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Computers

Tech Biz Responds to ‘Scalito’


Monday saw a flurry of activity related to the U.S. Supreme Court, with President George Bush nominating Judge Samuel A. Alito Jr. to the high bench, and two court orders related to patent cases released, including one on the long-running Microsoft-Eolas dispute.

President Bush’s previous pick, White House counsel Harriet Miers, withdrew herself from contention to replace retiring Justice Sandra Day O’Connor last week after conservative Republican leaders said they would not support her.

Judge Alito, who has a lengthy judicial record as part of the U.S. Court of Appeals for the Third Circuit, is known as “Scalito” for his perceived similarity to conservative Justice Antonin Scalia. However, he has more of a reputation on moral issues such as abortion and the First Amendment than business and technology, making it difficult for the technology industry to know if he will be an ally on key issues such as privacy, free speech on the Internet, and intellectual property protections.

While he couldn’t recall any Alito rulings related to technology, attorney Richard Neff, who chairs Greenberg Glusker’s Intellectual Property and Technology Group, said “conservative judges tend to be fairly unobjectionable to the tech industry on commercial issues such as strong application of copyright law.”

If Judge Alito is indeed similar to Justice Scalia, that could be both good and bad for tech. In the last term, Justice Scalia was part of the majority opinion in the Grokster case, saying that file-sharing companies could be held liable for encouraging copyright infringement (see Grokster Loses). The Grokster precedent gets into the muddy area of the intent of a technology’s creator, making it unpopular among tech companies.

Grokster Loses

However, in another decision released the same day, Scalia was a dissenter in the Brand X case, which protected cable companies from competition with outside ISPs (See Cable Firms Win Ruling). He was critical of the Federal Communications Commission’s argument that cable modems should be regulated as an “information service” and not a telecommunications service (see Regulating Brand X).

Regulating Brand X

At least one lawyer thinks Judge Alito has a good record on copyright. William Patry of Thelen Reid & Priest told RedHerring.com he’s a fan of Judge Alito’s two rulings over whether or not series of numbers can be copyrighted.

In one of the two opinions he wrote on the case, Judge Alito decided against plaintiff Southco, a company that makes fasteners and latches, saying “the creative spark is utterly lacking in Southco’s parts numbers and [thus] these numbers are examples of works that fall short of the minimal level of creativity required for copyright protection.”

That was the right decision, said Mr. Patry, who wrote a book on the topic that was cited in one of Judge Alito’s opinions. In contrast to many judges, Mr. Patry said, “Judge Alito really has a very mainstream, sound approach [to copyright],” and “did his homework” to make a thoughtful ruling on the case.

Pro-Business?

In terms of business, Judge Alito seems to have a strong record, according to University of Illinois law professor Larry Ribstein.

“Alito has displayed a marked tendency to enforce contracts as written,” Mr. Ribstein wrote on his blog, citing a long list of cases. “He's also obviously aware of the problems that can be caused by lax proof standards and open-ended liability.”

blog

But another business issue could factor in the confirmation process. According to a report by The Philadelphia Inquirer in 2003, Judge Alito was accused of a conflict of interest after refusing an appeal of a lawsuit filed against the Vanguard Group. At the time, he had $390,000 to $930,000 invested in Vanguard mutual funds.

The Philadelphia Inquirer

Judge Alito denied his investment had any influence on his ruling, but a new panel of judges reheard the case. They ended up reaffirming the ruling in which Alito had taken part.

Patent Cases

In other Supreme Court news, the current members of the court said Monday they would not hear an appeal from Microsoft regarding a patent infringement dispute over web browser features.

Microsoft had won an appeal in March in its long-running battle against the University of California and its Eolas Technology spin-off, releasing the Redmond giant from $566 million in damages (see Legal Victory for Microsoft). In that ruling, a federal circuit court sent the case back, saying that the trial court had prevented Microsoft from presenting evidence that called the relevant patent into question.

Those issues were not before the Supreme Court; rather, Microsoft, still afraid of paying out millions in damages, had appealed to ask if it was bound to pay out for software on computers that are made and sold abroad. The Supreme Court declined to hear the case.

However, the Court did say it would hear a patent case regarding medical processes for predicting strokes, heart attacks, and dementia. Laboratory Corp. of America v. Metabolite Laboratories will be heard next year.

Laboratory Corp. of America v. Metabolite Laboratories

The court also asked for the views of the U.S. Solicitor General on Federal Trade Commission v. Schering-Plough, an antitrust case regarding the drug-maker paying to delay generic rivals. In addition, it declined to consider throwing out class action lawsuits against mobile phone makers over unsafe radiation.

Federal Trade Commission v. Schering-Plough