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Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

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July 30, 2014

Muddying the Natural (Patent) Waters

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Posted by Alan Wexelblat

In the past couple of years (see for example the Prometheus decision). The Supreme Court has issued a series of rulings that attempted to clarify what is and is not patentable. Unfortunately, the result has been the exact opposite, with court decisions creating chaos and confusion over what is the proper subject matter of patent applications.

The USPTO has issued proposed rules that appear not only to take the SCOTUS decisions at face value, but expand them to a great extent by declaring vast tracts of what had previously been patentable as out of bounds. An article on earlier this month decries the likely outcomes.

The piece estimates that "almost half the drugs approved in the United States from 1981 to 2010 would have been rejected under these guidelines". While I am still concerned about overpriced medicines and their consequences, it's still likely that in the absence of some form of protection these medicines would not have been developed. It's possible that the Patent Office will implement less draconian interpretations, but even so I cannot see an easy way out of this thicket.

Comments (0) + TrackBacks (0) | Category: Laws and Regulations

July 21, 2014

Lest You Had Any Doubts, the ALA is on the Right Side Again

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Posted by Alan Wexelblat

I got an update from American Library Association (ALA) letting me know that they had joined with other higher education and library organization to file a joint comment to the FCC in support of net neutrality.

This should serve to remind everyone that while the Internet is perhaps the most amazing commercial platform yet invented, it's also an information access mechanism for schools, for libraries, for communities, and for the public. As such it needs not to have "paid prioritization" and it needs rules that allow us to choose what we get, not the cable companies. The Internet has a public, an educational, and democratic imperatives that are every bit as important as its commercial imperative and don't you forget it.

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July 18, 2014

Deadly Effects of Unaffordable Medicines (TPP)

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Posted by Alan Wexelblat

On the eve of the next round of secret talks on the festering pushole that is the TPP - the trade treaty so secret it can only be seen the by the multinational corporations that are writing it - MSF is once again attempting to encourage some variant of sanity.

As I've written before, MSF/Doctors Without Borders is opposed to the TPP provisions that promote patent protection over human protection. In their latest missive (linked above) the organization points out that "harmful new rules" in TPP will push prices higher for life-saving medicines, and of course this will hit the poorest countries the hardest. Additionally, TPP continues to promote the regime of secret, unaccountable courts that would set themselves above the national courts of the signatory nations. As MSF notes:

The Canadian government has been sued by Eli Lilly to the tune of $500 million, based on similar provisions in NAFTA, because the corporation objects to a Canadian Supreme Court ruling rejecting the patent for two of its blockbuster drugs. As a result, Canadian law could be overturned by a ruling made in a secret, private arbitration proceeding.

As before I feel I should note that I am a long-time donor to MSF, but have no other affiliation with the organization.

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July 15, 2014

FMC + Musicians vs FCC on Net Neutrality

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Posted by Alan Wexelblat

Our friends at the Future of Music Coalition rounded up a star list of songwriters, performers, and independent artists try and get the FCC to back off its plans to wreck net neutrality. Kevin Erickson was kind enough to send me a link to the collected artists' comments, which you can read online at the FMC site.

My favorite pull quote from the comment filing:

We music people know payola when we see it. And what we see in Chairman Wheeler’s proposal doesn't give us any confidence that we won’t end up with an Internet where pay-by-play rules the day. We've heard this song before, and we’re frankly pretty tired of it.

Thousands of us have already told the FCC that losing an open Internet would be disastrous to the music community, and we suppose there's no harm in telling you again. But this time, we really hope you'll listen. We may not be telecom lawyers, but we get this issue pretty clearly. You have the legal authority to prevent discrimination and paid prioritization online. You only need to exercise it.

It's been a long time since I wrote about how payola came to the digital music landscape. Doesn't mean the problem has gone away, though.

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June 25, 2014

Aereo Loses

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Posted by Alan Wexelblat

In a 6-3 decision, the Supreme Court has acted to close a loophole in copyright law. We've discussed in the past how Aero narrowly tailored its business model and architecture to fit in this loophole; this result likely means the end of their business.

I'm sure there will be plenty of analyses flowing, and lots of people commenting on the implications of this decision. It seems like a small area of the law, but it's possible that this ruling will be used against a wide variety of nascent businesses, despite Breyer's apparent intention that the decision be read narrowly. The decision seems to go to great lengths to say that Aereo is (like) a cable company and thus should be subject to the copyright restrictions. Breyer specifically calls out a position taken by the US Solicitor General

that “[q]uestions involving cloud computing, [remote storage] DVRs, and other novel issues not before the Court, as to which ‘Congress has not plainly marked [the] course,’ should await a case in which they are squarely presented.”
That's a good theory; let's see how it shakes out in practice. My cynical side thinks the Cartel will still see this decision as a green light to go after cloud storage companies in general.

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June 19, 2014

CAFC Wins, Alice Loses

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Posted by Alan Wexelblat

Since we've been ragging on the CAFC lately for its losses on appeal, it's worth noting that this was a unanimous decision upholding the Federal Circuit.

The case, conventionally known as Alice Corp v CLS Bank dealt with challenges to patents held by Alice Corporation. I've read through the decision once and I expect better analyses will enlighten things in days to come, but what I see is that the Supreme Court is still swimming about in murky §101 waters. In particular, SCOTUS agreed with the CAFC that Alice Corp's patents were invalid because "...they are directed to an abstract idea." As such, they're not proper subject matter for a patent.

This follow the line of reasoning that the two Courts have established in cases like Bilski and Myriad, but as we noted last time around, it's not clear to me that this line of reasoning is actually consonant with how sections 101 and 103 try to define things.

Thomas's opinion is pretty short and if you don't agree with the previous line of SCOTUS reasoning then you're not going to like this opinion either because it goes to great pains to trace how those past decisions require the present conclusion. Thomas reviews the reasoning in Mayo, and relies on that decision and Benson to argue that the patent claims construction "merely require generic computer implementation" and that this doesn't make the underlying ideas eligible for patent protection.

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June 3, 2014

If the CAFC Isn't Listening, Maybe Other Judges Are

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Posted by Alan Wexelblat

When the Supreme Court overturned the CAFC in a case known as Octane Fitness earlier this year, I noted that SCOTUS was telling the CAFC that the Federal Circuit had the wrong idea about when attorney fees could be awarded in baseless patent suits. Now, according to Joe Mullin for Ars, we have our first ruling1 putting the Octane principle into action.

The case involved another 'fitness' company - information fitness in this case. FindTheBest is a start-up that offers to help people match up offers with needs. According to Lumen View, FTB was in violation of a patent Lumen held and it sued in what has become a typical troll pattern: the suit was held back if only FTB would settle; Lumen filed a large number of similar suits all at once, etc. Most tellingly, according to the judge's decision in this case Lumen didn't do "any reasonable pre-suit investigation."

That led the judge to determine that Lumen's case fit the criteria laid out in Octane and Judge Cote has found this case to be an exceptional one that justifies shifting FTB's legal fees to Lumen. The exact amount of this shifting is still to be deteremined, as FTB will have to show the judge what it cost to defend this case.

It will be interesting to see what Lumen's response is. They may just chalk one up in the loss column and move on, assuming that other defendants will be more willing to settle. A district judge's ruling isn't precedential in other jurisdictions, but it should be helpful to other defendants. If there's a District split then that gives Lumen stronger grounds for appeal later on; on the other hand, the risks of multiple judges following Judge Cote's reasoning might give them pause.

1. According to Mike Masnick at Techdirt, "NewEgg was able to pursue fees against a troll" so this might technically not be the first.

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June 2, 2014

More CAFC Volleyball

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Posted by Alan Wexelblat

The Supreme Court unanimously overturned the CAFC twice (again) this week, continuing to highlight how dysfunctional this court has become. The cases were Limelight v Akamai and Nautilus v Biosig.

You can read about the details of the cases if you like, but the key point is that the CAFC and SCOTUS continue to disagree about major elements of, and interpretations of precedents for, patent law. This runs directly counter to the purpose for which the Federal Circuit was created, which is bad news for litigants and application writers. However, the specifics of these two cases probably make no difference because they are just part of an ongoing "pissing match" as Greg Aharonian calls it between the two courts.

Aharonian, in his emailed PATNEWS newsletter, points out that in theory SCOTUS can direct the CAFC to decide cases according to its decisions but in practice there's no enforcement mechanism. This leaves the CAFC judges free to ignore Supreme Court mandates and suffer no consequences as a result. The losers, again, are the people who have to litigate these things because when CAFC renders a decision that contradicts SCOTUS instructions it's still up to the litigants to appeal back to the Supreme Court to correct the CAFC's error.

I'm not a lawyer and I have no idea what mechanisms exist that could help with this situation. I know that we have problems with bad patents and people abusing the patents that are issued, but even once those problems get fixed we will need a unified judicial voice to interpret patent laws in light of new scientific and technological advances as well as new social understandings. This? This is a disaster.

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May 1, 2014

Two Patent Cases from Sotomayor

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Posted by Alan Wexelblat

The Supreme Court handed down two patent-related decisions this week, both with lead opinions authored by Justice Sotomayor.

In Octane Fitness, LLC v. ICON Health & Fitness, Inc. the Court addressed the issue of attorney fee awards. If you've been following the patent troll debates you have probably seen the idea that awarding attorney fees could be a way to curb some of the worst abuses of the patent system. The law presently allows awarding fees in "exceptional cases" but gives only only general guidelines for what could be considered an exceptional case. In a unanimous ruling, the Supreme Court effectively reigned in the Court of Appeals for the Federal Circuit's current method of exercising discretion in these cases and moved that discretion back to the District level.

I'm not well-enough versed in the law to have an opinion whether the Court got it right in this case, but I think this is a desirable outcome. Lately the CAFC has been arrogating extra powers to itself, making de novo findings and so on. I think these matters are much better handled at the district level, where evidence and findings of fact are normally argued. Yes, this will likely lead to more differences of opinion and I suspect that the CAFC and SCOTUS will end up having to make additional decisions that set guidelines but we need a rich debate in the Courts over how to apply the law as it's increasingly clear that Gridlockress isn't going to help.

Most crucially for those fighting against trolls right now, this decision provides a sharp rebuke to the CAFC's narrow and restrictive view of when fee awards are appropriate. Ronald Mann on SCOTUSblog has a nice summary of the four main errors that the Supreme Court saw and wished to correct.

In Highmark Inc. v. Allcare Health Mgmt. Sys., Inc. the Court addressed the specific grounds for finding a case exceptional and handed another weapon to the anti-troll fighters. By specific reversal, the Court held that continuing to litigate cases that should reasonably be known to be baseless (e.g. from previous losses) is grounds for fee awarding.

This is important as it can curtail two bad-actor practices: "forum shopping" in which a troll continues trying to win cases in different jurisdictions until it finds a friendly judge. Then that single victory can be used to pressure settlements from other companies. Additionally, some trolls have filed RIAA-style mass lawsuits, trying to hit as many targets at once as possible. Under Highmark a defendant against such a suit can reasonably ask a judge to suspend trial pending other outcomes since the mass-filer now would face the risk of having continued suits being subject to penalty awards if it lost a lead case.

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April 24, 2014

No, I'm Not Going to Bother Posting Another Revolving Door Pic

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Posted by Alan Wexelblat

Both Boingboing and Vox put up very nice images of revolving doors to go with the story of how the Cartel has captured the Obama administration's trade agenda. Back in the dark ages (like, starting shortly after Obama came into office) I noted that the RIAA was taking over the DoJ. Sure enough the result was that federal agencies got turned into copyright cops and we got copyright maximalism.

It's really unsurprising, then, that other bits of the Cartel (the MPAA and its affiliates in this case) have also gotten in on the act. The recently resigned US Trade Rep goes to work for the Cartel, joining at least a dozen of his colleagues. Meanwhile, Obama nominates Robert Holleyman, fresh out of the pro-SOPA BSA, to be the new trade rep.

The phrase you are looking for here is "regulatory capture" and as Wikipedia so baldly states, it's corrupt, and a form of government failure. Yes, it didn't start with Obama nor will it end with his departure. But it has gotten particularly brazen under a man who promised to keep his administration at arm's length from lobbyists.

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March 11, 2014

What is the Solicitor General Arguing in Aereo?

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Posted by Alan Wexelblat

In a comment on yesterday's discussion of arguments against Aereo and their implications, J.S. Greenfield argues that I have mischaracterized the position taken by the US Government.

Greenfield points to his own blog entry that discusses what appear to be self-contradictory arguments the SG's office is making. Greenfield notes that there's an important question of "equipment rentals" involved and that one of the issues SCOTUS will need to consider is who is actually doing the "transmitting" of the signal from the cloud DVR to end device. It will make a great deal of difference if the Court decides that the end user is the one doing the transmitting (essentially, downloading their own data) versus Aereo doing the transmitting.

If you believe that latter position, then you can argue that Aereo's system is distinguishable from Cablevision's system because Aereo lacks a license to transmit, which Cablevision has. This would allow the Court to rule against Aereo as a company and business model while still allowing the existing Cablevision decision to stand. If that decision stands, then the threat to cloud storage systems is much less. Except Greenfield argues that distinction rests on (what I would characterize) as nonsense.

In specific he argues that the S.G.'s office brief points to "[a] centralized server and other shared equipment" as well as the way that Aereo dynamically allocates its resources to meet customer demand. Which is, work with me here, pretty much exactly what every other cloud storage provider does. Aereo's architecture may look insane but that doesn't mean it has to ignore basic computer science.

The bottom line in Greenfield's blog is that the government has not offered any logical way to distinguish this case from other potential cloud-storage provider cases and so we're right back where Matt Schruers said we were: If Aereo goes down, a whole lot of next-gen computing solutions are going to be in deep trouble.

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March 10, 2014

Performance Rights, Aereo, and the Cloud

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Posted by Alan Wexelblat

For people who are tired of legal minutae, here's the one liner: Matt Schruers argues at the Disruptive Competition blog that if Aereo loses it will be a big setback for a lot of cloud computing efforts.

That's a fairly big claim to make. As we've discussed from the start Aereo is a kind of weird cloud play itself that is using a particular interpretation of a previous case under which its admittedly crazy set-up ought to be legal. Broadcasters have challenged that and it's likely that SCOTUS will clarify or overturn that ruling in this case.

Schruers points out that this pivots on the question of public performance rights. If Aereo is allowing you to access your legally obtained copies of programs from a cloud server (essentially a remote DVR) then no public performance is happening and thus those rights are not implicated. If the Cartel's theory is correct, though, then the fact that Aereo has all these individual copies doesn't matter - what matters is that the material is being made available to multiple members of the public.

Now stop and think: multiple copies of legally obtained files, made available to multiple members of the public, individually and at different times. If that sounds to you like what Dropbox, SkyDrive, iCloud, and Google Drive (to use Schruers' list) are doing, then you begin to see the problem. If the Cartel prevails in this case it would be a throat-punch for every cloud storage service of every kind, everywhere. As Schruers puts it:

Because all commercial content is likely to be stored and streamed to more than one user eventually, cloud services would have to assume that everything they make available online would ultimately implicate some public performance right.

As usual, the Obama administration is on the wrong side of this one, filing a brief in support of the Cartel and arguing for overturning Cablevision, the base case here.

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March 8, 2014

Google as "The Copyright Court of Last Resort"

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Posted by Alan Wexelblat

Following up on yesterday's discussion of "right of performance", David Post has an interesting blog entry up questioning why Google took the position it did.

He quickly reviews the standard notice-and-takedown procedures, and points out that YouTube (Google) handles hundreds of thousands of these requests in the standard manner. It's not clear why Google refused this takedown request.

The unfortunate consequence of that refusal is that Google now has to be the named defendant in Garcia's suit, rather than an impartial intermediary as it is in other cases. As I noted yesterday, a significant portion of Garcia's claim has to rest on the question of fraudulent action, but Google is not the fraudulent actor here, nor can it possibly produce any evidence related to the interaction between Garcia and the filmmakers prior to the film appearing. Without being able to adjudicate those issues, Garcia's claim becomes a matter of secondary legal theory.

For Google to exercise what Post calls "decision-making discretion" about a case where it is not in possession of key facts is to set itself up as a court for copyright matters. That can only end badly.

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March 7, 2014

Is There an Independent "Right of Performance"?

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Posted by Alan Wexelblat

The traditional answer has always been "no" but in Garcia v. Google, Inc. the 9th Circuit appears to be saying "yes".

A few undisputed facts are relevant here: Garcia is an actor who alleges she was tricked. She believed she was performing in one film ("Desert Warrior") but in fact her performance was dubbed into another film called "Innocence of Muslims." This latter film, on being viewed publicly, caused a controversy and appeared quite insulting to some Muslims even to the point of an imam issuing a fatwa that called for the killing of everyone involved with the film.

Garcia has attempted to have herself removed from the film, and to control reproduction and circulation of the film. As part of that she has tried to get YouTube (Google) to remove copies of the film with her performance in it. Her claim is that she has an independent copyright in her performance. The film's producer has claimed she signed a typical acting waiver, which ought to transfer her rights to the filmmaker. Her counter-claim would have to rest on the notion of being defrauded. If a judge agreed that she had been tricked as to the circumstances of her performance, the waiver could be ruled null and rights in her performance might then revert to her.

Which brings us back to the question of what rights (if any) does Garcia have in how her performance is used? The notion of the existence of such rights has enraged certain commenters (notably Mike Masnick on techdirt) but I am less certain.

What the 9th has said is not "Garcia is correct" but rather it has granted an injunction based on an evaluation that she has a likelihood of succeeding at trial. The injunction requiring Google to remove any copies of the fraudulent film is not dissimilar in my eyes from an injunction requiring removal of a song video by Band A when Band B claims that Band A is passing off its work fraudulently. In the case of a song we have a unified performance in which the myriad of rights are well settled by caselaw. The Garcia case raises the question of whether a film also encompasses a myriad of rights that we normally don't pick apart but in the case of fraud we might need to.

What the Ninth seems to be saying is "let the arguments be made at trial and we'll see." Unlike Masnick I think this is a reasonable way to explore the issue

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February 14, 2014

Interesting Patent Note: Reducing to Practice

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Posted by Alan Wexelblat

One of the important elements in establishing prior art for challenging patents (a big deal these days as we're dealing with more patent trolls) is showing that the invention disclosed in the patent has been "reduced to practice" at some time prior to the patent's claims. Basically, if you can show you were doing a process or using an invention prior to someone making a patent claim then that claim can be invalidated even if you didn't try to patent the thing you were using.

In Solvay, S.A. v. Honeywell Int'l, Inc. the CAFC has affirmed a judgment that the person who reduces an invention to practice does not have to be the inventor. In fact, the inventor was even in another country and although they applied for a patent there (Russia) the foreign patent application wasn't key to this case so much as the fact that the information was communicated to others (in the US) who then reduced the invention to practice.

This is one reason why people interested in busting patents often search for examples of old running systems from the early days of computing. It doesn't matter who wrote the code behind, say, the PLATO chat system - the existence proof of that system is sufficient to invalidate many claims for modern social software.

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February 12, 2014

Would Congress Revisit Fair Use?

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Posted by Alan Wexelblat

David S. Kemp, a lawyer who writes frequently for Justia's Verdict blog, posted a nice summary of the current American legal Fair Use doctrine.

This comes in response to hearings late last month in front of the House Judiciary Committee, which is apparently considering what it might do to the law. Kemp, following the line of some of the witnesses testifying, believes that Congress should act to strengthen fair use (no duh) but specifics will come in part 2. This column is a review of the current state of the law - primarily the Copyright Act of 1976 - and some of the court cases that have considered it.

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January 30, 2014

Mayo Coming Home to Roost

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Posted by Alan Wexelblat

I've written before about how I think the Supreme Court in Mayo muddied the waters rather than clearing them. Now comes Judge Taranto of the CAFC with an opinion in the case SmartGene v. Advanced Biological Laboratories. In this opinion, we find this gem
The Supreme Court in Mayo [...] recognized that "mental processes" and "abstract ideas" (whatever may be the precise definition and relation of these concepts) are excluded from Section 101.
In English what I think that means is that this Judge is writing an opinion citing a SCOTUS precedent that he doesn't think explains anything. Because if the opinion doesn't provide guidance on what might be the definitions of "mental process" or "abstract idea" then how can those concepts be used in a decision by the CAFC that rules on patent validity?

Seriously, guys, WTF? It's like I said "your patent is invalid because hamscrobble berwick" and didn't define that term either. The level of brokenness here is epic and I suppose I should give a nod to Judge Taranto because at least he's willing to say that he doesn't know what Mayo means when it uses those terms. Other judges seem content to go on issuing opinions that claim to be following the Mayo precedent and that therefore those judges understand what those terms meant, which strikes me as highly suspect.

(h/t to Greg Aharonian of PATNEWS for highlighting this decision.)

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January 16, 2014

The FCC Lost, not Net Neutrality

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Posted by Alan Wexelblat

Over at ReadWrite, Dan Rowinski has a nice piece pointing out just how limited Verizon's victory was. DemandProgress and others have been spamming me with "NET NEUTRALITY DEAD!" and other alarmist emails, but in reality that's not what the court decided.

As I mentioned earlier this week, what the Court ruled on was not net neutrality itself, but on the power of the FCC to issue such regulations. Rowinski elaborates, pointing out that Verizon raised both First and Fifth Amendment issues and didn't win on those grounds. In fact, the CAFC appears to have agreed that the FCC does have authority to issue regulations much like what net neutrality proponents want, but only for utilities.

The obvious answer is for the FCC to suck it up and reclassify, dealing with the political firestorm that will ensue. That doesn't guarantee that the CAFC (or some other Court) will necessarily agree that the specific regulations are still constitutional in the case of a utility, but it seems like we'd all be much better off.

ETA: Over at Boingboing, Cory Doctorow rounds up several other more realistic takes on the Court's ruling and focuses on the fact that the FCC's rules-as-written "sucked". This decision presents an opportunity to write better rules, assuming one is going to put up with even more howls of protest from industry.

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December 13, 2013

OK, Let's Stop Harassing Apple Over E-Books

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Posted by Alan Wexelblat

John Dean (yes that John Dean) has an interesting column up on Justia's Verdict blog detailing the mess that has emerged from Judge Denise Cote's finding against Apple in the e-book price collusion case.

As you may recall, Apple chose to fight rather than switch... err, settle with the DOJ and the states over allegations that it colluded with the big e-book publishers to fix prices. In a bench trial before Judge Cote, Apple lost and will appeal. That's not unusual. What's gotten everyone's hackles up is what happened next.

Judge Cote at first appeared to be treating Apple quite leniently, as her decision denied the DOJ several of the terms they had sought. But then she appointed an external monitor and appoined a fellow named Michael Bromwich to that role. At first blush Bromwich appears q