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Supreme Court Passes on Two Cases with Major Tech Implications

The U.S. Supreme Court made some important tech news today by refusing to hear two cases: one about a next generation digital video recorder, and another important patent case.

First, the Court refused to hear Cable News Network Inc. v. CSC Holdings Inc.. CSC, the parent company of Cablevision Systems Corp., had planned to release a second generation DVR. Its customers will be able to record, store, and play television programming on servers owned by the company, rather than having to obtain some sort of box to plug in with all the other home equipment. That would lower the cost and make it easier for more consumers to race past ads.

The media companies argued that Cablevision's new service would illegally copy their programs without a license. A New York federal trial judge agreed in 2007, giving the challengers an initial legal victory. The 2nd U.S. Circuit Court of Appeals, however, overturned that ruling last summer and sided with Cablevision.
With the Supreme Court refusing to hear the case, the Court of Appeals decision is the governing one.

In the other case, Quanta Computer Inc. v. Ricoh Co. Ltd., the question is one of contributory infringement:

First developed in the courts over 130 years ago, this doctrine is now codified in the patent statute, at 35 U. S. S 271(c). The section provides:

"Whoever imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer."

And so, if I make a product and include some part that I know to be a material part of a patented invention, I'm guilty of patent infringement.

Ricoh had sued Quanta for patent infringement. A Federal Circuit court held that the contributory infringement principle could be applied to software. That means if company A includes some piece of software that is specifically designed as a material part of company B's patented invention, then A can be held to have violated B's patent.

That means software-related patent trials could plunge into the world of not just what the software does, but what libraries, modules, lines of code, and what have you do. By the Supreme Court's refusal to act, not only can Ricoh continue its original patent infringement action against Quanta, but virtually all companies shipping software as part of a product will have to take a new look at whether they might be vulnerable to a patent suit.

Gavel image via Flickr user Thomas Roche, CC 2.0.