Month: April 2020

Categories
CPIP Roundup

CPIP Roundup – April 30, 2020

Greetings from CPIP Executive Director Sean O’Connor

Sean O'Connor

As we move into another month of stay-at-home here in the DMV—and perhaps some re-openings—we here at CPIP hope that you and yours are staying safe and healthy while we weather this crisis.

We continue to move forward, however. Our biggest news this month is the addition of Joshua Kresh as our new Deputy Director. Most recently an IP attorney at DLA Piper, he has worked at other major firms and is active in policy and new lawyer training with AIPLA and the Giles Rich Inn of Court. Joshua brings with him a patent-rich legal background, and he’ll be a valuable asset to the CPIP team and mission. We look forward to working with him and hope you wish him the best as he takes up this new role.

Like many other schools and organizations, Scalia Law School and CPIP have moved online for the time being—but that doesn’t mean we’ve stopped forging ahead and navigating new challenges. Because all George Mason University onsite events have been cancelled through August 8, we’ve moved our much-anticipated Music Law Conference back to September 10-11, 2020. We greatly appreciate the flexibility and understanding of every single person involved, not least our special guest and keynote speaker, Rosanne Cash. We hope you can still join us for the event in the fall—and, if you were unable to make the April dates, we hope this postponement works to your benefit!

CPIP’s main event this summer, the WIPO-CPIP Summer School on Intellectual Property for this coming June 8-19, 2020, has moved online as a virtual program via WebEx. CPIP primarily will serve participants in the Americas, although we’ll also be welcoming a number of attendees from other parts of the world who have opted to stay with the U.S.A. program.

As of March, I joined the Board of Directors for The Circle Foundation, an organization in the Republic of Korea that supports innovation and entrepreneurship to strengthen the start-up ecosystem. This new role brings CPIP and Scalia Law School into another level of connection with Mason Korea’s excellent in-country campus and activities.

In April, I was a virtual guest speaker for CPIP Co-Founder—and now University of Akron Goodyear Tire & Rubber Chair of Intellectual Property—Mark Schultz’s WebEx event, Copyright and Social Justice: How the “Blurred Lines” Case Brought Overdue Recognition for African American Artist. The talk was co-sponsored by the Black Law Students Association and the Intellectual Property and Technology Law Association. Also in April, I gave a virtual presentation to admitted Scalia Law prospective students on Cannabis: Creating a New Regulated Economy.

CPIP and our colleagues have remained productive over these past weeks, from rescheduling events to publishing timely pieces. My article Distinguishing Different Kinds of Property in Patents and Copyrights—based on an early presentation at CPIP’s Annual Fall Conference—was published in the George Mason Law Review, and my recent op-ed, Avoiding Another Great Depression Through a Developmentally Layered Reopening of the Economy, appeared in The Hill. I was interviewed on WBAL for this piece as well. Finally, CPIP along with many other organizations from around the world signed onto an open letter to WIPO’s Director-General for World IP Day.

This past month and a half have undoubtedly been difficult. At CPIP, our thoughts go out especially to all creators and innovators who are facing new challenges as they strive to protect their livelihoods and intellectual property in this difficult time. We truly hope this May brings improvements, both locally and globally. Stay well, safe, and sane.

CPIP Welcomes Joshua Kresh as Deputy Director

Joshua Kresh

CPIP is proud to welcome Joshua Kresh to our leadership team! As Deputy Director, Joshua will report to CPIP Executive Director Sean O’Connor while managing and participating in CPIP’s day-to-day operations. Joshua will oversee CPIP’s academic research, policy, and fundraising efforts, working as well on planning and executing CPIP events such as conferences, meetings, fellowships, and roundtables. Joshua will also consult with Professor O’Connor and the other faculty directors to develop CPIP’s long-term academic and policy plans.

Before joining CPIP as Deputy Director, Joshua was an Associate with DLA Piper in Washington, D.C., where he practiced patent litigation. He received his law degree with honors from The George Washington University Law School, and he holds master’s and bachelor’s degrees in computer science from Brandeis University. Joshua is the Chair of AIPLA’s New Lawyers Committee and Co-Mentoring Chair of the Giles Rich American Inn of Court, and he is a registered patent attorney with the U.S. Patent and Trademark Office.

To read the rest of our announcement, please click here.

Music Law Conference with Rosanne Cash Moved to September 10-11, 2020

Rosanne Cash

We are excited to announce that the music law conference, The Evolving Music Ecosystem, which will be held at Antonin Scalia Law School in Arlington, Virginia, has now been moved to September 10-11, 2020. The keynote address will be given by Rosanne Cash, and it features two days of panel presentations from leading experts.

This unique conference continues a dialogue on the music ecosystem begun by CPIP Executive Director Sean O’Connor while at the University of Washington School of Law in Seattle. In its inaugural year in the D.C. area, the conference aims to bring together musicians, music fans, lawyers, artist advocates, business leaders, government policymakers, and anyone interested in supporting thriving music ecosystems in the U.S. and beyond.

For more information, and to register, please click here.

Registration Open for WIPO-CPIP Summer School on IP on June 8-19, 2020

WIPO Summer School flyer

CPIP has again partnered with the World Intellectual Property Organization (WIPO) to host the third iteration of the WIPO-CPIP Summer School on Intellectual Property from Antonin Scalia Law School in Arlington, Virginia, on June 8-19, 2020. Registration is now open, and we recommend that participants apply early, as we expect the program to be full. In order to accommodate the global response to COVID-19, we have moved the course online this year.

The course provides a unique opportunity for students, professionals, and government officials to work with leading experts to gain a deeper knowledge of IP to advance their careers. The course consists of lectures, case studies, simulation exercises, group discussions, and panel discussions on selected IP topics, with an orientation towards the interface between IP and other disciplines. U.S. law students can receive 3 hours of academic credit from Scalia Law!

For more information, and to register, please click here.

Spotlight on Scholarship

a pair of glasses, an apple, and a stack of books

Sean M. O’Connor, Distinguishing Different Kinds of Property in Patents and Copyrights, 27 Geo. Mason L. Rev. 205 (2019)

In this paper from our Annual Fall Conference, CPIP Executive Director Sean O’Connor explores the different meanings of “property” with respect to patents and copyrights. Prof. O’Connor explains that, contrary to the current conventional wisdom, the purpose of protection in early modern Europe was to incentivize public disclosure and commercialization, not private creation. To demonstrate this, he traverses the evolution of different kinds of property, including private knowledge, ad hoc grants of rights, rights in goods that embody intellectual property, and contractual assignments or licenses. Prof. O’Connor then describes how confusion over these different kinds of property has lead people to talk past each other in intellectual property debates, and he argues that a more nuanced understanding of the various property interests at stake might enable more constructive engagements going forward.

Charles Delmotte, The Case Against Tax Subsidies in Innovation Policy, 48 Fla. St. U. L. Rev. ___ (forthcoming)

In this paper from our Thomas Edison Innovation Fellowship, Charles Delmotte of NYU Law assesses the proposal for replacing intellectual property rights with tax subsidies for research and development (R&D) firms. Dr. Delmotte explains that innovation scholarship neglects economic insights on efficiencies, such as how information problems prevent the efficient operationalization of tax subsidies since innovation outcomes turn on unpredictable market processes that cannot be steered in advance. Turning to public choice theory, Dr. Delmotte points out that tax subsidies are particularly susceptible to diversion by the rent-seeking behavior of the politically affluent, and relying on economic realism, he argues that the best way to promote innovation is by securing stable intellectual property rights that undergird the background institutions that facilitate competition and entrepreneurship.

Activities, News, & Events

a lit lightbulb hanging next to unlit bulbs

In a new CPIP policy brief entitled The End of Patent Groupthink, CPIP Senior Fellow for Innovation Policy Jonathan Barnett highlights some cracks that have emerged in the recent policy consensus that the U.S. patent system is “broken” and it is necessary to “fix” it. Policymakers have long operated on the basis of mostly unquestioned assumptions about the supposed explosion of low quality patents and the concomitant patent litigation that purportedly threaten the foundation of the innovation ecosystem. These assumptions have led to real-world policy actions that have weakened patent rights. But as Prof. Barnett discusses in the policy brief, that “groupthink” is now eroding as empirical evidence shows that the rhetoric doesn’t quite match up to the reality. This has translated into incremental but significant movements away from the patent-skeptical trajectory that has prevailed at the Supreme Court, the USPTO, and the federal antitrust agencies.

We have several new posts on the CPIP blog, including the first installment of our new series on recent copyright law developments. In a post entitled Copyright Notebook: Observations on Copyright in the Time of COVID-19, CPIP Director of Copyright Research and Policy Sandra Aistars discusses several current copyright cases and issues, including how artists, authors, and copyright industries have taken unprecedented steps to bring enjoyment to our circumscribed lives. We published a similarly hopeful piece entitled IP Industries Step Up in This Time of Crisis on how bio-pharma industries and scientific publishers have made crucial information and materials available when they are needed the most. CPIP Director of Communications Devlin Hartline published a piece entitled Supreme Court Paves Way for Revoking State Sovereign Immunity for Copyright Infringement that looks at the Supreme Court’s decision in Allen v. Cooper. And CPIP Senior Fellow for Life Sciences Erika Lietzan published a piece entitled The Tradeoffs Involved in New Drug Approval, Expanded Access, and Right to Try on the various issues with approving new medicines.

CPIP Senior Scholar Kristen Osenga joined Professors Greg Dolin and Irina Manta in filing an amicus brief urging the Supreme Court to grant certiorari in Celgene v. Peter. The issue on appeal is one that was left unresolved in Oil States v. Greene’s Energy, namely, whether retrospective applications of inter partes review (IPR) proceedings under the 2011 American Invents Act are unconstitutional takings. The brief argues that, for several reasons, the Federal Circuit below reached the wrong conclusion in holding that they are not unconstitutional. First, IPRs are significantly different than ex parte and inter partes reexaminations, since patentees are not free to amend claims in order to resolve claim scope ambiguities. Second, empirical research shows that the economic impact of such IPRs is to devalue patents and chill investment. Finally, the cases relied on by the Federal Circuit to support its conclusion are inapposite or outdated. The amicus brief was featured in a recent article at IPWatchdog entitled Amici Urge Supreme Court to Grant Celgene’s Petition on Constitutionality of Retroactive IPRs.

Categories
C-IP2 News

CPIP Welcomes Joshua Kresh as Deputy Director

Joshua KreshCPIP is proud to welcome Joshua Kresh to our leadership team! As Deputy Director, Joshua will report to CPIP Executive Director Sean O’Connor while managing and participating in CPIP’s day-to-day operations. Joshua will oversee CPIP’s academic research, policy, and fundraising efforts, working as well on planning and executing CPIP events such as conferences, meetings, fellowships, and roundtables. Joshua will also consult with Professor O’Connor and the other faculty directors to develop CPIP’s long-term academic and policy plans.

“We are thrilled that Joshua is joining us as we expand CPIP further into innovation and international policy. Joshua’s extensive background in IP, as well as in computer science and bioinformatics, position him ideally to strengthen our tech and patent research,” said Professor O’Connor. “We also expect to leverage his policy and outreach work with AIPLA and the Giles Rich American Inn of Court to connect with the new generation of IP lawyers,” he continued.

Before joining CPIP as Deputy Director, Joshua was an Associate with DLA Piper in Washington, D.C., where he practiced patent litigation. He received his law degree with honors from The George Washington University Law School, and he holds master’s and bachelor’s degrees in computer science from Brandeis University. Joshua is the Chair of AIPLA’s New Lawyers Committee and Co-Mentoring Chair of the Giles Rich American Inn of Court, and he is a registered patent attorney with the U.S. Patent and Trademark Office. He previously served on the Intellectual Property Committee for the U.S. Court of Federal Claims Advisory Council.

About CPIP

The Center for the Protection of Intellectual Property (CPIP) is dedicated to the scholarly analysis of intellectual property rights and the technological, commercial, and creative innovation they facilitate. CPIP explores how stable and effective property rights in innovation and creativity can foster successful and flourishing individual lives and national economies.

Through a wide array of academic and public policy programming, CPIP brings together scholars, industry leaders, inventors, creators, and policymakers to examine foundational questions and current controversies concerning patents, copyrights, and other intellectual property rights. Ultimately, CPIP seeks to promote a healthy academic discussion, grounded in rigorous scholarship, and a well-informed public policy debate about the importance of intellectual property.

For more information about CPIP, please visit our website at: https://cip2.gmu.edu

Categories
Copyright

Copyright Notebook: Observations on Copyright in the Time of COVID-19

the word "copyright" typed on a typewriterThe Indomitable Spirit of Artists

Heroes are everywhere. We all give thanks for the selfless efforts of medical professionals, first responders, delivery drivers, gig economy workers, grocery and pharmacy staff, and the many other individuals who daily place themselves at the center of the coronavirus pandemic in order to make our quarantined lives safe and manageable. Now with working-from-home days blurring into nights and weeks rolling by in an undifferentiated haze, artists, scholars, and the industries that work with them are taking unprecedented steps to bring color, life, and knowledge to our circumscribed lives. Theatrical release movies are streaming to homes, operas and Broadway productions are available on the websites of shuttered arts venues to enjoy for free, bands are playing online gigs, authors have devised ways to make their works available for online enjoyment and distance learning in a myriad of settings, and scholarly publishers and newspapers are making relevant news reporting and research about the coronavirus free to users.

This should not be terribly surprising. Authors and artists of all varieties have always nurtured deep community roots. They are the very types of entrepreneurs and independent businesses who–alongside shop owners and local services–undergird our towns and cities and contribute to our well-being not only through their creativity, but also through their generosity when neighbors seek support. Writing in the New York Times, author David Sax said about the importance of small local businesses:

These are the entrepreneurs who matter now, more than ever. Not the ones on the covers of magazines, not the billionaires and recipients of venture capital checks, whose products we may use, but whose lives are distant and entirely removed from the day-to-day of our communities. If Casper, WeWork or some celebrity’s makeup company doesn’t survive this crisis, the impact on our lives will be negligible. Elon Musk will be fine. But if we lose our barber, the fruit store on the corner or the plumber who saved us in a flood, we will have lost a piece of ourselves.

 

This is the mindset with which I am approaching copyright in the time of COVID-19.

The National Emergency Library

Sadly, unprecedented moves by artists to share their work with the world on lockdown have not dissuaded opportunistic behavior online. Capitalizing on the shutdown, multi-millionaire Brewster Kahle of the Internet Archive, who has long argued for expanding rights to copy and make copyrighted works digitally available without the permission of authors, announced an “emergency” free library of copyrighted works, available to readers without a waiting list. While Kahle’s Internet Archive has been controversial since its inception, this new iteration apparently removes all limits on the number of users who can check out a work simultaneously – essentially turning it into an all-you-can-read free e-book service. This goes beyond even the limitations applicable to brick-and-mortar libraries that offer electronic lending.

Kahle’s opportunistic move did not pass unnoticed, however. Senator Thom Tillis, who as head of the Senate Subcommittee on Intellectual Property is deeply engaged in reviewing and updating U.S. intellectual property policy, promptly penned a letter to Kahle noting:

I am not aware of any measure under copyright law that permits a user of copyrighted works to unilaterally create an emergency copyright act.

 

Tillis is right – making the 1.4 million books Kahle has scanned into his database freely available to an unlimited number of users is inconsistent with current copyright law. Moreover, it is a step towards “losing a part of ourselves,” as Sax so aptly puts it. According to the Authors Guild, the mean income for a professional author is $20,300 annually. Authors are the epitome of the types of breadwinners various government programs should currently be trying to prop up, rather than barons of industry who should be taxed for the welfare of others.

While the Internet Archive has reportedly reached an agreement with the University of North Carolina Press and Duke University Press in the past weeks, this agreement is too little, too late, and it represents a pernicious trend among internet industry advocates to infringe first, seek agreement later. Terms like “efficient infringement” have emerged to describe such behavior.

Internet Archive’s behavior threatens to upend the promise of copyright protection as an invitation to a business negotiation between authors and larger, better resourced associates who wish to acquire rights in their works. Practitioners of so-called “efficient infringement” or “permissionless innovation” blatantly challenge individual authors to sue infringers if they dare, or otherwise to take whatever the infringer is willing to offer. The music industry has called this negotiating-with-a-gun-to-one’s-head approach the reason for the “value gap,” which is seen when comparing license terms among internet services that rely on protections like the Digital Millennium Copyright Act (DMCA) safe harbors to avoid liability for infringement and those services that negotiate for rights in the free marketplace. It is not surprising that lopsided business terms result in cases where infringers are empowered by circumstances or the law to adopt a “sue me” approach instead of negotiating in good faith.

Google v. Oracle

Another example of the “efficient infringement” approach to acquiring intellectual property is seen in Google v. Oracle. This long-litigated case will bring a Supreme Court holding on whether companies can slavishly copy the software code of others in order to save R&D and marketing costs. While this is a battle between industry behemoths, the outcome is important to anyone who relies on copyright protection because Google adopted the “sue me if you dare” approach and is effectively arguing that the bounds of fair use should incorporate instances of intellectual property appropriation to avoid business inconvenience.

This case has cost countless millions of dollars to litigate through two jury trials and two federal appeals and is now before the Supreme Court. If this is the path to enforcing one’s rights, it is clear that individuals and small businesses effectively own rights with no remedies should an infringer with deeper pockets emerge. The case likewise demonstrates how litigation can be inefficient and ill-suited to establishing business norms.

Despite the lengthy record, the case is quite straightforward. As Oracle so plainly put it in its brief:

Google has a problem. It committed an egregious act of plagiarism and now needs to rewrite copyright law to justify it. It cannot.

Java SE was one of the most creative and intricately designed works of software ever written. Its elegance attracted a wide audience of developers. Manufacturers of all sorts of devices and competing platform makers clamored to license the Java SE platform. Innovation flourished, just as the Framers imagined, and just as the rest of the American software industry thrived under those same constitutional incentives.

Google wanted its own platform. Given its vast resources, it could certainly have written one. But with a looming existential crisis, there was no time to innovate. Google could have taken any of the several Java SE licenses Oracle offered, but Google rejected Oracle’s compatibility imperative as inconsistent with its commercial objectives.

So Google opted to plagiarize and take the risk. Google copied 11,330 lines of computer code from Java SE, as well as the intricate organization and relationships among the lines of code. Google put the code in its competing product, Android, and successfully pitched it to Oracle’s customers, generating billions of dollars in revenue.

 

As I (together with other copyright scholars) argued in an amicus brief to the Court:

Congress has addressed the protection of computer software through the Copyright Act, including the code at issue in this appeal. In its 1980 amendments to the Copyright Act, Congress adopted the recommendations of the National Commission on New Technological Uses of Copyrighted Works (CONTU) and recognized computer programs as “literary works” enjoying the full extent of protection under the statute. Even at that relatively early stage in the development of the computer software industry, Congress considered versions of many of the arguments and issues present in this litigation, including whether computer code should be protected as a literary work, the degree to which computer programs can be considered “functional” or necessary “machine-controlled elements” (as opposed to expressive works protectable under the Copyright Act), and the interests of protecting and incentivizing innovation. After careful analysis and debate, CONTU recommended to Congress, and Congress legislated, that computer programs are protected under the Copyright Act with no qualifications that would differentiate software from any other type of literary work under the statute.

Since 1980, software development has grown exponentially, and its application continues to expand into new industries. Congress has amended the Copyright Act to address issues raised by technological advances in particular industries, by enacting, for example, the Computer Software Rental Amendments Act in 1990, the Digital Millennium Copyright Act in 1998, and the Music Modernization Act in 2018. Congress has not, however, amended the Copyright Act to decrease the scope of protection for computer programs or altered the statutory standard for fair use. Because the statutory protections for computer software remain the same as for all other creative works, adopting Google’s position would amount to a judicially created, software-specific amendment. It would also result in singling-out the protections afforded to computer programs, which contradicts the plain text of the Copyright Act.

Google and its amici try to characterize this as “efficient infringement,” or “permission-less innovation.” Yet its conduct is entirely contrary to the goals of copyright law as expressed in the Copyright Act or the Constitution. As a result, there is no reason to incorporate these considerations into fair use. It is clear that purposeful copying to avoid business inconvenience is not fair use, either in the statute as enacted or as interpreted by courts. Although Google casts its theory as “software-specific,” there is no reason why infringing parties could not regularly use it to justify copying any kind of protectable expression. Thus, to expand the fair use doctrine in the way Google advocates would set a dangerous precedent not limited to the software industry.

 

The Court has announced that it will begin hearing certain oral arguments by phone during the pandemic shutdown, but Google v. Oracle is not (yet) among those cases. As of April 13, 2020, the case was postponed to the October term.

One final (but somewhat different because it involves a state) recent example of an entity acting on the principle of “efficient infringement” occurs in the case of Allen v. Cooper. This case raises state sovereign immunity as a defense, but the underlying fact pattern is hauntingly similar.

Allen v. Cooper

The Supreme Court ruled in Allen v. Cooper that it violates state sovereign immunity to expose state entities to liability for alleged copyright infringement, absent the state’s consent.

As covered by Devlin Hartline here on the CPIP blog, the case involved “both actual and metaphorical pirates.” The actual pirate was Blackbeard, whose ship went down near the North Carolina coast in the 1700s. The metaphorical pirates are the government of the state of North Carolina, which allegedly infringed, then settled, then allegedly infringed again, the copyrighted photos and videos of the wreck shot by underwater photographer Rick Allen. Not content to repeatedly infringe Allen’s work, the state Legislature additionally passed a law deeming all photographs and videos made of North Carolina shipwrecks to be a matter of public record, and thus free for public use. Although Allen claimed that the state had committed willful infringement, the Supreme Court ultimately sided with North Carolina in ruling the Copyright Remedies Clarification Act of 1990 unconstitutional and holding that the Eleventh Amendment prohibits private actions against the state without the state’s consent.

As it stands, this case bodes ill for anyone who makes their living in the knowledge economy. If you create, research, code, write, document, interpret, or otherwise create intellectual work product that a state or state employee deems of value, the state apparently can take your work without permission. Although this is a more definitive statement of the lay of the land than was previously clear (since earlier case law had considered patent infringement, which differs in some relevant ways from copyrights), it is not altogether unexpected. Nevertheless, state infringements of copyright have been a growing problem. In the twenty years since the Fifth Circuit opined in Chavez v Arte Publico Press that there was no significant problem of copyright infringement by the states enabled by the Eleventh Amendment, more than 150 copyright infringement cases have been filed against states.

Unfortunately, the Court ruled that the CRCA was unconstitutional in its abrogation of state sovereign immunity because it did not properly link the CRCA to the prevention of unconstitutional injuries like the deprivation of property under Section 5 of the Fourteenth Amendment of the U.S. Constitution. Although Allen lost his appeal, the Supreme Court all but invited new legislation by Congress:

Congress likely did not appreciate the importance of linking the scope of its abrogation [of state sovereign immunity rights when it passed the CRCA] to the redress or prevention of unconstitutional injuries—and of creating a legislative record to back up that connection. But going forward, Congress will know those rules. And under them, if it detects violations of due process, then it may enact a proportionate response. That kind of tailored statute can effectively stop States from behaving as copyright pirates. Even while respecting constitutional limits, it can bring digital Blackbeards to justice.

 

Until Congress returns to normal business and can take this matter up, there are a few issues any potential drafters of new legislation should bear in mind.

First, as the Court explained, it will be important to link any new statute abrogating state sovereign immunity to the redress or prevention of unconstitutional deprivations under Section 5 of the Fourteenth Amendment. This means limiting any new legislation to violations of the Due Process Clauses of the Constitution. Next, it will be important to create a legislative record noting the scope of the problem justifying the proposal, given the Fifth Circuit’s comments in Chavez, which failed to recognize the volume of lawsuits being filed against states for copyright infringement.

It is also wise to articulate some of the numerous reasons why state remedies are inadequate to deal with the infringements of copyright by states or their instrumentalities. Because federal copyright law preempts state law, and copyright matters are tried only in federal courts, there are no plausible avenues for states to create novel, recognizable causes of action for infringement under their own laws. Moreover, in addition to the federal doctrine of state sovereign immunity, states are typically also immune from suit in their own jurisdictions; thus, there are not likely to be any state common law-created remedies. Because states are in the best position to articulate and demonstrate the adequacy of state remedies, if any, the burden of doing so should rest with the state.

Finally, it is worth considering that only federal law can provide the uniform protection against state infringements that authors require in order to publish their works. Thus, Congress should not delay acting to take up the Court’s invitation to bring state digital Blackbeards to justice.

Reflecting on the above cases and controversies as I cozy up to my laptop or sign into a virtual meeting, I am at once thankful for the technology that allows me to connect to others and to keep working, and fearful for my friends and clinic clients who are facing existential challenges to their livelihoods. These cases, similar to many before them, illustrate how intertwined we all are as users and creators of works. It is my hope that we all will use this quieter time to contemplate how interconnected we truly are, and that we will emerge from quarantine to embrace the spirit of the oft-heard virus slogan “we are all in this together.”

Categories
Copyright Innovation Patents Pharma

IP Industries Step Up in This Time of Crisis

the word "inspiration" typed on a typewriterThe global COVID-19 pandemic has challenged multiple aspects of modern society in a short time. Health and public safety, education, commerce, research, arts, and even basic government functions have had to change dramatically in the space of a couple months. Some good news in all this is the response of many companies in the intellectual property (IP) industries: they are stepping up to make sure crucial information and materials are available to speed research and development (R&D) towards vaccines, therapeutics, and medical devices. This blog post gives a sampling of the current initiatives facilitating the best innovative work the world has to offer.

Bio-pharmaceutical companies

Bio-pharmaceutical (bio-pharma) companies have been leading the charge, collaborating with academic and government partners to advance vaccine and therapy candidates on a fast track. While there have been isolated stories of some IP-related issues for rapid deployment and use of medical devices such as ventilators, the overall message is clear that research, development, and deployment have not been hindered by IP rightsholders. In fact, problems for distribution of medicines, personal protective equipment, and medical devices have little to do with IP rights but rather with hoarding and nationalistic impulses by governments.

Examples of rapid response are abundant. In February, the Department of Health and Human Services and its Biomedical Advanced Research and Development Authority (BARDA) partnered with the Janssen Research & Development unit of Johnson & Johnson to investigate a promising vaccine candidate. Janssen also committed to invest in the scale-up of production and manufacturing capacities to produce the vaccine candidate if it succeeds through clinical trials. By mid-March, 50 drugs that might fight the virus had been identified by collaborations of hundreds of scientists. Research continues apace and 80 clinical trials are proceeding, some on fast track status including a potential vaccine.

Beyond its core R&D, regulatory, manufacturing, and distribution mission, the bio-pharma industry is providing direct support to many places in need. This includes donations of medical supplies and personal protective equipment (PPE), existing treatments and medicines, and monetary and in-kind support.

At the same time, private incentives are more important than ever to get novel vaccines, drugs, and devices out to the world in safe, efficacious form and at scale. Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, has long recognized that exclusive licenses of IP to bio-pharma industry partners are necessary to get innovative vaccines and drugs to the public:

“We always need a pharmaceutical partner,” [Fauci] told CQ Roll Call in October 2017. “I can’t think of a vaccine, even one in which we’ve put substantial intellectual and resource input, that was brought to the goal line without a partnership with industry. So this is a very natural process that we’re doing right now.”

He argued that for vaccines like Zika, which might predominantly be used in low-income countries, drugmakers don’t see a lot of financial incentive to get involved, which is why the NIH needs to grant exclusive licenses. But he argued that the process hasn’t had an impact on vaccine affordability.

“I have not seen in my experience situations in which we were involved in the development of a vaccine, particularly for low- and middle-income countries that really needed it, where the pharmaceutical companies priced it out of their reach,” Fauci said.

Likewise, as noted innovation scholars Daniel J. Hemel and Lisa Larrimore Ouellette point out in a recent article, Innovation Policy Pluralism, multiple vectors of public and private incentives and resources work together to advance pioneering innovation. Even in countries with a national health or single payer system, the government health program does not manufacture vaccines, drugs, or devices. Instead, it relies on private firms that in turn work closely and well with public and academic researchers to identify pressing problems, locate relevant basic science advances, and then translate those into actual vaccines, therapies, or devices.

The myth of patients and the public “paying twice” for bio-pharma innovation arising from public-private partnerships is pernicious. It conflates the distinction between basic science research and drug or vaccine candidates, on the one hand, with compounds that can be produced at scale, distributed safely, and that have passed arduous clinical trials to demonstrate safety and efficacy. In the United States, private companies must foot the entire bill for these clinical trials, which run into hundreds of millions of dollars over three phases that enroll thousands of subjects. Simply stated, publicly funded research does not result in a substance or compound that can be manufactured and distributed as is with no further R&D or clinical trials.

A related myth is that governments should use compulsory licenses and similar mechanisms to bypass IP rights holders in an effort to speed research and delivery of drugs and vaccines—when they emerge—to the public at low to no cost. First, there are important distinctions between compulsory licenses, U.S. Bayh-Dole style march-in rights, and government use under statutory provisions like 28 USC 1498, which we have outlined here. But across all of them, IP rights holders must still be compensated at a fair market license rate. Thus, there are no “savings” of IP royalties that could lower the price of vaccines or drugs. This makes sense as we don’t force manufacturers to produce drugs or vaccines for free. Even the Defense Production Act merely directs production, it does not require manufacturers to produce goods for free.

Finally, even if patents could be disregarded, we should be careful about encouraging “open source” or amateur production of regulated devices like ventilators. While the FDA has authorized some limited modifications of approved ventilators to accommodate the exigencies of COVID-19, this does not create a free-for-all in which wholesale changes or entirely new designs of the device or its components can be used. We need to take care that these modifications or new designs are actually safe and efficacious. Thus, while innovation like that of famed inventor James Dyson is most welcome, it does not actually solve the immediate problem of a shortage of ventilators as national regulators must still test and approve these untested devices for medical use. And at any rate, Dyson is not offering their new ventilators for free, even as they are designed to be produced at lower costs and sell at a lower point price in the market.

Thus, we need the bio-pharma industry more than ever to get through this pandemic. Large established firms and nimble start-ups have the resources and expertise to innovate and produce vaccines, drugs, and devices that will pass regulatory muster for safety and efficacy. Now is not the time to attack the patent system and weaken incentives for full-steam-ahead bio-pharma and medical device R&D.

Scientific publishing

Similar to the bio-pharma companies, publishers have been leading the way in making crucial scientific and technological information widely available in order to help fight the global coronavirus pandemic. An open letter from Kelvin Droegemeier, Director of the White House Office of Science and Technology Policy (OSTP) and member of President Trump’s Coronavirus Task Force, issued the call to arms last month (for example, see here, here, and here). Joined by government science leaders from eleven other countries—Australia, Brazil, Canada, Germany, India, Italy, Japan, Republic of Korea, New Zealand, Singapore, and United Kingdom—the letter called for publishers to make all research and data related to the coronavirus available immediately to the public. Publishers were quick to respond positively to the letter, pointing out that many journals had already been opened up to the public in an effort to support the dissemination of important scientific research and data when it is needed the most.

In the letter, the government science leaders stated: “To assist efforts to contain and mitigate the rapidly evolving COVID-19 pandemic, basic science research and innovation will be vital to addressing this global crisis. Given the urgency of the situation, it is particularly important that scientists and the public can access research outcomes as soon as possible.” The leaders asked the publishers to voluntarily agree to make their coronavirus-related publications, and the data supporting them, immediately accessible in PubMed Central and other public repositories. PubMed Central refers to the digital archive of biomedical and life sciences journal literature at the U.S. National Institutes of Health’s National Library of Medicine. The leaders also requested that the information be made available in both human and machine-readable format to allow for text and data mining using artificial intelligence.

The same day that the government science leaders sent their letter, Maria Pallante, President and CEO of the Association of American Publishers (AAP), issued a statement noting that the organization and its members would be happy to continue doing their part in making the research and data available to the public:

Publishers purposefully and continuously contribute to the advancement of science and medicine by investing billions of dollars in producing and disseminating high-quality, peer-reviewed journal articles. In this urgent and serious environment, we are grateful to the many publishers who are doing their part to communicate valuable discoveries, analyses, and data as quickly as possible, including by making their copyrighted articles pertaining to the virus freely available for public use during this crisis, in both text and machine-readable formats. Many publishers – both commercial companies and nonprofit societies – have been doing so for weeks.

 

Likewise, Elsevier, which specializes in publishing global information on science and health, has taken the lead in ensuring that relevant scientific information is available to the public. Back in January, Elsevier set up its Novel Coronavirus Information Center, offering free health and medical research information on the coronavirus and COVID-19, the disease that is causes. The Information Center is updated daily with the latest research information, including links to nearly 20,000 peer-reviewed journal articles on its ScienceDirect platform that are curated by clinicians and other experts. The information is intended for use by practitioners, such as nurses and doctors, as well by patients and their families. In response to the letter from the government science leaders, Elsevier announced in a press release that same day that the information would be made available to PubMed Central and other publicly funded repositories, including in machine-readable format that could be used for full text and data mining.

Kumsal Bayazit, the CEO of Elsevier, also released a statement that day underscoring Elsevier’s continued leadership on this front and concluding:

In working with the White House to improve the discoverability and utility of this important body of knowledge, we are now making it available to PubMed Central and other publicly funded repositories such as the WHO COVID database for full text and data mining and without any limitations for as long as needed while the public health emergency is ongoing. Through this partnership we hope to help researchers to keep up with the rapidly growing body of literature and identify trends as countries around the world address this global health crisis.

 

Numerous other publishers have stepped up as well. Wiley announced that it “is making all current and future research content and data on the COVID-19 Resource Site available to PubMed Central” and “other publicly funded repositories, such as the World Health Organization (WHO) COVID-19 database and Wellcome Trust.” The Resource Site was set up by Wiley in February in order to ensure rapid, public access to COVID-19 research, and in response to the request of the government science leaders, Wiley is now inputting that information into PubMed Central and other publicly-accessible databases. Likewise, Springer Nature stated: “We have made available, for free, all relevant research we have published and continue to publish, [and] are strongly urging our authors submitting articles related to this emergency to share underlying datasets relating to the outbreak as rapidly and widely as possible.” Other publishers, such as American Chemical Society, PLOS, STM Publishing, IOP Publishing, Emerald Group Publishing, F1000 Research, and eLife Research, have committed themselves to the cause of making their coronavirus research and data available publicly.

It is not just scientific research that is being freely shared by publishers. Textbooks for students affected by the pandemic have been made available as well. Wiley recognized the need “to ensure instructors who need to teach remotely have the necessary tools to help their students,” and it opened up its online textbooks so that instructors “can receive free access for their students for the remainder of the Spring 2020 term.” Barnes & Noble announced that it was joining VitalSource and other leading publishers to provide free online textbooks for students at schools where it operates a campus bookstore. Michael P. Huseby, CEO and Chairman of Barnes & Noble Education, said: “Our top priority remains providing schools and students with solutions during this time of unprecedented disruption, while simultaneously protecting the health and safety of our employees and customers.” Other textbook publishers, including Cengage, Gale, Cambridge University Press, among many others, have done the same in order to make the transition to online learning as smooth as possible by ensuring that students have online access to the textbooks that they need.

Categories
Patents

New CPIP Policy Brief: Barnett on the End of Patent Groupthink

a hand reaching for a shining key hanging among dull keysIn a new CPIP policy brief entitled The End of Patent Groupthink, CPIP Senior Fellow for Innovation Policy Jonathan Barnett highlights some cracks that have emerged in the recent policy consensus that the U.S. patent system is “broken” and it is necessary to “fix” it. Policymakers have long operated on the basis of mostly unquestioned assumptions about the supposed explosion of low quality patents and the concomitant patent litigation that purportedly threaten the foundation of the innovation ecosystem. These assumptions have led to real-world policy actions that have weakened patent rights. But as Prof. Barnett discusses in the policy brief, that “groupthink” is now eroding as empirical evidence shows that the rhetoric doesn’t quite match up to the reality. This has translated into incremental but significant movements away from the patent-skeptical trajectory that has prevailed at the Supreme Court, the USPTO, and the federal antitrust agencies.

Prof. Barnett first looks at how, for the past decade or so, the groupthink about “royalty stacking” and “patent holdup” has led to efforts by the FTC and DOJ Antitrust to limit the enforceability and licensing of standard-essential patents (SEPs) that underlie the global smartphone market. However, this past December, the DOJ and USPTO changed course, saying now that SEP owners should be treated just like any other patent owner and instead expressing concerns about the possibility of “patent holdout” by well-resourced infringers. As Prof. Barnett explains, the theories and stylized models that influenced these federal agencies are now being displaced by empirical data and real-world models that better reflect how the smartphone market actually operates.

Turning to the Supreme Court, Prof. Barnett discusses the overlooked dissent in Oil States by Justice Gorsuch, which was joined by Chief Justice Roberts, in 2018. On the one hand, the Oil States majority continued the Court’s recent spate of cases reflecting the groupthink skepticism towards patents. Justice Gorsuch’s dissent, on the other hand, perhaps reflects a nascent movement among some members of the Court to revisit this conventional wisdom. Prof. Barnett points out other underdiscussed examples of this growing phenomenon within the Court, from cabining the powers of the PTAB in SAS Institute, to questioning the PTAB’s immunization from judicial review in Cuozzo, to finding that federal agencies lack standing to invoke AIA challenges in Return Mail.

Finally, Prof. Barnett addresses the current move away from the old groupthink at the USPTO, where the current leadership has expressed its support of robust patent protection. For starters, empirical evidence has discredited the widely-repeated view that the USPTO is a “rubber stamp” that approves almost all patent applications. As to inter partes reviews (IPRs), Prof. Barnett notes that, early on, institutions and invalidations were the common outcome. While this could support the conclusion that “bad” patents were being struck down, the data is also consistent with the conclusion that the process is sometimes being used opportunistically to invalidate “good” patents. Responding to this concern, recent changes in the examination process, such as the narrower claim construction standard and broader claim amendment opportunities, may enable patentees to survive unjustified validity challenges at the PTAB.

Moving forward, Prof. Barnett suggests that the tide may be turning in the patent policy world as widely shared assumptions behind patent-skeptical groupthink are subjected to rigorous empirical scrutiny. The inescapable truth is that the U.S. innovation economy has flourished while commentators have suggested it should have languished under the supposed burdens of strong patent protection. Prof. Barnett points out that skeptics may have failed to appreciate how robust patents support private incentives to bear the high costs and risks of innovation and commercialization. Current signs of a “redirect” from the old groupthink are a welcome change for preserving the intricate infrastructure that supports a vigorous innovation ecosystem.

To read the policy brief, please click here.