Wednesday, June 29, 2005

Grokster: Porting Inducement from Patent to Copyright -- A Buggy Application

In MGM v. Grokster, the Supreme Court ports the application of inducement from the patent platform to the copyright platform. In the process, they expand its functions, distort its features, and add a lot of bugs. The new application has all the elegance of the worst application ever written -- MacWindows.

Grokster starts out just fine with its discussion of what amounts to "inducement" based on established patent law (pp. 17-18). The opinion runs off-track, however, when it assesses the sufficiency of the plaintiff's evidence below to survive summary judgment (pp. 21-22). The opinion outlines three categories of "evidence of intent" to induce infringement.

The first is advertising infringing uses to an identifiable market for infringing uses. That's fine -- that is inducement, plain and simple, and that's all the evidence you need. If you've got it, case closed.

My problem is with the second and third. The failure or refusal to implement filtering tools might, as the Court says, be evidence of "intentional facilitation," but it is not evidence of intentional inducement. If I leave my keys in the car every time I parked it that would be evidence of intentional facilitation, but not evidence of intentional inducement. Similarly, evidence that Streamast and Grokster make money by selling ads based on the volume of mostly infringing uses may prove that defendants intended the infringing use, but it does not prove intentional inducement.

The Court's whole discussion of "intent" is misbegotten. The only thing that has to be intentional is the inducement. See Manville Sales, 917 F.2d at 553 ("The plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringement."); Warner-Lambert, 316 F.3d at 1363 ("To succeed on this theory, a plaintiff must prove that the defendants’ ‘actions induced infringing acts and that [they] knew or should have known [their] actions would induce actual infringement.’"

In short, it is irrelevant that the defendant intended to facilitate infringement; and it is irrelevant that the defendant intended to make money from infringement. The only thing that is relevant is whether the defendant intended to induce infringement; and the only kind of unintentional inducement is inducement to do something that you didn't know was infringement, e.g. an intentional inducement on the mistaken belief that the alleged infringement was fair use. The Federal Circuit Bar Assoc. Model Patent Jury Instructions make this clear:


A person induces patent infringement if he or she purposefully causes, urges or encourages another to infringe a patent. Inducing infringement cannot occur unintentionally. This is different from direct infringement, which, as I've just told you, can occur unintentionally. In order to prove inducement, the patent owner must prove that it is more probable than not that the accused inducer knew of the patent and encouraged or instructed another person to [use a product or perform a process] in a manner that infringes the patent. The patent owner must also prove that it is more probable than not that the other person infringed the patent. A person can be an inducer even if he or she thought that what he or she was encouraging or instructing the other person to do was not an infringement.

[Plaintiff] asserts that [defendant] induced patent infringement.

[Plaintiff] must prove four things by the more probable than not standard:

First, [defendant] encouraged or instructed another person how to [use a product or perform a process] in a manner that you, the jury, find infringes the ___ patent claims.

Second, [defendant] knew of the ___ patent.

Third, [defendant] knew or should have known that his or her encouragement or instructions would likely result in the other person doing that which you find to be an infringement of the ___ patent.

Fourth, the other person infringed the ___ patent.

If, and only if, you are persuaded of each of these four things may you find that [defendant] induced patent infringement.

If I was a judge, I would sustain a relevancy objection to evidence that the defendant permits or profits from infringement. It is clearly prejudicial -- it proves greed; but it does not "make any fact that is of consequence to the determination of the action more probable or less probable." FRE 401.

This is important because the Court is doing more here than simply confusing the issues. It is transforming the law of inducement while pretending only to port its functions and features from the patent platform to the copyright platform. The relevance of evidence that defendants permit and profit from millions of infringing uses simply assumes that all of the infringements were induced by the defendant. I don't remember who told me I could get free music with P2P software, but I suspect it was CNET.COM. Even if 90% of the P2P uses are infringing, something less than .0001% of the infringements were induced by anybody who had anything to do with Streamcast or Grokster.

The Court's theory of inducement holds defendants liable, not just for the infringers the defendants encouraged, but for all the infringers anyone encouraged, as well as the infringers who needed no encouragement at all. This kind of inducement can't be enjoined because it can't be stopped. This kind of inducement holds Grokster liable for inducement because my kids learned they could steal music from their father's lecture about why it's wrong. In fact, it seems clear that the Court's evidence of intentional inducement is built on a foundation of unintended inducements. The defendants are not being held liable for inducement; they are being held liable for a principle of economics -- network effects.

This is too long already, but I can't stop without adding that this is more proof of my pet peeve -- every Supreme Court justice should have at least one law clerk who has twenty years of litigation experience instead of law review editor on his resume.

Tuesday, June 28, 2005

Bad Press

"If the Revolutionary War had been covered the way we're covering this war and people had seen how difficult the conditions are and how badly things were run…people would have tossed it in."

-- Donald Rumsfeld

Memo to: His Majesty King George III
From: Gen. Charles Cornwallis, Your Humble Servant
Re: Bad press

Your Majesty wisely decided to launch the War Against Radical Democracy against the weak and poorly armed American Colonies before it spread throughout the British Empire. Your strategy of Preemptive Attack was even more successful than we imagined, as the Royal Army's occupation of New York and Philadelphia at the Outset of the War was nearly effortless. The Revolutionary Militias disbanded and fled into the Hills, and we suffered few casualties. That Decisive Victory, rightly celebrated by the British press, was followed by Quick Occupation of Important Commercial Centers in Brandywine, Germantown and Monmouth.

The Southern Colonies, as expected, offered little Resistance because our Campaign enjoyed the Broad Public Support of Loyalists, mostly Simple Farmers who are oppressed by Northern Mercantilists. We marched through the South, taking Georgetown and Camden in The Carolina. We took the Ports of Charleston and Savannah, securing the Crown's Supply of Oil ... oil? -- sorry I meant Cotton ... and the Strong Support of Southern Loyalists who depend upon Open Seas for their Trade in African Slaves. The Northern Resistance, a Force of 3000 Men and Boys, dispatched to the South and lead by the Terrorist Commander Horatio Gates, was crushed in Camden where 2300 Revolutionaries were Killed or Captured by the Royal Army. So Many died charging into our Cannon Fire, as if Radical Democracy might be served by Senseless Suicides.

Your Majesty should give little credence to recent Press Reports regarding the difficulties we have encountered recruiting and training a Tory Militia to take over responsibility for the Security and Stable Governance of the Southern Colonies. Although 1000 of Your Loyal Militia were killed at the Battle of Kings Mountain, and we do find it difficult to recruit and train men who are Loyal to the Crown, and Willing to Serve we must Persist at all Cost. Press Reports coming to me from England vastly exaggerate the Strength of the Insurgency. Although lead by Resourceful Terrorists like the One who goes by Swamp Fox (identified as Francis Marion by a Spy in the Enemy Camp), these small disorganized Bands of Guerillas will prove no match for Your Majesty's Highly-Trained and Well-Armed Royal Army. The Members of Parliament who would question the Cost and Purpose of this Just War only encourage our Enemies and must be Ignored if they cannot be Silenced.

We will next take the War Against Radical Democracy to Virginia, and set up camp in Yorktown, before moving against the remnants of General Washington's Army in the North, which is depleted and starving after wintering at Valley Forge. Although the Colonial Terrorists have been joined by Foreigners sympathetic to the goals of Radical Democracy, including that Extremist Brigand the Marquis de LaFayette, you can be assured that Most of Your Majesty's Subjects in the Colonies loathe the French and their Fancy Ways and their Papist Missionaries. Even Leaders of the Revolution, like General Benedict Arnold, have joined our Just Cause rather than ally themselves with Foreign Influences.

In All Events, and in Any Event, and whatever the Timetable for Withdrawal, Your Highness can take satisfaction in knowing that the War Against Radical Democracy is fought, and will be won, in the Far Colonies, rather than on Our Own Doorstep in Europe. We have invested Much Resources and Many Valiant Men who have given their Lives in this Just Cause and for the Great Glory of the British Empire. We must not Toss It In, not as we stand Here on the Verge of a Victory for which Your Majesty will be remembered by Your Loyal Subjects and those Loyal Subjects of Your Royal Descendants, for All Time to come.

Wednesday, June 15, 2005

Common Sense Meets Not Self-Evident

O'Connor writes that "common sense suggests that medical marijuana users may be limited in number and that California’s Compassionate Use Act and similar state legislation may well isolate activities relating to medicinal marijuana from the illicit market, the effect of those activities on interstate drug traffic is not self-evidently substantial." Stevens writes: "The likelihood that all such production will promptly terminate when patients recover or will precisely match the patients’ medical needs during their convalescence seems remote; whereas the danger that excesses will satisfy some of the admittedly enormous demand for recreational use seems obvious."

What Stevens sees as obvious, and O'Connor calls not self-evident, is a question of fact on which the Court has no record, evidence or findings, other than the district court's wholesale adoption of the Congressional findings in the CSA. Those findings were rejected by the Ninth Circuit, not because the evidence proved otherwise, but because "Common sense indicates that the findings related to this specific class of activities would be significantly different from the findings relating to the effect of drug trafficking, generally, on interstate commerce."

The Ninth Circuit emphasized that "Morrison counsels courts to take congressional findings with a grain of salt," and that "'whether particular operations affect interstate commerce sufficiently to come under the constitutional power of Congress to regulate them is ultimately a judicial rather than a legislative question,' and can be settled finally only by this Court." That sounds as fundamental as Marbury v. Madison, but doesn't it presuppose that while Congress might rely on common sense, courts should require evidence?

The dissent finds that "there is simply no evidence that homegrown medicinal marijuana users constitute, in the aggregate, a sizable enough class to have a discernable, let alone substantial, impact on the national illicit drug market –- or otherwise to threaten the CSA regime." The dissent distinguishes Wickard because the Court in that case was able to consider "actual effects" on interstate commerce "after reviewing in detail the picture of the industry" provided by the record. In Raich, according to the dissent, "The Government has not overcome empirical doubt that the number of Californians engaged in personal cultivation, possession, and use of medical marijuana, or the amount of marijuana they produce, is enough to threaten the federal regime."

I'd have thought that the burden on a motion for a preliminary injunction would be on the plaintiff; that the failure to consider actual effects based on a detailed record would be no less glaring if O'Connor was writing for the majority; and if "empirical doubt" isn't an oxymoron, it's surely a novel standard for the grant of extraordinary injunctive relief barring the enforcement of a federal law.

If the dissenters can be criticized for rejecting a Congressional finding because it's "not self-evident[ ]," the majority might have kept in mind that it was reviewing the grant of a preliminary injunction. What "seems obvious" is that the plaintiffs did not meet their burden of establishing a likelihood of success on the merits. But the distance between what seems obvious and what is not self-evident is what trial lawyers like to call a genuine issue of material fact. The Supreme Court should have reversed the Ninth Circuit because the plaintiffs' evidence did not establish a likelihood of success on the merits; but "seemingly obvious" isn't the standard for granting summary judgment -- not even in the Supreme Court.

Why don't we try this case. According to Plantiffs' counsel: "Here there are NO commercial activities of any kind involved, along with ZERO connection to an interstate market." I'd rather be on his side, but even the bad guys deserve a lawyer.

The plaintiffs in Raich were well-chosen. Their illnesses are real and their suffering is severe, and they might well be able to prove that their possession of marijuana involves "no commercial activities of any kind" and "zero connection to an interstate market." However, the constitutional rule plaintiffs advocate would sweep far more broadly. It would effectively allow the state-by-state reclassification of marijuana as a Schedule II drug, allowing in-state cultivation and distribution of marijuana by prescription, under any number of conceivable regulatory regimes. However, if there is any one feature that might be common to 50 different medical marijuana programs, it is the requirement of a doctor's "prescription" (more about that later). We have some experience with the effects of making recreational drugs available by prescription under Schedule II.

Prescription drugs are widely abused. According to the Council of State Governments, more than 6 million people aged 12 or older were current illicit users of prescription drugs in 2002. In 2001, prescription drug abuse and misuse were estimated to impose approximately $100 billion annually in health care costs. According to a 1999 DEA report, "about 2.4 billion prescriptions were written [in 1998], of which approximately 254 million were for controlled substances. Although the quantity which is diverted into the illicit traffic is unknown, these drugs account for over 30 percent of all reported deaths and injuries associated with drug abuse."

Unlike marijuana, prescription pharmaceutical production is centralized and controlled; the supply-chain is heavily regulated -- right up to the point-of-sale. Where's the supply that feeds the demand? Let's focus on one of the Schedule II favorites -– stimulants (Ritalin, Adderall, Concerta).

"It is only a favor thing with friends," Alice said. "I sell pills based on milligrams: $5 for two 17.5 mg. pills or $5 for three 7.5 mg. pills." You can google <Ritalin adderall campus> and get dozens of stories in school papers quoting people like Alice and her friends describing the trade in amphetamines on campus; or you can poll a classroom of college students on the illicit use of Schedule II amphetamines during exam week; or you can wade through a dense, fact-packed, footnote-flooded, cautious and understated article by a Harvard Law student who has assembled a lot of evidence in support of her conclusion: "Overprescription of stimulant drugs contributes to third-party abuse by unnecessarily inflating the number of patients with valid prescriptions available for diversion. Overprescription is the problem. Patient diversion and third-party abuse are the consequences." Through the Correct Lens: Understanding Overprescription of Stimulant Drugs, Their Abuse, and Where the Remedies Lie, Marguerite R. Lombardo (Harvard Law School, April 2004).

DEA's numbers paint the same picture: "Most experts claim that the true prevalence of ADHD in the U.S. is about three to five percent. However, ... prescription data and epidemiological studies have identified areas with almost no use of methylphenidate and communities with 10 to 20 percent or more of the student population receiving stimulants for ADHD treatment." According to the DEA, "the increased use of this substance for the treatment of ADHD has paralleled an increase in its abuse among adolescents and young adults who crush these tablets and snort the powder to get high. Abusers have little difficulty obtaining methylphenidate from classmates or friends who have been prescribed it."

Over-prescription of stimulants is enough of a problem to create a vibrant black market even though they have only very limited accepted therapeutic use -- treatment of ADD/ADHD and narcolepsy. The problem, in the words of one student, is that "all you have to do is read a book on ADHD and you know what to tell a doctor.... Now a lot of kids get it by saying they have a problem studying." Or you can run down the 27 symptoms of Adult ADD. If you're a lawyer, you can probably bank one of them -- "Tendency toward being argumentative" -- before you have to start fudging.

There is no reason to believe that marijuana would be less susceptible to overprescription, and at least three very good reasons to reach the opposite conclusion. (Overprescription is not the only cause of diversion, but marijuana is no less likely to be diverted by fraudulent prescriptions, truck heists, and robbery or burglary of pharmacies.)

First, the amphetamines, sedatives and opiates that are available by prescription are by all accounts much more dangerous than marijuana. There is every reason to believe that conscientious doctors are careful about prescribing them, not least because of their exposure to malpractice liability. Many if not all Schedule II drugs cannot be refilled. You need another prescription. But not for medical marijuana in California.

Second, the plaintiffs in Raich base their claim on marijuana's therapeutic applications for relief from nausea and appetite loss; reduction of muscle spasms; and relief from chronic pain; but those conditions do not begin to exhaust marijuana's claimed therapeutic uses, which far outnumber the therapeutic uses of prescription stimulants.

Marijuana's claimed pharmacological benefits might make it almost impossible to find someone whose health and well-being would not benefit from a reliable supply of high-quality marijuana. The anti-emitic and pain relief properties relied upon by plaintiffs suggest applications ranging from morning sickness to carpal tunnel syndrome. The American Alliance for Medical Cannabis includes anxiety disorders, depression, migraines, arthritis, inflammation, and "aversive memories" among the "common medical uses" for marijuana. According to one researcher, "physicians who routinely prescribe Vicodin, Tylox, Prozac, Paxil, Wellbutrin, Ativan, Valium, Ambien, and similar drugs ... might reasonably recommend a trial of [marijuana] instead." Other clinical studies and case reports suggest that it may be useful in treating alcoholism, menopause, bladder dysfunction, asthma, Tourette syndrome, cystic fibrosis, ulcerative colitis, sleep-related apnea, and Alzheimer's disease. There are too many claimed therapeutic uses of marijuana to list them all, but if the diversion of Ritalin and Adderall is our benchmark, we can't overlook the view of the former Director of Marijuana Research for the National Institute of Mental Health, Tod Mikuriya, MD, who claims that its potential applications include Attention Deficit Disorder.

According to Justice Thomas the California Act limits the availability of medical marijuana to “seriously ill Californians," those that "have an illness that cannabis can relieve, such as cancer, AIDS, or arthritis." But the law defines "serious medical condition" to include "any other chronic or persistent medical symptom that either ... substantially limits the ability of the person to conduct one or more major life activities as defined in the Americans with Disabilities Act of 1990 ... [or] if not alleviated, may cause serious harm to the patient's safety or physical or mental health." It took the Supreme Court to decide that carpal tunnel syndrome might or might not be covered by the ADA because its "symptoms vary widely from person to person." Toyota Motor Mfg. v. Williams, 534 U.S. 184 (2002) The availability of medical marijuana to alleviate a condition that may cause serious harm to the patient's safety or physical or mental health" provides even less guidance unless it leaves the decision, like third-term abortions, to the doctor's "best clinical judgment." Doe v. Bolton, 410 U.S. 179 (1973).

Third, the California Compassionate Use Act makes the diversion of marijuana even easier than other Schedule II drugs. A "qualified patient" need only have a doctor's "written or oral recommendation or approval." A written recommendation is much like a prescription, except you don't have to show it to anyone to buy marijuana. An oral approval might be nothing more than an unrecorded non-objection to the patient's own suggestion that he might benefit from trying marijuana for his condition. At least one California case suggests that a "qualified patient" can obtain the approval after he obtains the marijuana.

Thomas emphasizes the availability of a voluntary identification card system that immunizes legitimate users of medical marijuana from arrest and indictment, contending that it facilitates the segregation of the licit and illicit markets. However much the identity card facilitates the purchase and transportation of marijuana, it only facilitates diversion. It doesn't prevent the qualified patient from selling his supply of medical marijuana to recreational users, and going back for more. Plus, you have to prove you're entitled to an identification card, and renew it annually, to avoid arrest and indictment. After an arrest and indictment, you only need to raise a reasonable doubt as to whether you're a "qualified patient."

The basic flaw in the dissent's analysis is the assumption that medical marijuana users represent a distinguishable subset of marijuana users that can be mostly cordoned off from the larger market for recreational marijuana users; and that whatever "seepage" occurs cannot have a substantial affect on the multi-billion dollar interstate market for marijuana. However, the only differences between medical marijuana and recreational marijuana is easier access to the former and criminal liability for the latter.

Anyone caught in possession has every reason to claim that their marijuana is medical marijuana. And all they need for a complete defense is a doctor who won't disagree. O'Connor acknowledges that it is "plausible" that the California statute "might be vulnerable to exploitation by unscrupulous physicians." However, if you're charged with possession all you need is a scrupulous physician who believes that medical marijuana is a plausible treatment for depression; a sympathetic physician whose compassion trumps his scruples; a busy physician who concedes he might not remember; or a recently deceased physician who can't testify. Check the web for Medical Marijuana Doctors.

All of this would make no difference if the diversion of medical marijuana did not have a substantial affect on interstate commerce. Thomas can't see any commerce at all, emphasizing that plaintiffs "neither buy nor sell the marijuana that they consume," and that the Founders could not have contemplated "that 'commerce' included the mere possession of a good or some purely personal activity that did not involve trade or exchange for value." The problem with that premise is that if these plaintiffs did not buy their marijuana, there are thousands of other users of medical marijuana who do. You would have to be wearing blinders, or ruling without a record, to overlook the "commerce" that is not just "substantially affected" but created by the California Compassionate Use Act.

One website, devoted to "Everything you always wanted to know about medical marijuana," lists over 100 "cannabis clubs" in California. Those cannabis clubs are shy about their prices, but they don't give away marijuana. According to an article in the San Diego City Beat, "the cost of an ounce of pot from a cannabis dispensary ($400 on average) is close to its street value." The website devoted to medical marijuana doesn't give away its ad space either. They promise "Over 1.2 Million Patient Hits Every Month" and offer "The Best Rates on the Web" starting at "Only $55." There is plenty of room for a lot of $55 ads on a 900-page website that includes, along with an article touting marijuana's curative properties for herpes, some practical advice: "Cash and Money Laundering - A Primer" ("Ok, so you’ve sold a bunch of weed. What do you do with the money?").

O'Connor insists that "everyone agrees that the marijuana at issue in this case was never in the stream of commerce, and neither were the supplies for growing it." Maybe these plaintiffs aren't very picky about their pot, but if you want a reliable supply of potent marijuana, you'll want to check out the website's listings of vendors selling indoor cultivation systems from all across the country, and marijuana seeds from all around the world ("you always have to remember that you get what you pay for. If you want $25 dollar seeds, you get $25 dollar seeds, But if your looking for good high quality genetics to grow with, you need to start looking at $100 & up on prices").

Even if the commerce at issue is wholly intrastate, that can't end the inquiry into its effect on interstate commerce. O'Connor claims that "marijuana is highly unusual among the substances subject to the CSA in that it can be cultivated without any materials that have traveled in interstate commerce." In her words, that's not self-evident. Without some evidence to the contrary, I'm willing to bet that a resourceful Californian could produce or cultivate methamphetamine, LSD, psylocibin mushrooms, or peyote, without any materials from out-of-state. In a State as large as California, with all of its natural resources, established industries, diverse climates and substantial wealth, I'm not sure that there is much at all that couldn't be produced or cultivated in California without materials that traveled in interstate commerce. Indeed, the very fact that California might support a wholly intrastate market for marijuana, almost any pharmaceutical, and even the health insurance that pays for them, only underscores the effect on interstate commerce of any wholly intrastate market of any consequence at all.

There is plainly "commerce" here. Whether it has a substantial effect on interstate commerce is open to debate. This case called for a holding that was limited to the issue before the Court, and a remand that allowed for the development of a record. That would enable the Court, as in Wickard, to consider the "actual effects" on interstate commerce "after reviewing in detail the picture of the industry" –- or industries in this case, including contraband marijuana import and distribution, pharmaceutical production and distribution, and health insurance underwriting. I'd lay money that the effects on interstate commerce would prove to be substantially beneficial, but substantial nonetheless.

Raich: Liberals and Conservatives Find Common Cause

I get nervous when conservatives and liberals find something they can agree on. The legal commentary on Gonzalez v. Raich has been almost unrelievedly critical, and fundamentally cynical.

Liberals want to legalize pot, and medical marijuana is the achievable camel's nose under the tent; but they believe in strong federal government and equate "states' rights" with slavery and the right-to-life movement. Conservatives supposedly believe in a federal government of limited powers and the preservation of some state sovereignty; but don't for a minute believe that recreational drug use should be legal generally, or deregulated locally.

The original Constitution envisioned States as partners in a system of "dual sovereignty," and while the Founders worried that the feds might try to regulate guns and made sure they couldn't (or thought they did), nobody even imagined that the feds might ever regulate the interstate trade in medicinal elixirs and potions by traveling salesmen driving medicine wagons across state lines. But that original vision of Commerce Clause (captured in the fantasy described in O'Connor's quote from Federalist 45 in the first paragraph of part III, which even Thomas couldn't buy into with a straight face) is just a quaint fairy tale after more than 200 years of ever-expanding, almost unchallenged, and only symbolically limited federal authority, at the expense of state sovereignty, as interpreted by the Supreme Court.

Marijuana should be completely legal, and children should be taught from an early age that it's more fun and much healthier than alcohol; but the idea that the Constitution, as interpreted today, forecloses federal regulation of intrastate production and sale of pharmaceuticals is just plain nuts. Conservatives and liberals joining together in the pretense that this case is about whether a sick old lady has as much right to garden her weed as she does to weed her garden is just plain bullshit.