by Lee Gesmer | Jan 19, 2009 | Antitrust
You would think that in a capitalist economy the right of one business to to say to another “I don’t want to deal with you” would be close to sacrosanct. And, you would be right, with qualified exceptions in cases where the party refusing to deal has monopoly power. Even then, the Supreme Court has narrowed the “duty to deal” to fact situations so limited that antitrust liability can be avoided with careful planning.
The two leading Supreme Court cases in this area of the law are Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U. S. 585, 601 (1985) and Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004). Post-Trinko, the consensus of the courts is that “refusal to deal” claims are viable only where there was no voluntary prior course of dealing between the parties, where the monopolist’s conduct increased its short term profits, or where the refusal to deal is used to monopolize an adjacent market.
“Refusal to deal” cases involving Internet companies have been rare, but in a recent decision the 9th Circuit held that exclusionary conduct by MySpace.com, directed at another social networking site, Vidilife.com, did not constitute monopolization under the federal antitrust laws.
Both MySpace.com and Vidilife.com are “social networking” websites. MySpace is very well known, Vidilife site much less so.
Vidilife.com, owned by LiveUniverse, Inc., allows users to post videos on its site. Some of those users embedded their videos in their MySpace web pages (a comon practice on social networking sites). MySpace deleted the videos and references to Vidilife.com. LiveUniverse sued in federal district court in California, charging MySpace with attempted monopolization and monopolization under the federal antitrust laws.
The district court found that MySpace.com’s actions did not constitute an illegal “refusal to deal,” and the 9th Circuit upheld this ruling. At the heart of the 9th Circuit’s ruling is the fact that LiveUniverse did not (and could not) allege a prior course of dealing between the two companies or that MySpace was forsaking short-term profits, as required by Trinko. In addition, the court held that LiveUniverse had failed to adequately allege causal antitrust injury.
There is some back story to this case. LiveUniverse’s CEO, Brad Greenspan, is the the former CEO of eUniverse/Intermix–the company that sold MySpace to News Corp in 2005 for a half-billion dollars. Apparently, there is some bad blood between Greenspan and MySpace.com left over from that transaction, suggesting that MySpace.com may have been acting from personal motives. If so, it was an expensive exercise in ego gratification for both companies.
by Lee Gesmer | Jan 19, 2009 | Technology
The Intellectual Property Colloquium is a very well produced podcast with “A List” judges and academics. The one hour shows are audio (which is the definition of a podcast), and can be subscribed to in iTunes. The current topic is A Conversation with Chief Judge Paul R. Michel. Judge Michel is the Chief Judge of the Court of Appeals for the Federal Circuit.
Other topics include discussions on copyright, privacy and other IP issues.
If you’re a lawyer and you haven’t mastered accessing podcasts, podcasts like this are a message that it’s time you do so. And, it’s much better to listen to this than “Imus in the Morning” while you’re commuting.
by Lee Gesmer | Jan 19, 2009 | Antitrust
I’d been planning to post a short summary of the legal issues in the FTC’s petition to the Supreme Court in the Rambus case, but I’ve noticed that Professor Michael A. Carrier of Rutgers University School of Law has done this, and done it brilliantly in a post published on the Patently-O Blog, so I stand down and defer to him:
In December 2008, the Federal Trade Commission (FTC) filed a petition for certiorari in the Rambus case. There are two central issues in the petition. First, what is the standard of causation needed to connect deceptive conduct with the acquisition of monopoly power? And second, do higher prices in standard-setting organizations (SSOs) present competitive harm? . . . [continue reading]
by Lee Gesmer | Jan 17, 2009 | Courts, Patents
According to the front page of the January 12, 2009, National Law Journal (above the fold), Massachusetts U.S. District Court Judge Patti B. Saris is on the “short list” to be appointed to the Court of Appeals for the Federal Circuit – the so-called “science court” that sits in Washington D.C. and hears patent appeals from all of the U. S. District Courts in the United States.
When it comes to patents, Judge Saris is the “stand out” judge in Massachusetts. She’s shown a liking and a knack for patent litigation, and lawyers who draw her in their patent cases are appreciative. She also is active on “the circuit,” speaking at seminars and events where judges are asked to share their thoughts on patent law issues – in other words, she’s an authority on the subject, and her influence extends far beyond her court room.
The NLJ has an extensive article, the main point of which is that the CAFC, which has 12 judges, is expected to lose as many as half that number to retirements in the next few years. Not only is Judge Saris on the short list of about 10 candidates for the CAFC, but she is one of only three judicial candidates.
Needless to say, it would be a blow to the Massachusetts federal bench if it lost a judge of this caliber, but it would be a great honor and opportunity for Judge Saris.
!["Talkin ‘Bout My [Internet] Generation" and Gatehouse Media says, "Give Us A Break Judge, the Registration is in the Mail"](https://www.masslawblog.com/wp-content/uploads/2009/01/220px-My_Generation.jpg)
by Lee Gesmer | Jan 16, 2009 | Copyright
Some interesting goings on on the copyright front in D. Mass. are worth a brief mention.
First, U.S. District Court Judge Nancy Gertner has ruled that proceedings in the RIAA’s case against Joel Tenenbaum, alleging illegal downloading, may be “webcast” by the Berkman Center. Whether the actual trial will be webcast is undecided as yet, but upcoming in-court motions will be. The audio-visual will be streamed live by the Berkman Center at no charge to viewers. Tune in on January 22nd to see the circus. [Update: the First Circuit held that the trial could not be webcast].
I find the following quote from the decision to be quite humorous:
In many ways, this case is about the so-called Internet Generation — the generation that has grown up with computer technology in general, and the Internet in particular, as commonplace. It is reportedly a generation that does not read newspapers or watch the evening news, but gets its information largely, if not almost exclusively, over the Internet. . . Consistent with the nature of these file-sharing cases, and the identity of so many of the Defendants, this case is one that has already garnered substantial attention on the Internet.
While the Plaintiffs object to the narrowcasting of this proceeding, . . . their objections are curious. At previous hearings and status conferences, the Plaintiffs have represented that they initiated these lawsuits not because they believe they will identify every person illegally downloading copyrighted material. Rather, they believe that the lawsuits will deter the Defendants and the wider public from engaging in illegal file-sharing activities. Their strategy effectively relies on the publicity resulting from this litigation.
Meanwhile, in the Gatehouse Media copyright case against the New York Times, Gatehouse has filed an unopposed motion, asking Judge Young to rule on whether the court has jurisdiction before the copyright registrations for the material in dispute have been issued by the Copyright Office. This is a frequent controversy, and one of interest to copyright lawyers representing plaintiffs whose unregistered works are the subject of infringement – may they proceed with suit, and perhaps a preliminary injunction, or are they bound to wait for the registrations to issue? Apparently, this issue was of enough concern to Gatehouse Media that it filed this brief, collecting and arguing the legal precedents on this issue.
