E-Commerce Law Week, Issue 511

Overwhelmed by Kudzu, Court Orders End to Surveillance Secrecy

A federal magistrate in Texas has ruled that gag orders compelling telephone companies and Internet service providers not to disclose that they have been served with an order for subscriber records (under the Stored Communications Act (SCA), 18 USC §§ 2701-12) or a pen register or trap/trace order (under the Pen/Trap Statute, 18 USC §§ 3121-27) cannot remain in place indefinitely. The magistrate also ruled that these same orders must not be kept permanently under seal. Citing "the First Amendment prohibition against prior restraint of speech and the common law right of public access to judicial records," the magistrate ruled that the sealing and non-disclosure orders should expire in 180 days, with extensions for another 180 days available if the government certifies that its investigation is still active or makes a showing of "exceptional circumstances."

ISPs Agree to Filter Newsgroups, Websites for Child Porn

New York Attorney General Andrew Cuomo announced on June 10 that Verizon, Time Warner Cable, and Sprint had agreed to block access to child pornography newsgroups and delete child porn websites from their servers. The newsgroups to be blocked were identified in an undercover investigation by the Attorney General's office. According to a press release, this investigation uncovered 88 newsgroups containing pornographic images of minors, and used the "Hash Values" for these images to determine which ISPs were providing access to the files. The press release also stated that the National Center for Missing & Exploited Children (NCMEC) would establish a list of websites to be purged from the ISPs' servers. Finally, the three ISPs also promised to "implement a new system to rapidly respond to user complaints about child pornography" and "collectively pay $1.125 million to fund additional efforts by the Attorney General’s office and the [NCMEC] to remove child pornography from the Internet" as part of their agreement with Cuomo. Also on June 10, France's Interior Minister announced that all service providers in France had agreed to block access to content that contains child pornography or is related to terrorism or racial hatred. According to reports, the French agreement, which is slated to take effect in September, will block sites based on input from Internet users, who will be asked to flag objectionable sites for inclusion in the blacklist.

Supreme Court Rules that Method Patents Are Exhaustible

It's been a rough few years for the Federal Circuit. Since 2003, the Supreme Court has reversed or vacated more than three quarters of the Federal Circuit decisions that it has agreed to review. On June 9, the Supreme Court did it again, ruling unanimously in Quanta Computer, Inc. v. LG Electronics, Inc. that method patents, like patents for apparatuses or materials, can be "exhaustible." Under the exhaustion doctrine, "the initial authorized sale" of an item that "sufficiently embodies" a patent "terminates all patent rights to that item." The Court found that method patents -- which describe operations to make or use a product -- can be "embodied" in a product, just like patents in tangible items. The Court reasoned, in part, that exempting method patents from the exhaustion doctrine would encourage patentees to draft their patent claims to describe a method rather than an apparatus, thereby "shield[ing] practically any patented item from exhaustion." Accordingly, the Court rejected the Federal Circuit's ruling that method patents are never exhaustible.

Questions and comments about E-Commerce Law Week are always welcome.  Please send your feedback to Sally Albertazzie.