Legal Pad

Apple Board Shakeup Surprises Someone, but Not Lawyers

So when is Parker Brothers going to rename Park Place Google Place, and Boardwalk Applewalk, right?

In your latest Silicon Valley monopoly update, Google CEO Eric Schmidt steps off the Apple board under heat from antitrust regulators. The FTC had been probing whether Schmidt’s role on the board violated the rarely-enforced section 8 of the Clayton Act, which prohibits competitors from sitting on each other’s boards. That’s to prevent them from fixing prices or dividing up the market.

At first Schmidt was defiant, saying Google and Apple’s products didn’t overlap enough for the two to be competitors. But with the introduction of Chrome OS, Google’s new operating system, the two now compete on phones (iPhone and Google Android) on browsers (Chrome and Safari) and operating systems.

Legal Pad called up Sam Miller, the veteran antitrust lawyer at Sidley Austin, to get his take. The only thing that surprised Miller about the resignation was that it didn’t come sooner.

We are shocked, shocked to find the appearance of conflict … after the jump.

Antitrust Problems For Microhoo? Either Way, Google Says 'Bring it On'

Yahoo and Microsoft finally hooked up, like two aging singles after years of on-again off-again flirting. They announced a 10-year search and online ad deal this morning.

The question for armchair lawyers is: Will the government's more trigger-happy antitrust regulators do anything to stop it?

Legal Pad called up Bob Lande, the co-founder of the American Antitrust Institute. Lande said that normally when the second and third leading players in an industry combine like this, regulators jump on the deal. But because both Yahoo and Microsoft are so far behind the top dog, Google, in search advertising, Lande said it shouldn't be a big issue.

"Their basic argument — letting two little guys compete with Google — is a good one," said Lande, who often urges regulators to scrutinize deals. "Normally number two and three cannot merge unless you’re facing a colossus like this one."

Others beg to differ, after the jump.

Google: We Are So Not Antitrusty, Dude.

Dana Wagner, Google’s most antitrustworthy lawyer.

There’s an interesting debate going on between the editor of Wired and Google’s top antitrust lawyer on this question: is free an antitrust problem?

Wired’s Chris Anderson wrote a column saying that all those things Google gives away for free — search, gmail, maps, directory assistance, new cars — should raise antitrust concerns. How’s that? Anderson argues that because of Google’s dominance in the search advertising market, it can subsidize other products and drive competitors out of the market by offering them for free. It’s like the predatory pricing of the big bad Japanese chipmakers in the days of yore, he writes:

The analogy is something like the semiconductor battles of the 1980s, when Japanese companies were accused of "dumping" (selling for under cost) memory chips in the U.S. market to drive out U.S. competitors.

Google’s antitrust gunslinger responds, then we go to a neutral expert.

Facebook CEO Spied With 'Patent Vampire'

The patent paparazzi have arrived!

Silicon Valley gossip rag Valleywag got a nice picture of bratty Facebook CEO Mark Zuckerberg being chatted up by what it refers to as a "patent vampire" — Nathan Myhrvold, he of the ominous and secretive patent-hoarding company Intellectual Ventures.

Feared in Silicon Valley (and not just because his name sounds like he’s a Harry Potter villain), Myhrvold’s company has extracted huge licensing deals from tech companies, including this $120 million one from Intuit in May. So what’re Myhrvold and Zuckerberg up to, besides smiling and oddly sipping on Diet Cokes? We’re guessing that Myhvold has a few patents that the Zuckster's company infringes on …is he making an offer that the Facebook Kid can’t refuse?

— Zusha Elinson

DOJ Quietly Turns Its Eye Toward Google's Books Thingy

Dana Wagner, Google's top antitrust lawyer.

In case you missed it Thursday as you hurried out of the office to purchase your illegal fireworks, the Department of Justice finally confirmed that it’s probing the Google books settlement.

In a letter to New York Judge Denny Chin, the DOJ wrote that it has reviewed public complaints that a settlement allowing Google to digitize millions of books gives the search engine a monopoly on so-called “orphan works.” Those are the books where the copyright owners can’t be found or died a sad, childless death. Even though they obviously weren’t at the table, they were included in the $125 million settlement in the copyright infringement lawsuit filed by authors and publishers against Google. Critics like San Francisco’s own Internet Archive raised a stink earlier this year, pointing out that Google’s unique immunity from any potential lawsuits from the owners of orphan works is a barrier to entry for any other Web site that might want to digitize orphan works.

Google's antitrust chessmaster versus orphans, after the jump.

Rare Sighting: A Spam Master Shows Up in Court

Suing spammers has always been somewhat of a publicity stunt because they never show up in court or pay civil judgments, and it does little to actually prevent your inbox from getting stuffed with black-market “V1AGRRA” offers (you get those too right?). In one of the most famous ploys, AOL raffled off a Porsche it managed to seize from a spammer.

But on Friday David Chiappetta, a Perkins Coie lawyer representing Facebook, miraculously got the spam king himself, Sanford “Spamford” Wallace, to show up in San Jose federal court. What was the magic trick? That would be the threat of criminal charges against Wallace.

The hunter’s field guide to the feral spammer, after the jump.

Microsoft: Semi-secret Scourge of Evil, Monopolistic Corporations!

Microsoft hates Google so much that it’s funding a bunch of law school professors to try and derail the Google books settlement.

Last fall, Google agreed to pay $125 million to authors and publishers to settle a copyright infringement lawsuit over the search engine's efforts to put books online. New York Law School —a hereto unheard-of bastion of legal thought — says that the settlement screws the public, the owners of so-called “orphan works,” and raises anti-trust concerns. In a March 27 letter (.pdf)  to the court, NY Law School says it wants to file a brief opposing parts of the settlement — and, oh yeah, the letter mentions that Microsoft, out of the goodness of its consumer-interest heart, is funding the research for the public good. Right. Has nothing to do with Microsoft’s ongoing (and ironic!) campaign to highlight its rival’s monopolistic tendencies. (A funny anecdote on this from Valleywag today.)

Works get orphaned when, for instance, a childless author dies a lonely death or someone never registers a copyright in the first place. The Google settlement would allow the orphans to be scanned into their online book database and sold with revenues going into a fund that can be claimed by the copyright holders, if they come forward.

The New York Law School folks argue, “Because potential competitors will be unable to make use of orphan works, Google will enjoy exclusive access to a large portion of the market for electronic versions of books. This exclusivity would result in a concentration of market power thereby facilitating actions that violate federal antitrust law.” The law school also argues that the authors of the orphaned works shouldn’t be included in the class settlement because they don’t have a say in the matter.

— Zusha Elinson

Yahoo to dance with unfamiliar devil

At least one Yahoo ain't happy to be stuck in Texas. The Internet company lost a bid to transfer a keyword advertising fight with American Airlines from Fort Worth to San Jose, reports the Houston Chronicle.

It’s a trademark infringement case in which American Airlines accuses Yahoo of selling ads to the airline's competitors that are displayed when Internet users search for "American Airlines" on Yahoo. Google settled a similar case against the airline last summer (try searching for “American Airlines” in Google and see if any competitors’ ads come up now).

And Yahoo really really didn’t want to be in Fort Worth. Yahoo, which is being represented by Morrison & Foerster, appealed all the way to the Fifth Circuit U.S. Court of Appeals after the district court denied Yahoo’s motion to transfer the case back to its home turf in San Jose.

So why was Yahoo so intent on gettin' the heck out of Texas? Find out after the jump.

Boring/Google Suit Lives Up to Its Name

Google is actually not a threat to Boring people, according to a Pennsylvania judge. However, it may be a monopolistic Internet overlord, according to a tiny search engine.

U.S. District Judge Amy Reynolds Hay dismissed a lawsuit by Christine and Aaron Boring, a bucolic Western Pennsylvania couple who claimed Google invaded their privacy by snapping pictures of their home for its Street View project. The couple said that an unmarked Google vehicle rolled up their private driveway and took pictures of their house. At the time, their lawyer, Dennis Moskal, exclaimed that: "If you were sitting in the pool, you'd see a Google vehicle right there close enough to hand them a drink — it's fortuitous that no one was in the pool.”

  Goodbye to a cheesy lawsuit, and an unrelated attack by Microsoft's law firm, after the jump.

Conservatives Can't Muster Votes on Privacy Case

Every so often a case comes along that splits the Ninth Circuit U.S. Court of Appeals almost perfectly along ideological lines. Such a case came today, as arguably the court's seven most conservative judges clamored to rehear a notable workplace privacy case to no avail.

Judges Sandra Ikuta, Diarmuid O'Scannlain, Andrew Kleinfeld, Richard Tallman, Consuelo Callahan, Carlos Bea and N. Randy Smith dissented from the denial of en banc review (.pdf) in Quon v. Arch Wireless, in which a Southern California police department snooped through a SWAT team officer's text messages.

Pointed remarks, after the jump.