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Anti-Circumvention Provision of the DMCA Doesn't Excuse Patent Owner's Insufficient Pleadings
A Northern District of California judge granted a motion to dismiss patent infringement claims against Sony. In evaluating a motion for leave to amend the deficient pleadings, the judge did not buy plaintiff’s argument that it was unable to do a sufficient investigation earlier in the case due to the anti-circumvention provision of the DMCA.
In August 2019, Bot M8 LLC, a patent assertion entity, sued three Sony entities for infringement of six different patents in the Southern District of New York, particularly the PlayStation 4 and several games including Uncharted 4. The patents covered subjects ranging from displaying game characters’ sequence of actions (example figure from U.S. Patent No. 7,497,777 below) to server connected gaming devices.
According to Sony, Bot M8 was created just a few months prior to the suit, apparently for the purpose of holding and asserting the patent rights. In October 2019, the S.D.N.Y. transferred the case to the Northern District of California where the primary Sony entity and Bot M8 are headquartered. At an initial case management conference held on November 21, 2019, Judge Alsup ordered Bot M8 to provide an amended complaint by December 5, 2019. Judge Alsup apparently found the allegations lacking. Bot M8 complied and filed an amended complaint. Sony moved to dismiss Bot M8’s amended complaint under Rule 12(b)(6) for failure to state a claim. Judge Alsup granted Sony’s motion as to four of the six patents. Bot M8 moved for leave to amend the already amended complaint after the dismissal, which Judge Alsup denied.
THE DOG ATE MY HOMEWORK
In what seems like a “dog ate my homework” excuse for insufficient pleadings, Bot M8 argued that the anti-circumvention provision of the DMCA prevented Bot M8 from reverse engineering Sony’s products and providing more detail into how the Sony products met each claim element. Judge Alsup’s denial of Bot M8’s motion for leave to amend gives the argument short shrift, partially because Bot M8 had already represented to the court that it had conducted at least some reverse engineering which Judge Alsup had excused “from some unknown violation of law.” Although Bot M8’s excuse didn’t get far with Judge Alsup (and Judge Alsup also takes it to task for failing to provide any legal support for the fear), it does raise the question of whether the DMCA could block a patent owner from fully analyzing potentially infringing products. In short, probably not.
THE ANTI-CIRCUMVENTION PROVISION OF THE DIGITAL MILLENNIUM COPYRIGHT ACT
The DMCA prohibits “circumvent[ing] a technological measure that effectively controls access to a work protected” by copyright, in what is known as the anti-circumvention provision. In Chamberlain Group, Inc. v. Skylink Technologies, Inc., the Federal Circuit held that in order to violate the anti-circumvention provision, there must be underlying copyright infringement. The Federal Circuit was particularly concerned that to hold otherwise would allow copyright owners to prohibit the fair use of copyrighted works by enacting some form of technological access control. However, the Ninth Circuit, where the Bot M8 case is being tried, held in MDY Industries, LLC v. Blizzard Entertainment, Inc. that there does not need to be underlying copyright infringement to violate the anti-circumvention provision. In other words, merely circumventing a technological protection measure itself is enough to find a DMCA violation. The Ninth Circuit did leave open the possibility that fair use could be a defense to a DMCA anti-circumvention violation, but did not decide the issue. There are also some forms of circumvention that are not violations of the anti-circumvention provision, such as reverse engineering technology for interoperability (allowed for in the DMCA) or for security research (through an exception created by the Library of Congress). Neither exception are likely to be applicable to pre-suit investigations.
THE BIG PICTURE
In theory, a patent owner’s circumvention of a technological measure during pre-suit investigation could give rise to some sort of DMCA counterclaim. Thankfully for patent owners, the Federal Circuit has jurisdiction over appeals from patent cases, so a counterclaim in a patent suit would be heard in that forum. The Federal Circuit requires underlying copyright infringement and the patent owner’s research into a potentially infringing product would almost certainly fall under fair use and the patent owner would be in the clear. It is possible that a product owner could sue a patent holder for violating the anti-circumvention provision in the lower courts of the Ninth Circuit completely independently from a patent suit. In that situation it’s unclear which appellate court would have jurisdiction (it could depend on the claims), but if the Ninth Circuit retained jurisdiction over the appeal, I would anticipate that the Ninth Circuit would allow some form of fair use defense for this type of technological circumvention.
Another interesting aspect of Judge Alsup’s order is that both parties apparently failed to correctly identify appropriate rule governing the motion to amend. This is unusual when dealing with experienced patent litigation counsel like those involved in this case. The Northern District of California has Patent Local Rules that govern some aspects of the case, and Defendant believed the motion to be governed by Pat. L.R. 3-6. But those relate to infringement contentions, not pleadings. Plaintiff believed that the motion was governed by the Federal Rules of Civil Procedure 15(a)(2) relating to amended pleadings. This was important because either Judge Alsup would require Defendants show “good cause” to amend the pleadings or Judge Alsup should “freely give leave when justice requires,” a much lower standard. Judge Alsup had set a deadline for further amended pleadings, therefore, he evaluated the request under FRCP 16(b)(4), which requires good case to modify a schedule.