Artists Whose Works Were Erased Will Get Day in Court, The New York Times (2017), https://www.nytimes.com/2017/04/09/nyregion/5pointz-graffiti-artists-whose-works-were-erased-will-get-day-in-court.html (last visited Aug. 4, 2017).

[12] Cohen v. G&M REALTY LP, Case No. 13-CV-05612 (FB) (RLM) (E.D.N.Y. Mar. 31, 2017), https://scholar.google.com/scholar_case?case=13462150384806350539&q=COHEN+V.+G%26M+REALTY+L.P.&hl=en&as_sdt=3,33&as_vis=1 (last visited Aug. 24, 2017).

[13] See 17 U.S.C. § 101 (1994).

[14] Id.

Intellectual Property Implications for the Booming E-sports Industry

The term e-sports is short for electronic sports and has come to be associated with describing video games competitions. Much like traditional sports, there are amateur and professional scenes for the sports in question. There are also teams and contracts, leagues, and sponsorships. However, e-sports are very early in their lifespan and thus the infrastructure is not as well developed as traditional sports in many ways. Visas, for example, are routinely denied to competitors to go to events because they do not fit the traditional definition of an athlete or businessman. Specific contracts between players and teams are kept secret with unethical strategies being used. The basic terms of these contracts also are slanted heavily in favor of the organization, with players unable to argue for better conditions. Many of these issues do not exist for traditional sports; contracts in the NFL for example are highly regulated, teams must abide by clearly defined rules, (including forced buyouts in the NBA, such as what happened to the L.A. Clippers) and rarely are athletes denied visas to compete.

This lack of infrastructure, direct precedent, and general lack of legal knowledge on both the parts of players, organizations, and to an extent the companies, is likely the cause behind all of the issues that exist in the e-sports scene. It must be stressed that there is very little scholarly research done about e-sports, even less so in legal scholarship. For many of the issues discussed in this blog post, very few have any research of any sort conducted and most of the sources will be press articles that are not peer-reviewed or under any formal scrutiny. In this sense, the issue of lack of infrastructure also extends to the scholarship itself. This blog post seeks to be an introduction to the field of exports, while highlighting some potential issues that may exist in the field regarding copyright and trademarks.

E-sports has been growing year after year in its size and has never been bigger. In terms of viewership the largest e-sports event of 2015 was the League of Legends LCS 2016 with over 43 million unique viewers and a peak of 14 million concurrent viewers worldwide. The prize-pool for the event was $6.7 million USD. The second largest event, called the International 2016, an e-sports event featuring the game DotA 2, had a peak viewership of 8 million and an $20 million USD prize pool. Championships matches for LCS and the International have filled up entire sports stadiums and smaller events still are able to occupy large convention spaces. These statistics are not very surprising in light of the fact that over 150 million Americans play video games, with more than half of all households owning some sort of dedicated games console and 40% of Americans responding that they play three hours or more of video games each week. Of course, these statistics are not directly translatable to e-sports because the study did not specify between e-sports titles and non-e-sports titles. The study for instance, did not differentiate between individuals who played video games on mobile devices (phones, tablets) as opposed to traditional gaming devices (portable, home, personal computer). Of the largest e-sports titles in terms of revenue, sponsorship, and prize money, the vast majority of them are only available on personal computer (League of Legends, DotA 2, Starcraft II, Counter-Strike Global Offensive are all personal computer exclusive games), so it stands to reason that there may not be direct correlation between the figures.

Nevertheless, the size of the e-sports industry is hard to deny, even when it is evaluated separately from the gaming industry as a whole. According to SuperData research, the e-sports industry generates around $748 million USD in sponsorships, pro-players, ticket sales, gambling, merchandising, ticket sales, and other direct revenue. This figure does not include game sales, sales of downloadable content, or microtransactions; (in game payments which can offer direct benefits ingame, most often in mobile games such as the ability to purchase extra plays in Candy Crush) it only looks at the revenue that e-sports directly generates through competitions).

Unlike traditional sports, e-sports themselves are software that some entity has copyright control over. No individual or entity owns football for instance, so theoretically one could organize a football tournament and no one could stop the tournament on the basis of the organizers not having the rights to the game. Originally, Blizzard Entertainment (the creators of Starcraft) found it more difficult to restrict Korean broadcasting of games and tournaments. When the successor to Starcraft, Starcraft 2 was released, the game could not be played without a direct connection to Blizzard, thus allowing Blizzard to control licensing more directly. This mistake has not been repeated by League of Legends, in which the game cannot be played offline and thus allowing for Riot to have complete control over the game. Interestingly enough, both Counter-Strike Global Offensive and DotA 2 can be played on local area network (allowing for non-internet multiplayer gameplay on multiple computers) and are both owned by Valve Entertainment. However, this likely ties into Valve’s business strategy with these two games, which relies heavily on community generated content and will be detailed later in the paper.

Proprietary control is very important when it comes to e-sports. Many gaming companies have learned from the mistakes of Blizzard Entertainment, who was unable to control KESPA (Korean Esports Association, which was responsible for organizing pro players, granting licenses, scheduling showtimes on Korean television, etc.) for many years and as a result did not receive a portion of the direct revenue generated from the e-sports scene for Starcraft Brood War. For the most part, now all of the largest tournaments are sponsored and funded by the companies themselves. The International is funded by Valve, LCS is funded by Riot, Starcraft II is funded by Blizzard and they sublease broadcasting rights to several different Korean companies. Nearly all of these games have their largest tournaments broadcast on Twitch.tv, an online streaming website that allows for people to watch gameplay footage in real time. Because of the primarily online distribution of e-sports content (with the exception of South Korea) this furthermore allows the companies not to have to rely on other broadcasting companies to show their tournaments. Indeed, streaming has become so lucrative that YouTube is beginning to expand their streaming capabilities for games.

Blizzard and Kespa reaching - e-sports

(Blizzard and Kespa reaching an agreement regarding broadcasting rights)

Third party e-sports leagues are being brought into line, but instead of shutting them down they allow them to continue with a license. A great example of this happening occurred with the Super Smash Brothers community. In 2013, EVO was sent a cease and desist letter by a lawyer in Nintendo stating that they were not allowed to broadcast Super Smash Brother Melee. However, after online backlash, especially considering that Melee had been a staple at EVO for years, Nintendo reversed the decision. To this day, there are those who believe (like myself) that this decision was actually made in error, given that the decision was immediately reversed and no such decision was made before, there is a suspicion that the lawyer may simply have been new and didn’t know what he was doing. Regardless, after the EVO 2013 incident, Nintendo started to reach out to tournament organizers and sponsored them. In 2014 and 2015, Nintendo not only licensed broadcasting rights to MLG (Major League Gaming), EVO, APEX 2015 (the premier Smash tournament where all versions of the game are played) and many other leagues, but also sponsored the events, providing money, equipment, and promotion on their Twitter and Facebook pages.

complete sponsor list for EVO 2014 - e-sports

(complete sponsor list for EVO 2014)

Leasing and sponsoring the tournament also had other benefits for Nintendo. A fan-made modification to Super Smash Brothers Brawl, referred to as Project M, was very popular and featured in many tournaments. However, because Project M was not a Nintendo product, not only did they not receive money from it (it was a free download, but the makers received donations) but it also created a product that could potentially compete with their products. Many users online noted that when they played Smash 4 for the first time that the game felt similar to Project M. When Nintendo began to sponsor these tournaments, Project M disappeared from the event listings in its entirety, although this cannot be definitely linked to Nintendo, it is very likely that Project M’s omission was a stipulation by Nintendo for sponsorship. In 2015, the makers of Project M would cease their development of the mod in its entirety, the reason they claim was not because they were targeted by any legal action by Nintendo but rather because they saw it as a potential hurdle in the future and wished to avoid it.

Third party leagues are becoming more valuable as well, as their production companies, industry knowledge, and connections make them very valuable to both investors and gaming companies. It also allows for the company to have more control over their e-sports presence. In 2015, ESL (Electronics Sports League) was acquired by a Swedish Media company for $87 million USD, because the company saw the worth in the future. In 2016, MLG, (Major League Gaming) was purchased by Activision-Blizzard for a rumored $46 million USD in order to better promote their esports titles (which include Starcraft, Warcraft, Call of Duty, Heroes of the Storm, Hearthstone, etc.). By absorbing the league, it is able to better control the tournament. Another example would be in how Nintendo sponsors tournaments. At these tournaments, the traditional commercial break, where an ad would be run on the streaming website (usually Twitch.tv) was instead replaced with Nintendo commercials and promotions. For example, Nintendo brought a setup of the then-unreleased game Splatoon for attendees to play a demo of at Apex 2015. Greater company involvement and control allows for greater control of the message.

A potentially interesting issue that could have a large impact on the e-sports scene is the idea of copyrighting concepts and game mechanics. It is well established in copyright law that you cannot copyright archetypes and settings, for example while you can copyright Spiderman, you cannot copyright the idea of a superhero who has spider-based powers in New York City. Although untested in the realm of video games however, it seems that this principle also applies to game mechanics.

e-sports

(comparison of Dota 2 versus League of Legends)

The U.S. Copyright Office statement on this matter seems pretty succinct. The Office states that the “methods of playing a game” are unprotected according to the statement and “similar methods” may be used. (https://www.copyright.gov/fls/fl108.pdf) This is consistent with the history of several e-sports titles. An example that highlights this is the history of DotA, League of Legends, Heroes of Newerth, Heroes of the Storm, and SMITE. The original DotA was a fan modification for Warcraft III, developed by several enthusiasts. Over time, the developer split up to pursue their own projects. Guinsoo, one of the original developers, would end up creating League of Legends and Icefrog, another original developer, would be hired by Valve to create DotA 2. Heroes of Newerth was a game that had similar game mechanics as the other two and also was derived from the original DotA. With the popularity of what was then called DotA-style games arising, other companies jumped into the mix, Blizzard created a game known as Blizzard DotA, and Hi-Rez studios created SMITE. All of these games retained elements from DotA, for example leveling, three lanes, items, 5 versus 5 games, etc. However, even though these games all derived heavily from the same source and were very mechanically similar, there were very few legal problems between all of these companies.

In fact, the only lawsuit filed within the realm of DotA-style games was filed for trademark reasons, not copyright. Blizzard, the owner of Warcraft III which is the game the original DotA was derived from, claimed that Valve could not commercialize the name because it belonged to the Blizzard community and would create confusion as to if DotA 2 was a Blizzard product. The end result was that Blizzard conceded the rights to commercially use DotA to Valve while Valve conceded that non-commercial work (the original DotA for instance) could use the DotA name freely. To that end, Blizzard changed the name of their game from Blizzard Dota to Blizzard All Stars, and the final name for the game was Heroes of the Storm.

As the newest medium to express creative ideas, video games have a long ways to go before significant legal findings are made about it. And as far as e-sport goes, there will be a long time before the legal issue present within the field get any significant attention by legal scholars…certainly when more money is involved. While it is true that the entirety of e-sports revenue generated worldwide is larger than that of the NBA, the field still needs more time to expand its audience beyond those who play video games and attract those who also do not. In the meantime however, familiarizing oneself with the history and potential legal issues of e-sports will help any lawyer who wishes to get into video games related litigation in the future. Video games are the next big frontier.

Although many legal issues, especially with e-sports, will be familiar to lawyers who are otherwise unfamiliar with video games (for example, players contracts or trademark law) there are many more potential issues that are unexplored and have potentially large ramifications. Intellectual property (IP) lawyers will be at the forefront of this effort, as they are best suited for interpreting older statutes that never had video games in mind when they were written to be applied towards video games. Already there is a growing number of lawyers involved in video games, whether it is the popular Video Games Attorney who gained notoriety by helping smaller studios sue larger companies or the legal divisions of Activision-Blizzard and other large companies. Navigating this unknown frontier of IP law requires the guidance of an experienced IP attorney.

For more information please visit our site: https://sewellnylaw.com/intellectual-property

Demonstrative evidence: friend or foe?

A jury’s job throughout a trial is to comprehend, understand and process all of the information conveyed by both the attorneys and witnesses. Plainly hearing this information without any form of aids (e.g., picture, graphs, physical objects, etc.) can lead to forgetfulness when it comes time for deliberations. That is why it has been common practice in the trial world to use evidence to help these juries pair aids with facts throughout a trial. Lawyers are afforded the ability to use demonstrative and substantive evidence throughout the presentation of their case: both to simplify information and make it more memorable. Demonstrative evidence is used to give the jury a chance to experience the issues and facts of a case in the eyes of the presenting party. The main purpose of demonstrative evidence is to make the jury believe that your theory of the case is the one that should prevail.

What is Demonstrative Evidence?

There are three general categories of evidence recognized in trial practice: real, testimonial and demonstrative. For the purposes of this article, demonstrative and real evidence are the focus. Real evidence is considered evidence that was actually involved in the case at trial. For example, the gun that was used to commit an alleged murder, or the defective part of a product being questioned in a liability case would be considered substantive evidence. Demonstrative evidence on the other hand, is used purely to enhance oral testimony. Unlike real evidence, this type of evidence has no independent probative value because it had no part in the actual events of the case. Demonstrative evidence is solely used to help the jury understand one’s theory of the case at hand. Distinctive from substantive evidence, this type of evidence can be anything you can touch, see or hear as long as it was created for the purposes of litigation. For example, the gun that was used to commit an alleged murder, mentioned above is substantive evidence, but a computer generated image of that gun or an exact replica of that gun, used for the purpose of making the jury better understand is demonstrative. The most important distinction between real and demonstrative evidence is that real evidence can be taken into the jury room during their deliberations, while demonstrative evidence most certainly cannot. The only relevance demonstrative evidence has to a case is to help explain the facts, and to help give a witness’s testimony greater probative value. This kind of evidence does not have any independent relevance outside of that.

Demonstrative evidence, jury trial

How is Demonstrative Evidence Admissible?

If demonstrative evidence has no independent probative value, and no objective relevance to the case, then we must wonder what rationale the courts could have for this evidence to be admissible. That answer is simple, it makes the trial easier and more entertaining for the jury to follow. It makes listening to the potentially boring and confusing testimony of multiple witnesses less boring and less confusing, thus ultimately more believable. As McCormick put it:

“Since ‘seeing is believing’, and demonstrative evidence appeals directly to the senses of the trier of fact, it is today universally felt that this kind of evidence possess an immediacy and reality which endow it with particularly persuasive effect.” [1] McCormick On Evidence §212 (E. Cleary 2d ed. 1981).

Demonstrative evidence is not automatically admissible however. The same rules of evidence that are followed to bring in substantive evidence must also be followed to bring in demonstrative evidence. The trial judge does however have immense amounts of discretion when it comes to admissibility. These requirements involve a showing of relevancy to the facts at issue and the laying of a proper foundation once the evidence is deemed relevant. To do this an attorney must show that the demonstrative evidence will be used for the purpose of either educating, simplifying or informing the jury. Both the relevancy and foundational requirements are usually met through the testimony of the witness the demonstrative evidence is meant to enhance. Because demonstrative evidence is supposed to explain a witness’s testimony, their testimony alone would bring out the relevancy. The witness can then be asked questions throughout the course of their testimony that will authenticate and therefor lay the foundation for the evidence. The main difference between the admission of demonstrative evidence in comparison to substantive evidence is that substantive evidence is required to be introduced and admitted into evidence before it can be referred to at trial. Demonstrative evidence can be displayed and referred to without being formally admitted. Although that is not suggested because then the evidence is not part of the record, and cannot be referred to on appeal.

While the requirements for admissibility of demonstrative evidence are not hard to meet the trial judge must still use a balancing test to determine whether the evidence can be used at trial. Just as with any other kind of evidence the judge must weigh the probative effect the evidence can have on explain the case against the prejudicial effect that this evidence could potentially have on the defendant. A popular example of this would be pictures of a crime scene or dead body after a murder. If the pictures are just being used to enhance the jury’s understanding of the case a judge will most likely say they are too prejudicial. However, if these pictures add something to the case, such as clarifying a dispute of the angle a person was shot, a judge would most likely conclude that the probative value outweighed the prejudicial one.

Is Demonstrative Evidence more helpful or harmful?

In most cases demonstrative evidence is one of the most helpful tools in the litigation book. Why wouldn’t it be, when demonstrative evidences main purpose is to help enhance the understanding of all of the evidence being thrown at the jurors. Scientifically speaking it has been shown that using visual aids combined with oral testimony can increase retention and understanding by almost 65 percent,[2] and in the mind of a juror the use of demonstrative evidence allows for some excitement and dramatic effect in what they might otherwise consider a relatively boring day. One of the greatest reminders of how influential demonstrative evidence can be stems from the infamous O.J. Simpson murder trial. Some people say O.J. Simpson wasn’t convicted because of his race, and other say that a jury was never going to convict a man of his stature, but what lawyers saw was the effective use of demonstrative evidence. Clearly, we are talking about the image of O.J. Simpson standing in front of that jury and trying on a glove that was supposed to be the same size and brand as the glove he was wearing when he killed his ex-wife. The glove did not fit and therefore diminished the prosecution’s theory and enhanced the defense’s theory, in a highly dramatic way that the jury would remember when it began deliberations. So, can demonstrative evidence be a helpful courtroom tool? Of course; it can have a huge effect on enhancing the credibility of a witness or a jury’s perception of the theory of the case in general, but as always there is a down side to the use of demonstrative evidence as well.

O.J. Simpson, jury trial, evidence

When making the decision to bring in demonstrative evidence a lawyer must be very careful that the potential benefits outweigh the potential harms. As stated above the potential benefits could be immense, but so could the potential harms. For example, since the judge has an extremely broad discretion in deciding what demonstrative evidence is too prejudicial and what is admissible, the use of demonstrative evidence thus opens up the door to use as an issue on appeal.

An appeal relating to demonstrative evidence can be brought for a variety of reason. For instance, the demonstrative evidence could have been too prejudicial and therefore should not have been deemed admissible. Or the demonstrative evidence could have been used incorrectly and therefore produced an erroneous verdict. This can lead to retrials and reversals, which not only lengthens the trial process, but also adds to the courts already overflowing dockets. The 7^th Circuit Court of Appeals recently reversed the jury verdict in the case of Baugh v. Cuprum for this very reason. 730 F.3d 701 (2013). The case was reversed for improper use of demonstrative evidence, because the evidence was allowed into the jury room during deliberations. Erroneous use of demonstrative evidence can easily become a widespread and persistent problem, due to the ambiguity in the definition and instruction on the use of demonstrative evidence. The lack of uniformity throughout the court system can also add to this problem, because of the trial judge’s discretion pertaining to the ways in which demonstrative evidence can be used varies between circuits and therefore leads to inconsistent case results within the court system.

This leaves us with the question of whether demonstrative evidence should continue to be used in trial practice, and the answer is yes. While it is true that a lawyer opens the case up to greater chance of objections and reversal on appeal the helpfulness of the evidence outweighs that the potential negatives. Not only does it make a trial more interesting and more dramatic, but it also increases the likelihood that the jury pays better attention. It also helps the jury to actually understand the facts of the case, which can ultimately lead to more informed decision making. Although there can never be a guarantee that the jury will correctly apply the facts to the law and return with the right verdict, the effective and skilled use of demonstrative evidence during trial makes it more probable.

[1] Stephen P Lindsey, “Do You Hear What I Hear?” Why Demonstrative Evidence Makes a Difference, Fed. CJA Trial Skills Academy (2010).

[2] Karen D. Butera, Seeing Is Believing: A Practitioner’s Guide to the Admissibility of Demonstrative Computer Evidence, 46 Clev. St. L. Rev. 511, 513 (1998).

The Search For Equitable Remedies For Breach of Contract

by Augustus Balasubramaniam, Esq.

Contracts Overview

In New York, for a legally enforceable agreement to exist at contract, the Plaintiff must establish an offer, acceptance of that offer, consideration moving between the parties, mutual assent, and intent to be bound. See Kwalchuk v. Stroup, 61 A.D.3d 118, 121 (1^stDep’t 2009). An Offer is defined as “…the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it” (see Restatement (Second) of Contracts §24). “…(I)t must create a reasonable understanding in the offeree that the offeree has the power to create a contract by simply manifesting an assent to the offer…” See Dr. John E. Murray, Jr., Corbin on Contracts (Desk Edition 2015) § 1.05.[2] Acceptance of an Offer is a “…manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer…” See Restatement (Second) of Contracts §50 (1). Acceptance can be by performance or a promise to perform[1], if the offer invited such mode of acceptance. Acceptance must be a voluntary act on the part of the offeree. Consideration is the bargained for exchange moving between the parties.[2] Generally, in an arms length bargain, the Courts will not inquire into the adequacy of consideration[3]. However, the bargained for exchange must move between the parties simultaneously, meaning generally, consideration must not be something done in the past, or something the party is already legally obligated to do[4]. Lastly, for an enforceable agreement to exist, it must meet the requirements of the Statute of Frauds.[5]

Breach of Contract

A Breach of contract occurs, when performance of the contractual obligations is due, but one or more of the parties to that contract fails to perform their obligations. “…[A] contract is not breached until the time set for performance has expired…” See Cole v. Macklowe, 64 A.D.3d 480, 480 [1st Dep’t 2009]. Alternatively, anytime before performance is due, if a party makes a clear, and unambiguous statement of an intent not to perform, or from that party’s conduct, it can be reasonably deduced that the party does not intend to perform, there is anticipatory breach of the contract. The party to whom performance is due may have recourse to remedies at this point in time, not withstanding performance is due sometime in the future.[6]

Remedies

Generally, a party that suffers a loss due to a breach of contract may sue for remedies under law or equity. The most common type of remedy under the law would be damages. Providing it is foreseeable, the law will afford the aggrieved party monetary damages, the measure generally, being to put the aggrieved party in the position as if the contract had taken place. See Restatement (Second) of Contracts §§ 344-352 et al. If, on the other hand, the facts of the case dictate that damages are not feasible, equity may step in to afford what is known as an equitable remedy such as specific performance or injunction. This is especially so in real property contracts, or contracts where the subject matter of the contract is a unique good. It should be noted however that specific performance will not be available to compel individual performance of a contract due to constitutional issues that arises, specifically the 13^th Amendment of the U.S. Constitution, thus varying somewhat from other common law jurisdictions. See Vanderbilt University v. DiNardo, 174 F.3d 751 (6th Cir. 1999).

Equitable Remedies For Breach of Contract

Implications for Equitable Remedies in Day-to-Day Practice

It is not uncommon, when an attorney drafts a pleading for a breach of contract case, to see a wrongly chosen remedy, which sometimes could be fatal to the litigation at issue. It is essential therefore that attorneys ensure the remedy chosen fit the elements of the remedy they seek, and which in turn applies to the facts of the case. This is especially true when attorneys are faced with a situation in their clients’ cases where there is no clear remedy in law. Courts are varied in their approach to the grant of equitable remedies for breach of contract. While, generally, it could be agreed the courts will look at ‘all the circumstances of the case’, and if it is ‘just and equitable’ to grant equitable relief in the case, what that means in practice will vary greatly. Drafters of contracts include what is known as “equitable relief clauses” in contracts in the hopes, at least to some extent, to try to limit the uncertainty surrounding the grant of equitable relief by the courts. Some jurisdictions such as Delaware, interpret equitable relief clauses in contracts as giving rise to a presumption of irreparable harm, a factor to be established by the plaintiff in order to succeed in getting equitable relief from the courts. See Gildor v. Optical Sols., Inc., No. 1416-N, 2006 WL 4782348 (Del. Ch. June 5, 2006). Other jurisdictions, including The Federal Courts, on the other hand, place very little-to-no weight to these equitable relief clauses in contracts. See La Jolla Cove Inv’rs, Inc. v. GoConnect Ltd., No. 11CV1907 JLS JMA, 2012 WL 1580995 (S.D. Cal. May 4, 2012). See also Smith, Bucklin & Assocs., Inc. v. Sonntag, 83 F.3d 476, 478 (D.C. Cir. 1996). Our own courts here in New York have taken the middle ground in cases that have come before them in relation to the equitable relief clauses in contracts. The courts have shown willingness to consider the existence of the said clauses in their overall analysis of whether equitable relief should be granted. See Imprimis Investors LLC v. Indus. Imaging Corp., QDS 22701503, 2008 N.Y. Misc. LEXIS 7384, at *16–17 (N.Y. Sup. Ct. Sept. 7, 2008). See also Gramercy Warehouse Funding I LLC v. Colfin JIH Funding LLC, No. 11 CIV. 9715 KBF, 2012 WL 75431 (S.D.N.Y. Jan. 6, 2012).

Is breach of contract illegal?

Breach of contract itself, per se, is not illegal in New York. A breach of contract occurs when one party fails to fulfill their obligations under a legally binding agreement without a valid excuse. However, when a breach of contract happens, the non-breaching party has legal remedies available to them. They can sue the breaching party for damages, specific performance (forcing the breaching party to fulfill their obligations), or other appropriate remedies as specified in the contract or allowed by law. Legal consequences arise from the failure to fulfill contractual obligations, rather than the breach itself being illegal. It’s important to consult with a qualified attorney for specific legal advice related to contract disputes in New York or any other jurisdiction.

Bottom line is, when dealing with breach of contract cases seeking equitable relief; it is prudent for the practitioner to ensure airtight arguments to further their client’s case. The old English saying from some 350 years ago, which articulated a common complaint amongst the legal practitioners of yesteryear, to some extent, holds true even today…‘Equity is a roguish thing. For Law we have a measure, know what to trust to; Equity is according to the conscience of him that is Chancellor, and as that is larger or narrower, so is Equity. ‘T is all one as if they should make the standard for the measure we call a “foot” a Chancellor’s foot; what an uncertain measure would this be! One Chancellor has a long foot, another a short foot, a third an indifferent foot. ‘T is the same thing in the Chancellor’s conscience. See Edward Fry, Life of John Selden, in “Table Talk of John Selden” (Fredrik Pollock edition, 1927) at page 177.

[1] See Restatement (Second) Contracts §§50 (2), (3), 53-54.

[2] See Restatement (Second) Contracts §71.

[3] See Moezinia v. Ashkenazi, 136 A.D.3d 988 [2d Dep’t 2016].

[4] See Braka v. Travel Assistance Intern., 25 A.D.3d 456 [1st Dep’t 2006].

[5] Contracts for goods of $500 and more are covered by the Uniform Commercial Code which mirrors the Statute of fraud provisions.

[6] See O’Connor v. Sleasman, 37 A.D.3d 954, 956 [3d Dep’t 2007].

Commercial Lease Parties Beware: Lessons from Tarrytown

by Andrew Fine, JD (NYS Bar admission pending; firm alumnus)

Through a recent appellate court decision, New Yorkers were gravely reminded that the age-old commercial concept of “caveat emptor” – which is Latin for “buyer beware” – applies with equal force to those seeking commercial leases. Due diligence and factual investigation, it appears, are burdens naturally imposed on buyers and lessees alike.

On September 14, 2016, the Second Department of the New York Supreme Court, Appellate Division, decided 1357 Tarrytown Road Auto, LLC v. Granite Properties, LLC.[1] In this case, the plaintiff was a company that operated an automobile dealership (hereinafter, “Tarrytown”) which sought to expand its business by leasing additional property from the defendant (hereinafter, the “Landlord”) in the Town of Greenburgh, New York. After negotiation, the two parties entered into an agreement whereby the Landlord assigned an existing lease to Tarrytown. The agreement was finalized in July of 2013.

For the next two months, it was business as usual. In September, 2013, however, Tarrytown discovered that local law prohibited vehicles without license plates from parking on the leased premises (hereinafter, the “local ordinance”). Because Tarrytown intended to operate an automobile dealership on the premises, this local ordinance presented an unwelcome surprise as well as a serious obstacle. Tarrytown argued that the practice of parking cars without license plates on a dealership lot was “essential to the business of selling automobiles.”[2] Indeed, common sense would tend to support that argument.

Despite knowledge that Tarrytown intended to operate a car dealership on the premises, the Landlord had not disclosed the existence of this local law to Tarrytown during their lease negotiation, and the lease itself contained no mention of the local ordinance. The terms of the lease explained instead that provisions in the lease related to the parking of automobiles were subject to “any restrictions of local law, zoning, or ordinance.”[3] The relevant local ordinances were neither mentioned nor described in the lease outside of this generalized provision. Surprised and frustrated by its discovery, in September, 2013, Tarrytown asked the Landlord for a release from the Lease given the commercially frustrating nature of this local ordinance. The Landlord refused.

negotiate commercial lease, Commercial Lease Attorney

Tarrytown subsequently brought suit in New York supreme court against the Landlord seeking release from the lease. Specifically, it alleged that the Landlord fraudulently induced Tarrytown into signing the lease by refusing to disclose the local ordinance, and that the Landlord had breached an implied covenant of good faith and fair dealing by failing to disclose the ordinance. The Landlord brought a motion to dismiss Tarrytown’s complaint. The New York supreme court granted this motion to dismiss, but only in part, with respect to the cause of action alleging fraudulent inducement. The Landlord, believing that the supreme court erred by declining to dismiss the complaint in its entirety, and appealed the supreme court’s order.

On appeal, the Second Department ruled in favor of the Landlord, and found that the lower supreme court should indeed have dismissed Tarrytown’s complaint in its entirety. But why?

The Second Department explained that the implied covenant of good faith and fair dealing is breached “when a party acts in a manner that would deprive the other party of the right to receive the benefits of their agreement.”[4] Simply put, this covenant constructively includes any promises “which a reasonable [person]…would be justified in understanding were included” with the rest of the written contract.[5] It was Tarrytown’s contention that the lease carried with it an implied promise from the Landlord that the premises were legally suitable for their intended purposes. The Second Department, however, felt otherwise. It explained that the lease explicitly provided that “no representation concerning the suitability of the premises for [Tarrytown’s]…intended business” was made in the lease. Accordingly, the court declined to “impos[e] a duty on the Landlord to disclose zoning or local law restrictions” on the basis that doing so would impose a duty on the Landlord that was expressly disclaimed by the lease.[6] The Second Department even went one step further by explaining that, generally speaking, contracts such as this may “conclusively establish a defense to causes of action alleging breach of the implied covenant of good faith and fair dealing.”[7] In essence, this means that contracts which state that no representations are being made therein with respect to a certain matter cannot be later invalidated on the basis that the contract should have made such a representation. This judicial analysis appears not to hinge on fairness, but rather on the express defensive language within the contract.

This case may understandably leave New York entrepreneurs and commercial lessees feeling uneasy. After all, this precedent places the burden on lessees to conduct their own due diligence before signing a lease by researching and identifying local zoning laws, local ordinances, and other rules and regulations that could disturb business on the premises. Commercial lessees would be prudent to carefully negotiate with landlords for the inclusion of express warranties and assurances in the lease itself. By the same token, lessees should be wary of those clauses which disclaim representations in the agreement.[8] Otherwise, lessees may fall prey to obscure and unknown regulations that serve to plague the premises that they paid so much to lease. To all business people who are shopping now or in the future for commercial leases: good luck, and caveat emptor.

[1] See generally 1357 Tarrytown Rd. Auto, LLC v. Granite Properties, LLC, 37 N.Y.S.3d 341 (N.Y. App. Div. 2d Dept. 2016).

[2] Id. at 342.

[3] See id. at 343.

[4] Id., citing Frankini v. Landmark Constr. of Yonkers, Inc., 937 N.Y.S.2d 80 (N.Y. App. Div. 2d Dept. 2012)

[5] Id., citing Dalton v. Educ. Testing Serv., 663 N.E.2d 289 (N.Y. 1995)

[6] Id.

[7] Id., citing Minovici v. Belkin BV, 971 N.Y.S.2d 103 (N.Y. App. Div. 2d Dept. 2013)

[8] See “New York Court Reminds Tenants to Do Their Due Diligence,” Westlaw Practical Law Real Estate, Oct. 28, 2016.

Non-U.S. (foreign) copyrighted works should be registered with the U.S. Copyright Office

by Henry Park, Esq.
Of Counsel and Registered U.S. Patent Attorney
Copyrights are territorial rights, which means that they are granted by—and limited to—the jurisdiction in which the copyright claimant seeks protection. To avoid this limitation, 171 countries have signed the Berne Convention for the Protection of Literary and Artistic Works.

Under the Berne Convention, signatories recognize that the works from one contracting state must be given the same protection in each of the other contracting states as the latter gives to its own nationals. See Berne Summary at http://www.wipo.int/treaties/en/ip/berne/summary_berne.html (1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union […] the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention.

See Berne Convention, Article 5(1) at http://www.wipo.int/treaties/en/text.jsp?file_id=283698#P109_16834. Moreover, that protection must not be conditioned upon compliance with any formality. See supra Berne Summary.

(2) The enjoyment and the exercise of these rights shall not be subject to any formality[.]
See Berne Convention, Article 5(2) at http://www.wipo.int/treaties/en/text.jsp?file_id=283698#P109_16834.

Non-U.S. copyrights, Best Law Firm in Brooklyn New York | Law Firm of Dayrel Sewell

When the U.S. became a signatory to the Berne Convention, it amended its copyright laws through the Berne Convention Implementation Act of 1988. Specifically, the U.S. amended Section 411 to require the registration of only domestic works before a copyright lawsuit can be filed. See 17 U.S.C. § 411(a).

Thus, a non-U.S. copyright claimant (i.e., foreign claimant) can initiate a copyright infringement lawsuit in the U.S. based on its foreign copyrights without registering them.

The U.S., however, did not amend Sections 410(c) or 412. Section 410(c) grants a presumption of validity to registered works, which affects the order of proof. See 17 U.S.C. § 410(c). Section 412 makes timely registration a prerequisite for certain remedies: the award of statutory damages and of attorneys’ fees. See 17 U.S.C. § 412.

[The committee] has concluded that the statutory incentives for registration contained in the provisions of sections 410(c), 412, and 205 of the Copyright Act are not preconditions for the ‘enjoyment and exercise’ of copyright. While those provisions substantially enhance the relief available to the proprietor of a registered work, they do not condition the availability of all meaningful relief on registration, and therefore are not inconsistent with Berne.

Elsevier B.V. v. UnitedHealth Group, Inc., 93 U.S.P.Q.2d (S.D.N.Y. Jan. 10, 2010) (quoting from Senate Report No. 100-352).
To avail oneself of the benefits associated with Section 412, the copyright holder must timely register its works.

– for an unpublished work, that the work is registered before any infringement

– for a published work, that the work is registered within three months of its first publication See 17 U.S.C. § 412. Once timely registered, the copyright holder may claim statutory damages instead of having to prove actual damages and the actual infringer’s profits. See 17 U.S.C. § 504(c). Statutory damages are determined by the court and range from between $750 – $30,000 per infringed work, and can go up to $150,000 per work if the infringement was willful. See 17 U.S.C. § 504(c). Additionally, the copyright holder may recover its costs and, if it is the prevailing party, its reasonable attorney’s fees. See 17 U.S.C. § 505; see also Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. ___ (2016) (a court examines a variety of factors when determining whether to award attorney’s fees, but should put substantial weight on the reasonableness of the losing party’s position). Both of these benefits are particularly strong negotiating tools. Thus, foreign copyright claimants should timely register their foreign copyrights with the U.S. Copyright Office to avail themselves of all potential relief under U.S. Copyright Law.

Myriad Back in Court on Patent Subject Matter Eligibility

On June 13, 2013, the Supreme Court issued a unanimous decision holding that “genes and the information they encode are not patent eligible simply because they have been isolated from the surrounding genetic material.” See Association for Molecular Pathology v. Myriad Genetics Corp. (AMP), 133 S. Ct. 2107, 2120 (2013). Attorney Sewell’s publication entitled “Unanimous U.S. Supreme Court and Angelina Jolie: BRCA1 & BRCA2 Patentability” is widely disseminated, well-received by his peers, and sparks considerable commentary.

Background

In somewhat of a twist, the Supreme Court’s decision against the patentability of isolated DNA prompted more—not less—litigation by Myriad regarding gene patents. Between 1997 and 2013, Myriad’s revenue from its BRACAnalysis test steadily increased, and totals more than $2 billion. BRACAnalysis is a genetic test that confirms the presence of BRCA1 or BRCA2 gene mutations, responsible for the majority of breast and ovarian cancers. Myriad earned that revenue by carefully guarding its patent rights and preventing others from providing screening tests for the BRCA1 and BRCA2 genes. From the mid-1990s, until the Supreme Court’s AMP decision, Myriad was the lone provider of full-sequence BRCA1 and BRCA2 tests in the United States. Within days of the Supreme Court’s AMP decision, Defendant Ambry Genetics Corporation announced plans to sell tests less expensive than Myriad’s to screen BRCA1 and BRCA2 genes. Ambry Genetics Corporation is a clinical diagnostic and genomic services company in Aliso Viejo, California. Defendant now offers a menu of at least six tests that include screening for BRCA1 and BRCA2: a combined BRCA1/BRCA2 test, BRCAPlus, BreastNext, PancNext, Ova Next, and CancerNext. Defendant’s BRCA1/BRCA2 test is available for $2,200—substantially less than the price for comparable testing offered by Myriad.

Soon after Defendant Ambry made its announcement, Myriad filed a complaint in the District Court of Utah alleging that Ambry’s genetic testing infringes several of Myriad’s patents. Myriad also moved for a preliminary injunction to enjoin Defendant Ambry from sales or offers to sell “genetic tests including a BRCA1 or BRCA2 panel”. Ambry opposed the motion, alleging that the claims were invalid under 35 U.S.C. § 101 et seq. The district court divided the Myriad gene patent claims at issue into the Primer Claims and the Method Claims.

On March 20, 2014, the Utah District Court held that Plaintiffs are not entitled to a preliminary injunction because “although Plaintiffs have shown they are likely to be irreparably harmed if an injunction does not issue, Defendant has raised substantial questions concerning whether any of the patent claims at issue in Plaintiffs’ Motion are directed toward patent eligible subject matter under 35 U.S.C. § 101”. Myriad then appealed to the Federal Circuit the denial of its motion for a preliminary injunction.

U.S. Federal Circuit Court of Appeals

On October 6, 2014, Chief Judge Prost and Judges Dyk and Clevenger of the U.S. Court of Appeals for the Federal Circuit heard oral argument in the interlocutory appeal of the Utah district court’s denial of Myriad’s motion for preliminary injunction against Ambry Genetics. In re BRCA1- and BRCA2- Based Hereditary Cancer Test Patent Litigation, Case Nos. 14-1361, -1366. The two main issues that dominated the argument are: 1) the correct implementation of the test for patent eligibility; and 2) the application of this test to probes and primers. The impact on the biotechnology industry was also discussed.

Jonathan E. Singer, counsel for Myriad, began by arguing that both the Federal Circuit and the Supreme Court had previously acknowledged that Myriad was entitled to patent some applications of their newly-discovered gene sequence and tools designed specifically to utilize that sequence. Myriad argues that primer pairs are patent subject matter eligible under 35 U.S.C § 101 because the pairs are structurally and functionally different than a single fragment of DNA. Counsel for Myriad also argued that, as a whole, the method of screening for alterations on the BRCA genes involves steps of the method claims, when considered together, effect an improvement in a technical field – by using Myriad’s probes and primers that Myriad invented.

With respect to the primer claims, Ambry argues that these claims are patent-ineligible because, in addition to reciting patent-ineligible products of nature, the claims fail under Alice because they are a generic component used to amplify a person’s gene sequence to access the sequence information for the patent-ineligible sequence comparison. As for the method claims, Ambry argues that under Alice, “the combination of unpatentable subject matter and a generic physical application is no more patent eligible than a claim reciting only the unpatentable subject matter.” See Ambry Supplemental Brief at page 3.

Conclusion

What is clear from the district and appellate court arguments is that it does not appear likely that Myriad will be successful in its attempts to preliminarily enjoin Ambry. Additionally, the biotechnology industry is looking towards the Federal Circuit for guidance on the correct implementation of patent subject matter eligibility under Myriad, Mayo, and Alice.

Intellectual property (patents, trademarks, copyrights, trade secret) is all around us and is valuable. The things that we use, watch, and buy are items that were thought of and then put into practice. Attorneys at the New York LAW FIRM OF DAYREL SEWELL, PLLC protect your intellectual property, so that you can maximize value. The majority of our attorneys possesses scientific training and is well-experienced in the litigation and prosecution aspects of patents, trademarks, copyrights, trade secrets, licensing, unfair competition, and more. Our passion and commitment is unmatched and is one of several aspects that set us apart from our peers. We care. As a result, our clients receive legal expertise with individualized attention by attorneys who are invested in the outcome of your matters. Our clients realize the value that this law firm delivers and are committed to a long-term, rewarding, attorney-client relationship.

Patent Troll Paying the Toll

In an exemplary ruling, the United States District Court for the Southern District of New York has ordered the so-called patent troll, Lumen View Technology, LLC (“Lumen”), to pay opposing party FindTheBest.com’s legal fees and other expenses under the fee-shifting provision of 35 U.S.C. § 285. See Lumen View Technology, LLC v. FindTheBest.com, Inc., 1:13-cv-3599 (DLC) (SDNY 2014).

Lumen filed suit against FindTheBest in May 2013 alleging FindTheBest infringed on a computer-implemented method patent that facilitated bilateral and multilateral decision-making. Lumen also filed more than twenty other similar patent infringement claims against various other technology companies during 2012 and 2013. FindTheBest quickly noticed the Lumen claim was a sham due to the fact that FindTheBest technology did not use a bilateral or multilateral decision-making process. The Southern District found Lumen’s suit to be without merit and dismissed the case in November 2013.

After the dismissal, FindTheBest petitioned the court to find Lumen’s suit one of an “exceptional case” under Section 285 and the recent Supreme Court ruling in Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014).

In the April 2014 unanimous decision penned by Justice Sotomayor, the Supreme Court ruled that an “exceptional case” under § 285 is one that stands out from others with respect to a party’s litigating position, considering the law and the facts of the case, or the unreasonable manner in which the case was litigated. See Octane Fitness, LLC, 134 S. Ct. at 1756.

The Court found the previous standard in Brooks Furniture Manufactuirng, Inc. v. Dutailier Int’l, Inc., 393 F. 3d 1378 (2005), to be overly restrictive and one that hampered the statutory grant of discretion given to the courts under Section 285. Section 285 imposes only one constraint on a district court’s discretion to award fees, one of “exceptional” cases. In Brooks, a case could only be deemed exceptional when there was material inappropriate conduct, or when parties brought cases in subjective bad faith and were objectively baseless. The Court found this framework to be inconsistent with the text of Section 285.

In step with the Supreme Court’s Octane decision, the Southern District found Lumen’s patent infringement suit to fall under the “exceptional case” standard. As such, the Southern District of New York granted FindTheBest’s motion and found the suit to be a “prototypical exceptional case” shifting payment of FindTheBest’s case fees to Lumen.

Continuing Legal Education, Networking, and Refreshments

The LAW FIRM OF DAYREL SEWELL, PLLC is pleased to announce that Dayrel will be co-presenting a Continuing Legal Education (CLE) course called “Intellectual Property Fundamentals: What Every Attorney Needs to Know” on Monday, May 19, 2014 at the Brooklyn Bar Association.

This Continuing Legal Education event will provide practicing attorneys with a primer to issue spot, analyze, and provide better value to their clients by competently addressing the various intellectual property issues that arise in a myriad of business transactions and lawsuits.

Along with an overview of the main intellectual property areas of patent, trademark, and copyright, this course will provide key practice points, current case law, and analytical framework that are sure to add value to your practice.

While many attorneys lack the STEM background required to become a registered U.S. Patent Attorney, one would be remiss to ignore the significant, valuable intellectual property ramifications of various business decisions. From employment contracts to social media to portfolio licensing, intellectual property is all around us.

Intellectual property (IP) is an overarching term for the legal protection of creations, inventions, products or processes that originate from a person’s mind or ‘intellect’. Generally-speaking, intellectual property fits into one of four distinct categories: patents, trademarks, copyrights, and trade secrets. While some of the principles are similar to real property, there is a plethora of rules and laws to protect such intellectual inventions both domestically and internationally.

The United States Patent and Trademark Office (USPTO) is the federal agency for granting U.S. patents and registering trademarks. In doing this, the USPTO fulfills the mandate of Article I, Section 8, Clause 8, of the Constitution that the legislative branch “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” The USPTO registers trademarks based on the commerce clause of the Constitution (Article I, Section 8, Clause 3). Additionally, The USPTO advises the president of the United States, the secretary of commerce, and U.S. government agencies on intellectual property (IP) policy, protection, and enforcement; and promotes the stronger and more effective IP protection around the world.

Refreshments and networking will immediately follow the CLE presentation. The attached flyer contains further course and registration information. You are encouraged to attend this fun and informative event. We look forward to seeing you!

Intellectual Property Fundamentals What Every Attorney Needs to Know

The USPTO for intellectual property fundamentals

Patent Assertion Entity Settles with Attorney General and Sues the Federal Trade Commission

On January 14, 2014, the Office of the New York State Attorney General (OAG) made a significant contribution in combating the ignominious patent troll.

Attorney General Eric Schneiderman announced that MPHJ Technology Investments, LLC (MPHJ), a so-called “patent troll”, entered into an Assurance of Discontinuance (or settlement) with the OAG stemming from the OAG’s June 2013 investigation of potentially deceptive statements, and other abusive conduct, by MPHJ relating to its patent licensing program which targeted New York businesses as potential infringers of its patents.

See Assurance No. 14-015. The Attorney General’s investigation focused on MPHJ’s use of deceptive and abusive tactics when it contacted hundreds of small and medium-sized New York businesses in an effort to strong-arm them into paying MPHJ for patent licenses of dubious value.

Thankfully, the State of New York is taking corrective measures against patent troll abusive tactics. The settlement establishes guidelines for entities who exemplify patent troll behavior. Amongst other things, the settlement contains guidelines for future patent assertion conduct that, in part, include:

good faith basis for asserting patents after conducting reasonable diligence;
providing material information necessary for an accused infringer to evaluate a claim;
material information necessary to evaluate a reasonable royalty rate;
no misleading statements about a license fee;
transparency of ownership of the patent holder and financial interest;
additional safeguards against deceptive patent assertion conduct; and,
material information necessary to evaluate the value of a proposed license

It is important to note that the guidelines in the OAG’s settlement are minimum standards and are not a safe harbor. OAG states that “[t]he requirements imposed on MPHJ in the settlement should be viewed by other patent trolls as the minimum standards that such entities seeking to contact New York businesses must follow to avoid liability for unlawful deceptive practices.”

MPHJ v. FTC

In addition to falling squarely within the crosshairs of the New York, Nebraska, Minnesota, and Vermont Attorney Generals, MPHJ is one of the first patent trolls to ostensibly catch the consumer protection watchful eye of the Federal Trade Commission (FTC). Prior to the FTC filing its draft complaint, MPHJ filed its own preemptive complaint on January 13, 2014 in the Western District of Texas against the FTC and its commissioners and directors. See MPHJ Technology Investments v. FTC et al.; case no. 6:14-cv-00011-WSS. As a bit of background, the FTC first sent a subpoena to MPHJ in July 2013, “seeking certain information regarding MPHJ’s patent-related correspondence and enforcement activity” prior to likely seeking a consent judgment or pursuing FTC Act litigation barring deceptive trade practices. FTC also served a subpoena on Farney Daniels, the law firm retained by MPHJ to help with its enforcement campaign.

MPHJ contends that its lawsuit against the FTC arises out of the “unlawful interference and threats by the FTC Defendants against MPHJ and its counsel directed at stopping or impeding the lawful, proper, and constitutionally protected efforts by MPHJ to identify and seek redress for infringement of its U.S. patents.”

To date, the FTC has not filed its reply to MPHJ’s Complaint. Notwithstanding, intellectual property enthusiasts and many interested others anxiously await greater, appropriate patent reform.

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