Intellectual Property Legal Issues Protecting IP Rights and Mitigating Infringement Risks in Virtual Storage and Applications

Transcription

1 Presenting a live 90 minute webinar with interactive Q&A Cloud Computing: Intellectual Property Legal Issues Protecting IP Rights and Mitigating Infringement Risks in Virtual Storage and Applications WEDNESDAY, OCTOBER 12, pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: Peter H. Kang, Partner, Sidley Austin, Palo Alto, Calif. Brian E. Mitchell, Attorney, Mitchell + Company, San Francisco The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Cloud Computing: Intellectual Property Legal Issues Protecting IP Rights and Mitigating Infringement Risks in Virtual Storage and Applications Strafford Publishing Webinar Wednesday, October 12, a.m. (PDT) Presented By Brian E. Mitchell, Esq., Mitchell+Company and Peter H. Kang, Esq., Sidley Austin LLP 5

6 Cloud Computing: IP & Legal Issues FACULTY Brian E. Mitchell, Founding Partner, Mitchell + Company Law Offices, San Francisco, CA Brian Mitchell handles patent, copyright, trade secret, and trademark matters. He is an expert at mastering the intersection between technology and the law, and has handled matters involving a wide range of products and technological areas, including hardware and software for mobile devices, consumer electronics, and telecommunications, as well as Internet, e-commerce, and business method patents. t He is currently also a Lecturer in Law at Santa Clara University Law School. J.D., University of San Francisco; B.A., Cal. State University at Sacramento. Peter H. Kang, Partner, Sidley Austin LLP, Palo Alto, CA Peter Kang counsels and litigates in all areas of intellectual property law, including patent, trade secret, trademark, and copyright law. His practice focuses on representing clients in patent lawsuits, complex commercial and technology litigation, trade secret disputes, and copyright/trademark suits. He also represents clients in IP licensing and complex business/technology transactions. He has been recognized for his work in IP by The Legal 500, IFLR1000, Asia Law & Practice, and Northern California Super Lawyers. J.D. (cum laude) Georgetown University Law Center; B.S. and B.A., Stanford University. 6

7 BEIJING BRUSSELS CHICAGO DALLAS FRANKFURT GENEVA HONG KONG LONDON LOS ANGELES NEW YORK PALO ALTO SAN FRANCISCO SHANGHAI SINGAPORE SYDNEY TOKYO WASHINGTON, D.C. Cloud Computing: Intellectual Property Legal Issues PART ONE Strafford Publishing Webinar Wednesday, October 12, 2011 Peter H. Kang

8 8 Cloud Computing & Legal/IP Issues

9 9 WHAT IS THE CLOUD When people talk about cloud computing, they re talking just about taking some stuff, putting it outside the firewall, and perhaps putting it on servers that are also shared or storage systems. Microsoft CEO Steve Ballmer The interesting thing about cloud computing is that we ve redefined cloud computing to include everything that we already do. I can t think of anything that isn t cloud computing with all of these announcements. I don t understand what we would do differently in the light of cloud computing other than change the wording of some of our ads. Oracle CEO Larry Ellison It s become the phrase du jour." Gartner Senior Analyst Ben Pring

10 DEFINING CLOUD COMPUTING Marc Andreesen described the cloud as a smart, complex,,powerful computing system in the sky that people can just plug into. 10

11 Defining Cloud Computing NIST defines cloud computing as a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that t can be rapidly provisioned i and released with minimal management effort or service provider interaction. The cloud model defined by NIST is multi-dimensional and composed of five essential characteristics, three service models, and four deployment e models. 11

12 Defining Cloud Computing The five essential characteristics of the cloud model developed by NIST are: 1) on-demand self-service; 2) broad network access; 3) resource pooling; 4) rapid elasticity; and 5) measured service 12

13 Defining Cloud Computing Deployment models as defined by NIST: 1) Public Cloud (Gmail); 2) Private Cloud (or Virtual Private Could) (Cerelink); 3) Community Cloud (Google Gov Cloud); 4) Hybrid Cloud (surge computing Rackspace) Service models as defined by NIST: 1) Software as a Service (SaaS Salesforce.com); 2) Platform as a Service (PaaS BestBuy s Giftag running on Google App Engine); 3) Infrastructure as a Service (IaaS Amazon Elastic Computing Cloud (EC2)) 13

14 Cloud Computing Salient Features Third party control and access to data Lack of transparency No geography in the cloud borderless Potential multiple copies of data dispersed in the cloud 14 Surge computing

15 Potential IP Issue: Patents and the Cloud Patent Infringement Issues Divided Infringement Extraterritoriality Investigating and proving infringement 15

16 Potential IP Issue: Patents and the Cloud Divided Infringement and Extraterritoriality Ordinarily, whether an infringing activity under section 271(a) occurs within the United States can be determined without difficulty. This case presents an added degree of complexity, however, in that: (1) the patented invention is not one single device, but rather a system comprising multiple distinct components or a method with multiple distinct steps; and (2) the nature of those components or steps permits their function and use to be separated from their physical location. RIM v. NTP, 418 F.3d 1282 (Fed. Cir. 2005) 16

17 Potential IP Issue: Patents and the Cloud Divided Infringement and Extraterritoriality In RIM, part of the claimed system was in Canada Customers of Blackberry were in the U.S. Federal Circuit held that use of the system occurred in the U.S. and thus the system/apparatus claims were infringed Court held that method/process claims were not infringed as a matter of law a process cannot be used within the United States as required by section 271(a) unless each of the steps is performed within this country. 17

18 Potential IP Issue: Patents and the Cloud Divided Infringement and Extraterritoriality In RIM, part of the method was performed by RIM, not customers in the U.S. Federal Circuit held that there was no sale, offer to sell, importation, or 271(f)-(g) infringement of the method/process claims as a matter of law RIM's performance of at least some of the recited steps of the asserted method claims as a service for its customers cannot be considered to be selling or offering to sell the invention covered by the asserted method claims. The sale or offer to sell handheld devices is not, in and of itself, enough. Thus, we conclude as a matter of law that RIM did not sell or offer to sell the invention covered by NTP's method claims within the United States. 18

19 Potential IP Issue: Patents and the Cloud Divided Infringement This court therefore holds as a matter of Federal Circuit law that there can only be joint infringement when there is an agency relationship between the parties who perform the method steps or when one party is contractually obligated to the other to perform the steps. Akamai Techs., Inc. v. Limelight Networks, Inc., F.3d, 2010 U.S. App. LEXIS at (Fed. Cir. Dec. 20, 2010) 19

20 Potential IP Issue: Patents and the Cloud Patent Portfolio Development - 10 versus 750 Business Method (Bilski) issues [T]his court also will not presume to define abstract beyond the recognition that this disqualifying characteristic should exhibit itself so manifest as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attentions on the patentability tab ty criteria of the rest of the Patent Act. Research Corp. Techs., Inc. v. Microsoft Corp., - F.3d -, 2010 U.S. App. LEXIS 24984, at (Fed. Cir. Dec. 8, 2010) (internal citations omitted). 20

21 Potential IP Issue: Patents and the Cloud Patent Portfolio Development - Claim Drafting While acknowledging the difficulty of proving infringement of claims that must be infringed by multiple parties, this court has noted that such concerns can usually be offset by proper claim drafting. A patentee can usually structure a claim to capture infringement by a single party.... This court also observes that in addition to initially structuring a claim to capture infringement by a single party, patentees may be able to correct a claim that can only be infringed by multiple parties by seeking a reissue patent. Akamai, 2010 U.S. App. LEXIS at

22 Potential IP Issue: Patents and the Cloud 35 U.S.C. 102(g): Conception/Reduction to Practice and Territoriality Reduction to practice in the United States requires that the invention be embodied in tangible form in the United States, not simply reported. Scott v. Koyama, 281 F.3d 1243, 1247 (Fed. Cir. 2002)). Hypothetical inventors in non-wto countries using the cloud 22

23 Potential IP Issue: Patents and the Cloud Inadvertent Prior Art Publication Public knowledge Impact of America Invents Act of 2011 First to file One year grace period for inventor disclosures 23

24 Conclusions Cloud computing s growth is rapid: $46B in 2008; $58B in 2009; approx. $68B in 2010 (per Gartner) IP issues will grow (10 vs. 750) Additional Legal issues 24

25 BEIJING BRUSSELS CHICAGO DALLAS FRANKFURT GENEVA HONG KONG LONDON LOS ANGELES NEW YORK PALO ALTO SAN FRANCISCO SHANGHAI SINGAPORE SYDNEY TOKYO WASHINGTON, D.C. THANK YOU Peter H. Kang, Esq. Sidley Austin LLP 1001 Page Mill Rd., Building 1, Palo Alto, CA

26 THANK YOU! BEIJING BRUSSELS CHICAGO DALLAS FRANKFURT GENEVA HONG KONG LONDON LOS ANGELES NEW YORK PALO ALTO SAN FRANCISCO SHANGHAI SINGAPORE SYDNEY TOKYO WASHINGTON, D.C. Copyright 2011 Peter H. Kang, Sidley Austin LLP. Notice: The materials presented herein are intended for the educational use and informational purposes of the seminar participants only and are not intended to and do not constitute legal advice. Transmission of the information herein is not intended to create, and receipt does not constitute, an attorneyclient relationship, and these materials are not intended to nor do they create an attorney-client relationship with Sidley Austin LLP. The materials presented are summaries of particular developments in the law and are not intended to be exhaustive discussions. Because of their summary nature, they should not be relied upon in reaching a conclusion in a particular area. The views expressed herein are current, personal views, and should not be attributed to and do not necessarily represent the views of Sidley Austin LLP or any of the Firm s former, present, or future clients. If you have a particular legal problem, please consult counsel. All rights reserved. pkang@sidley.com

27 Cloud Computing: Intellectual Property Legal Issues PART TWO Brian E. Mitchell Mitchell + Company Law Offices San Francisco, CA

28 IP Enforcement Challenges Jurisdictional Issues Subpoenas Privilege 28

29 Jurisdictional Issues Where does data actually physically reside? Which government(s) and court(s) have jurisdiction over the data? Which party has responsibility for the data? Notice to the data owner of geographical issues 29

30 Jurisdictional Issues: International Data Protection Laws Differing national data protection regimes EU Data Protection Directive Prohibits transferring personal information to countries lacking same level of protection for EU residents (e.g., U.S.). The Security Rule re Electronic Protected Health lh Information under the federal Health Insurance Portability and Accountability Act (HIPA)) 30

31 Potential Legal Issues: Subpoenas Potential issue with a third party subpoena served on a cloud service provider The cloud service provider has control over the electronic data and client files Theoretically, could respond to a subpoena by producing documents, data, and information to which h the client legitimately i l has objections Risk of overbroad disclosure and waiver 31

32 Potential Legal Issue: Privilege Customers attorney client communications may be electronically shared with their cloud service providers (and their subcontractors) Potential legal issue as to whether there is an argument for a finding of waiver of privilege 32

33 Trade Secrets Trade secret means information that is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Uniform Trade Secrets Act, 1(4). A public disclosure of a valuable trade secret will destroy its value Potential legal issue raised by the sharing or distribution of confidential information with cloud service providers and subcontractors Issues with regards to inadvertent disclosure 33

34 Trademark Issues Conflicting Rights: An increasing number of trademarks and trademark applications incorporating the term cloud computing Will invariably lead to trademark issues relating to genericness, secondary meaning, and infringement/likelihood of confusion Priority: Difficulties determining the senior user in a particular geographic region when the trademark is used in the context of a cloud based service 34

35 Copyright Issues Potential legal question as to whether a work that exists solely in the cloud is sufficiently fixed in a tangible medium of expression for copyright purposes Extraterritoriality issues: For example, is copied computer software infringing US copyright law if it is stored on a cloud server overseas? 35

36 Bonus Material: Use by Lawyers Lawyers are increasingly turning to cloud based solutions Common examples include online data storage (e.g., g Dropbox), Internet based (e.g., Gmail), and software as a service. SaaS commonly includes a variety of services such as law practice management applications, document management, timekeeping, and bll billing (e.g. Freshbooks). 36

37 Ethics/Security Concerns Many state bars, bar associations, and the ABA are discussing ethics and security concerns One of an attorney's foremost duties is to protect client confidentiality. Some concern has been expressed about placing client files and other confidential information in the cloud. But counter argument: Files and other date stored in the cloud can be more secure than on a typical attorney's laptop, asthe cloud based services often employ encryption measures and multiple redundant backups. 37

38 Lawyer s Duties TheABA Commission on Ethic's 20/20 Working Group on the Implications of New Technologies has identified three duties implicated by cloud computing Model Rules 1.1 (competency), 1.6 (duty of confidentiality), 1.15 (safeguarding client property) 38

39 Confidentiality Issues TheABA Commission has identified a number of confidentiality issues with respect to lawyer s use of the cloud. However, many of these issues exist in contexts independent of the cloud, including outsourcing and use of contract lawyers and staff. 39

40 Solution Most opinions and papers conclude that concerns are best addressed d when, as stated by the ABA, Lawyers [ ] take reasonable precautions to ensure that their clients confidential information remains secure As a further example, the Arizona Barspecifically gives its approval to cloud computing, so long as lawyers use reasonable precautions to safeguard client security and confidentiality. (Bar Opinion 09 04). 40

41 Solutions (Cont.) However, Lawyers should be aware of limitations in their competence regarding online security measures and take appropriate actions to ensure that a competent review of the proposed security measures is conducted. As technology advances over time, a periodic review of the reasonability of security precautions may be necessary. (Bar Opinion 09 04) 04). 41

42 Conclusions Cloud computing s growth is rapid: $46B in 2008; $58B in 2009; approx. $68B in 2010 (per Gartner) IP issues will grow (10 vs. 750) Legal issues 42

43 Q&A and Wrap Up p Comments from the audience Q&A Final words THANK YOU! 43

44 Brian E. Mitchell 4 Embarcadero Center, Suite 1400 San Francisco, CA (415) (Office) (415) (Facsimile) brian.mitchell@mcolawoffices.com com 44