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Irvine, CA - Law enforcement agencies shut down NinjaVideo, a popular Internet file sharing site, in a recent crackdown on online infringement. The site enabled millions of users to illegally download high-quality copies of movies and television programs.

Authorities working for "Operation In Our Sites," a law enforcement initiative set up last year by the U.S. Immigration and Customs Enforcement (ICE) to "protect consumers by targeting counterfeiting and illegal file sharing over the internet," scored their first convictions with David Smith and Hana Beshara. The NinjaVideo co-founders admitted to earning over $500,000 from donations and advertising in the two years since NinjaVideo became active, and plead guilty to criminal copyright infringement charges. Smith and Beshara also pled guilty to conspiring with other defendants to willfully infringe third party rights for profit. Beshara opined in a public manifesto that her actions fell within a "gray area" of the law, but will be sentenced on both counts at the end of this year and could face a maximum penalty of five years in prison.

ICE continues to task agents with seizing domain names where sites make copyright protected content or counterfeits available to users illegally. As of this month, ICE has seized over 100 domain names, with a recent round of seizures targeting sports streaming sites. However, whether or not criminal prosecution will become a trend remains to be seen.

In a statement before the U.S. House of Representatives, ICE director John Morton claimed that, "Operation In Our Sites was developed with the Department of Justice to respect free speech, to provide due process, and to work within the statutory framework provided to us by Congress. Domain names seized under Operation In Our Sites are seized only in furtherance on ongoing criminal investigations into violations of U.S. federal laws."

San Diego - According to a recent study by NBC, piracy makes up about 25 percent of global internet traffic.

BitTorrent, the free, open-source file-sharing application, is responsible for almost half of the 23.8 percent of the "digital theft" happening on the Internet. According to the study, infringing cyber locker sites made up 5.1 percent and illegal video streaming sites 1.4 percent. Peer-to-peer networks and file-sharing applications accounted for the rest. The unauthorized downloads consist primarily of movies, music, television shows, and video games.

As music piracy skyrocketed on illegal networks, legal alternatives have also flourished. Itunes, launched by Apple in 2003, offers music downloads at $.99 per file. Other sites such as Spotify offer free, advertising-supported streams. Customers who wish to avoid the ads must pay a fee. The music industry admits that the revenue from these legal sites cannot match the revenue from CD sales, but realizes the piracy will never go away.

Similarly, legal movie downloading is now also going mainstream. Legal alternatives and the lawsuits being filed by music and movie companies are likely to slow, but not completely stop, the illegal downloading.

San Diego - Righthaven LLC, a controversial "technology company" which sues unsuspecting websites for copyright infringement of its clients' newspaper articles and photographs, is now targeting The Drudge Report over use of a photo. In addition to suing for monetary damages, Righthaven is reportedly also going after control of The Drudge Report's domain.

The suit, filed in U.S. District Court for Nevada, claims that a November 18 Denver Post illustration titled "Transportation Security Administration agents perform enhanced pat-downs" was posted without permission on The Drudge Report website. Apparently, Righthaven applied with the U.S. Copyright Office to register the copyright in the photograph.

Righthaven's business model has traditionally focused on filing claims against individuals and small business that were more likely to pay a small settlement amount rather than go through the expense and hassle of litigation. To date, Righthaven has filed more than 230 copyright infringement suits and has earned an estimated $320,000 in settlements. There are no warning cease and desist letters sent out. Righhaven goes straight for the jugular by filing the claim.

Many Righthaven critics refer to their litigation tactics as frivolous and part of a shakedown strategy to obtain easy settlements. Righthaven claims that these lawsuits are absolutely necessary to protect the copyrighted works as well as the works for the entire newspaper industry.

The drudgereportarchives.com website states: "Matt Drudge does not own, operate or maintain this archive site. He is not responsible for it in any way." Righthaven lawyers argued back: "At all times relevant to this lawsuit, Mr. Drudge has been and is a direct financial beneficiary of the Drudge Archives website."

Righthaven is suing for $150,000 in damages as well as ownership of the drudge report.com and drudgereportarchives.com website domain names.

Los Angeles - In the ongoing battle to protect their movies from being illegally downloaded, independent film companies are pulling out the big guns...they are suing persons downloading the illegal movies for copyright infringement.

Copyright Attorneys hired by the film companies initiate the litigation by filing complaints against unnamed "Doe" defendants. Then they subpoena the internet service providers of each offending IP address to obtain the names of the file-sharers. To go after the pirates who refuse to settle the initial claim, the attorneys refile the claims against them, this time using the infringer's name. If the infringer still won't settle, the case goes to court.

Due to the small amounts being requisted as damages, long, drawn-out suits are detrimental to both the plaintiff and the defendants. One particular case involving a Minnesota woman, Jammie Thomas-Rasset, still remains unsettled after nearly five years. The cost of litigating the matter seems silly from both sides because it far outweighs any likley settlement amount.

The large majority of defendants are settling when they receive the initial claim. The settlement amounts usually range anywhere from $1,500-$2,500 depending on whether the defendants respond by the due dates.

One problem with this litigation involves the innocent victims operating an unsecured Wi-Fi network. Some pirates have tapped into the Wi-Fi network of unsuspecting people to do the illegally downloading which then points the plaintiffs to the IP address of the unsecured network. Most of the innocent victims are in their golden years and just are not tech savvy enough to secure an open wireless network, let alone have the know-how to install and use BitTorrent, a peer-to-peer file-sharing protocol used for distributing large amounts of data.

Copyright infringement is a serious issue, and so anyone accused of copyright violations should immediately consult with an attorney. If left undefended, a default judgment could issue.

New York City will launch a city-wide advertising campaign to chip away at the consciences of file-sharers. The message: Downloading movies and music without paying for them is a job-killer for the city. The publicly-funded anti-piracy campaign will be seen on taxicabs, busses, in movie cinemas, and on the web.

Katherine Oliver, commissioner of media and entertainment for N.Y.C. insists the costs of running the campaign are minimal because the city is utilizing its own public television stations and bus shelters to spread the message. She also stated the city has too much invested in the different media outlets to ignore the rising costs of illegal file-sharing. According to Oliver's staff, more than 700,000 N.Y.C. jobs are either directly or indirectly involved with the creation of books, films, television and radio and the illegal file-sharing is having a very direct impact on those jobs.

The idea for the anti-piracy campaign evolved when Oliver realized that the street-sales of pirated movies had declined following a crackdown by Mayor Michael Bloomberg with the help of the Motion Picture Association of America in 2007. Although street sales were down, Oliver said illegal file-sharing skyrocketed, making the issue more difficult to police. With music and movies traditionally being the victims of piracy, Oliver said she was surprised to learn that the publishing industry is also being affected. This is due to the recent popularity of downloading digital books to computers and mobile-media devices.

In the video above, comedian Tom Papa performs with actors in a skit. Papa stands behind a table in Union Square offering free videos to pedestrians passing by. He tells them they can have the video for free with one hitch: the sound technician standing behind Papa with a boom microphone will lose her job. The acting pedestrians have different attitudes about the fact.

The average person sharing files probably hasn't given much thought that their actions don't just hurt large corporations and famous artists.

The 9th Circuit recently reversed the Central District of California's ruling that a federal court lacks subject matter jurisdiction over copyright actions initiated after the registration application has been filed but before the copyright has been registered. Cosmetic Ideas, Inc. v. IAC/Interactivecorp., 606 F.3d 612 (9th Cir. 2010). The copyright action at issue was brought by Cosmetic Ideas who alleged in their complaint that in 2005 Defendants began manufacturing and selling a necklace "virtually identical" to their "Lady Caroline Lorgnette" necklace. At the time Cosmetics filed their complaint, they had received the application receipt from the copyright office, but the copyright had not been registered. Because 17 U.S.C. § 411(a) makes copyright registration a prerequisite for a copyright infringement action, the District Court held that it did not have subject matter jurisdiction to hear this action.

The 9th Circuit, relying on the Supreme Court's decision in Reed, reversed and held that incomplete registration does not "restrict a federal court's subject matter jurisdiction." The 9th Circuit determined that the application approach better satisfied the intentions of congress to provide broad copyright protection, maintain an active copyright office, and avoid delays in copyright litigation. The 9th Circuit concluded that receipt of the registration application issued by the Copyright Office is sufficient for a party to proceed with an action for copyright infringement.

The United States District Court for the Southern District of New York recently granted summary judgment in favor of Youtube, Inc., owned by Google, Inc., holding that Youtube qualifies for “Safe Harbor” under the Digital Millennium Copyright Act. Viacom Inc. v. Youtube Inc., 2010 WL 2532404 (S.D.N.Y 2010). The Safe Harbor provision provided by 17 U.S.C. § 512(c) protects online service providers from liability for infringing material posted to websites by users.

Plaintiff Viacom, Inc. claimed that Youtube was aware of and “welcomed” infringing content. Viacom alleged that this content was appealing to users and to Youtube, who generated revenue from advertisements. They claim that thousands of their videos were uploaded resulting in hundreds of millions of views and that Youtube had knowledge of the infringement. However, the court noted that Youtube had an agent designated to remove copyrighted material when given specific notice from the copyright owner. In one business day, Youtube removed nearly 100,000 videos after they were given notice from Viacom. The court explained that the burden is on the copyright owner to provide notice to the service provider. Once that notice has been provided, the burden is on the service provider to remove the content or disable access. The court, in granting summary judgment, held that YouTube sufficiently complied with the law.

Athletic shoe manufacturer Asics Corporation has recently filed suit in the Central District of California against shoe manufacturer Sketchers USA, Inc. alleging trademark infringement, dilution, and related claims. Asics Corp v. Sketchers USA, Inc., Case 8:10-cv-00636-CJC –MLG. Asics alleges that their stripe design is famous and distinctive, and was infringed by Sketchers. Asics registered the stripe design trademark in 1972 and claims to have been using the mark on nearly every footwear product they have produced since 1966.

The complaint alleges that defendant Sketchers USA is currently manufacturing shoes that infringe upon that stripe design. Asics describes the Sketchers shoes as “colorable imitations” of their products. The complaint contains photograph comparisons of over 50 shoe styles produced by Sketchers that are alleged to infringe upon Asics’ stripe design. The Sketchers shoe styles pictured in the complaint, including Sketchers Highnotes, Speedsters, and Boris, have a design on the side of the shoe containing two parallel stripes intersected in the middle with a curved stripe. The Asics design contains two stripes that are somewhat parallel and intersected by two curved stripes. The intersecting stripes on the Asics shoe begin as one stripe and split into two before intersecting the parallel stripes.

According to Asics’ complaint, they brought an action against Sketchers 3 years ago for trademark infringement of the same stripe design that resulted in a settlement. Asics alleges that Sketchers has begun to infringe the same trademark once again. Asics claims to have sent Sketchers a cease and desist letter and is now moving for injunctive relief, damages, and attorney’s fees.

Hershey Co. recently filed a suit for trademark infringement under the Lanham Act alleging that a brownie pan marketed by Williams-Sonoma Inc. infringes on the design of Hershey’s chocolate bar. Hershey’s chocolate candy bars have long been manufactured and sold with their iconic 12 rectangular piece design. The candy bars are divided into 12 rectangular pieces in 4 rows of 3, that can be easily broken off from the bar. Each of the 12 pieces is stamped with the word ‘Hershey’s.’ Hershey’s claims that the brownie pan is designed to make the brownies look very similar to a Hershey’s bar, with 12 rectangular pieces. Williams-Sonoma is marketing the brownie pan as a “Chocolate Bar Brownie Pan” that “creates one large brownie or cake, scored into 12 embossed chocolate bar shapes.” Rather than the word ‘Hershey’s’ stamped on every square, the Williams-Sonoma brownie pan contains the word ‘Chocolate.’

Hershey’s alleges that their design is a famous and iconic image, easily recognizable to consumers. They further claim that consumer confusion will result from sales of the brownie pan, as consumers may believe that the brownie pan and the Hershey’s bar are from the same source. Hershey’s alleges that consumer confusion is already apparent from the comments on the Williams-Sonoma website. Many of these comments allegedly compare the brownies to the Hershey’s candy bar. The pan can be viewed at http://www.williams-sonoma.com/products/chocolate-bar-brownie-pan/.

On April 30, 2010, a jury in the Eastern District of Texas handed down a verdict ordering Newegg, Inc. to pay damages totaling $2.5 million to Soverain Software, LLC. Newegg is the world’s second largest online-only-retailer trailing behind Amazon.com. Soverain Software claimed that three patents were infringed for certain functions of online shopping, including web based sales systems and interactive shopping cart functions.

The jury found that Newegg did not directly infringe any of Soverain Software’s three patents. However, the jury did award damages for indirect infringement of 2 patents. Both patented systems provide for a method of linking the online merchant, buyer, and the payment computer to a sales network. Put simply, once the consumer indicates that they wish to purchase a product, the network sends the message from the buyer computer to the payment computer that identifies the product. Once the order is verified using a cryptic code, the instruction is sent to the merchant computer and the product is shipped. Plaintiff had requested a verdict totaling about $40 million dollars.

The Trademark Trial and Appeal Board recently issued an opinion addressing whether a trademark made up of individual generic terms was eligible for registration on the Supplemental Register. In re Coleman, Inc. Serial No. 77067861. Applicant W.B. Coleman, Inc., filed an application to register the mark ELECTRIC CANDLE COMPANY for its line of light bulbs, lighting accessories (candle sleeves), and lighting fixtures. The examining attorney at the Patent and Trademark Office refused to register W.B. Coleman’s mark, finding that the mark was generic and not entitled to registration, and the decision was ultimately upheld by the TTAB.

To examine genericness, the Trial and Appeal Board determines whether members of the relevant public primarily use or understand the term as referring to the class or category of goods at issue. The examining attorney found that the relevant public understood the mark ELECTRIC CANDLE COMPANY as referring to providers of electric candle goods, but not specifically to W.B. Coleman’s products. The examining attorney offered excerpts from third party websites that used the term “electric candle” to refer to lighting fixtures in general. Because this term identifies a type of business, it must be available to other producers and suppliers of electric candles.

This December the United States Court of Appeals for the Federal Circuit decided a significant case interpreting the false marking provision of United States Patent Law. Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009). The false marking statute at issue prohibits marking an unpatented article with a patent number with intent to deceive the public. The court held that penalties of up to $500 per item that is falsely marked may be issued. This determination that the penalties could be applied per article was made by a “plain language” reading of the statute by the Federal Circuit.

This decision has major potential implications for manufactures and distributors of patented goods. Anyone is able to sue for false marking and can share the damages with the Federal Government. This may lead to increased lawsuits by members of the general public or even plaintiff’s organizations who seek a damages award. Advocates for Forest Group, Inc. argued that the court should apply a flat rate penalty rather than per article penalties, and that allowing a per item penalty would encourage lawsuits by those without a stake in the matter. The court identified this potential problem, however dismissed this argument in favor of the policy of allowing the public to assist in controlling false marking. As a result of this decision, not only may patentees be faced with an increase in costly lawsuits, but they should examine and implement policies to manage their patent marking system to ensure compliance with US Patent Law.

The U.S. Supreme Court heard oral arguments on the Bilski v. Kappos case this week, which reviews the Federal Circuit’s rejection of certain patent claims relating to a method of commodities trading. The justices asked questions on a full range of past inventions including surgical methods, Alexander Graham Bell’s original telegraph, and Morse code.

The court is looking to resolve the “machine-or-transformation test” of patentable subject matter with the “useful-concrete-tangible result test” from State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998). The two tests conflict as to whether a method generally must be tied to a “particular machine” to be patentable. The pending decision potentially affects the validity of countless method patents that have been granted by the U.S. Patent Office.

A transcript of the oral arguments may be found at: www.supremecourtus.gov/oral_arguments/argument_transcripts/08-964.pdf

The Nokia Corporation has filed a Complaint against Apple, Inc. claiming that the iPhone infringes on 10 patents related to wireless mobile technology. Nokia alleges that it contributed to the creation of many of the common wireless standards including GSM, UMTS (3G WCDMA), and wireless LAN standards (802.11). Nokia further alleges that Apple refuses to pay royalties for the rights to use these standards. Nokia claims this gives Apple a “free ride” putting all others in the industry at a competitive disadvantage. Since its introduction, over 17 million iPhones have been sold. With such a large amount of sales, the stage is set for another epic battle in the wireless industry.

Coach, maker of designer handbags, has filed suit against Target alleging that Target is selling handbags that too closely resemble Coach's Ergo handbags. Target did not have immediate comment.