Burdens of Proof in IP

In a widely-reported development, yesterday the Supreme Court agreed to hear Microsoft Corp. v. i4i Ltd., which challenges the existing framework for assessing the validity of an issued patent.

In a less widely-reported development, yesterday Justice Alito dissented from the denial of certiorari in Harper v. Maverick Recording Co., a case that held a teenager liable for infringing copyrights in a large number of recordings that she downloaded via file sharing technology. Whitney Harper’s chief defense — rejected by the Fifth Circuit — amounted to the proposition that she didn’t know that the music was protected by copyright. Justice Alito points out the incongruity of what amounts to placing a burden of noninfringement on a consumer of digital — i.e., functionally intangible — creative material.

These are two cases, from quite different areas of IP law, where burdens of proof mean a lot.

At Prawfsblawg, Michael Risch has a long and thoughtful explanation of the issues in Microsoft. The basic question in the case is whether the Patent Office’s determinations of patent validity should be entitled to the substantial deference that they enjoy today, when (as is well-known) patent examiners have limited time and limited resources to truly examine patent applications for nonobviousness and novelty — but when it is (also) often all too easy to construct an after-the-fact case for invalidity.  Procedurally, the challenger will have the burden of proof to demonstrate that an issued patent is invalid.  But how much proof needs to be offered?  If the burden is changed (currently, invalidating a patent requires clear and convincing evidence), then it is not clear that more patents will be invalidated.  But it seems likely that many more patents will be challenged.

Justice Alito’s dissent in a copyright case offers a related point.  The details of the copyright issue are completely unlike the details of the patent issue.  Harper argued that she was an “innocent infringer,” and therefore entitled to suffer statutory damages at the minimum end of the range under Section 504(c)(2) of the Copyright Act, because she had no reason to believe that she was infringing copyright.  The Fifth Circuit rejected that argument.  Section 504 is limited by Section 402(d):  “If a notice of copyright in the form and position specified by this section appears on the published phonorecord or phonorecords to which a defendant in a copyright infringement suit had access, then no weight shall be given to such a defendant’s interposition of a defense based on innocent infringement …”  There was no dispute that appropriate notice appeared on “the published phonorecord,” and no dispute (none raised by Harper, apparently) regarding “access.”  So Harper could not avail herself of a Section 402(d) argument.  Under Section 504, the Fifth Circuit focused on Harper’s state of mind.  Harper claimed that she didn’t know that copyright law applies to music downloads.  Since there is no dispute that copyright law does apply to music downloads, and finding her subjective state of mind irrelevant, the Fifth Circuit rejected the defense.

Note, of course, that the usual copyright notice on a “phonorecord” is placed on a material object — a CD, or an LP, or something equivalent.  The definition of “phonorecord” in Secti0n 101 begins, “A material object …”  Yet Harper was not downloading “material objects”; she was downloading sound files.  Those may be “material objects” for certain statutory purposes (fixation, for example, and the reproduction right), but it is doubtful that these are the published “phonorecords” to which the copyright owners affixed notice of copyright. Even if the notice were buried in the digital code, it wasn’t located in a place where an allegedly “innocent” infringer might see it and be deterred from infringing reproduction. 

In effect, the Fifth Circuit’s interpretation of the statute — combining Section 504(c)(2) and Section 402 — treats all downloading presumptively as “non-innocent” infringement, because the downloading defendant has no way to locate a copyright notice except by tracking down the CD or LP version of each downloaded track.  Fail to search,  and you are treated as being put on notice.  Search, and you likely will find the notice.  A burden of proof is placed on the defendant, and the result is — mostly, but not entirely — “so long to innocent infringement.”

Justice Alito picks up on all of this, more elegantly and concisely than I have.   He wrote: 

[A] person who downloads a digital music file generally does not see any material object bearing a copyright notice, and accordingly there is force to the argument that §402(d) does not apply. In such a case, the question would simply be whether the infringer “was . . . aware and had . . .reason to believe,” §504(c)(2), that the downloading was illegal.

Under §504(c)(2), it isn’t clear that many more defendants will walk away from substantial damages as “innocent” infringers. But the path to damages will be cloudier.