Tag: Mark Schultz

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CPIP Roundup

CPIP Roundup – September 30, 2020

 

Greetings from CPIP Executive Director Sean O’ConnorSean O'Connor

As we move through our busy fall season here at CPIP, we are grateful for the efforts of everyone in the George Mason University community keeping us safe and healthy. We are fortunate that in these highly uncertain times, we are still able to focus on what we do best: bringing you the research, impact policy pieces, and programming that you have come to expect.

In the copyright sphere, we were gratified by the success of our postponed—and ultimately virtual—conference, The Evolving Music Ecosystem. Highlighted by an informative and moving fireside chat between singer, songwriter, and author Rosanne Cash and CPIP’s Sandra Aistars, the conference also featured seven panels of academics, industry specialists, and artists who provided invaluable insight into copyright law and the music business, especially in light of 2020’s challenges to the industry. Thank you to all who participated and attended! Videos of the keynote address and panel presentations can be watched here.

CPIP also congratulates Shira Perlmutter on her appointment to Register of Copyrights and Director of the U.S. Copyright Office by Librarian of Congress Carla Hayden. We very much look forward to Ms. Perlmutter’s continued positive impact on the copyright community in her new role.

In the patent sphere, CPIP Senior Fellow for Innovation Policy Jonathan Barnett led our roundtable, Measuring the Value of Patent Licensing. Leading legal scholars, economists, and industry representatives focused on the data collection and methodological approaches to quantifying the full economic benefits of commercializing new innovation through patent licensing models.

Congratulations to CPIP Senior Scholar Erika Lietzan on becoming the William H. Pittman Professor of Law & Timothy J. Heinsz Professor of Law at University of Missouri School of Law and for being named a “Best Lawyer in America” for 2020! We are proud of the many accomplishments of our Scholars!

In the coming month, we are excited to host our Eighth Annual Fall Conference on October 7-8. We are partnering with the National Security Institute (NSI) at Scalia Law School to focus on 5G at the Nexus of IP, Antitrust, and Technology Leadership. We hope you’ll be able to join us! You can see the conference program, confirmed speakers, and register for the virtual event here.

Last, but certainly not least, we are proud of the academic and policy publications of our Scholars, Fellows, and other affiliates. Keep reading to learn about work by Sandra Aistars, Jonathan Barnett, Stuart N. Brotman, Ross E. Davies, H. Tomás Gómez-Arostegui, Devlin Hartline, Chris Holman, Erika Lietzan, and Kristen Osenga.

CPIP Eighth Annual Fall Conference with USPTO Director Andrei Iancu on October 7-8

2021 5G Conference image

CPIP’s Eighth Annual Fall Conference will be hosted virtually from George Mason University Antonin Scalia Law School in Arlington, Virginia, on October 7-8, 2020. The theme this year is 5G at the Nexus of IP, Antitrust, and Technology Leadership. The conference is being co-hosted by the National Security Institute (NSI), and it features a keynote address by USPTO Director Andrei Iancu.

This conference addresses fast-emerging intellectual property (IP), antitrust, and technology leadership issues in the 5G and “Internet of Things” innovation ecosystem. Coverage includes standard-essential patents (SEPs) along with established and emerging markets on a regional and global basis. Speakers are drawn from the academic, industry, and policymaking communities, with an emphasis on using objective fact-based analysis to explore points of convergence among legal, economic, and geopolitical perspectives on the IP and regulatory infrastructures that underlie these critical industries.

Registration closes on Monday, October 5, 2020, at Noon ET, so please register soon! We have 4 hours of Virginia CLE credit pending!

To visit our conference website and to register, please click here.

CPIP Hosts Academic Roundtable on Patent Licensing Valuation

hand under lightbulbs drawn on a blackboard

On September 17, 2020, CPIP hosted an academic roundtable entitled Measuring the Value of Patent Licensing online from George Mason University Antonin Scalia Law School in Arlington, Virginia. The roundtable, which was moderated by CPIP Senior Fellow for Innovation Policy Jonathan Barnett, included leading scholars, economists, and industry representatives.

The sessions focused on the existing methodologies developed to measure IP transactions, the insights achieved so far using those methodologies, and the possibilities for developing more precise methodologies to measure licensing and related transactional activities in the IP marketplace. They also examined the mechanics of IP licensing and transactional markets, how IP transactions generate social value, and the extent to which existing IP legal regimes may impede IP markets.

The Evolving Music Ecosystem Conference with Rosanne Cash

Rosanne Cash

On September 9-11, 2020, CPIP hosted The Evolving Music Ecosystem conference online from George Mason University Antonin Scalia Law School in Arlington, Virginia. The conference featured a keynote address by singer, songwriter, and author Rosanne Cash, and coverage included news articles at Billboard and Mason News. CPIP Senior Scholars Sandra Aistars, Sean O’Connor, and Mark Schultz also participated in the event. We’ve posted a synopsis of each day of the conference here, here, and here.

This unique conference continued 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 aimed 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.

To visit our conference website and to watch the videos, please click here.

Spotlight on Scholarship

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

Tomás Gómez-Arostegui & Sean Bottomley, The Traditional Burdens for Final Injunctions in Patent Cases C.1789 and Some Modern Implications, 71 Case W. Res. L. Rev. ___ (forthcoming 2020)

CPIP Edison Fellow Tomás Gómez-Arostegui of Lewis & Clark Law School and co-author Sean Bottomley have published a draft of their law review article that will be published in the Case Western Reserve Law Review. The article takes an historical look at the first two permanent injunction factors from eBay v. MercExchange, namely, irreparable injury and inadequate legal remedies. The article concludes that equitable principles dictate that the Federal Circuit should recognize that: “(1) an injury it seeks to redress with a final injunction is future infringement itself, not just follow-on harms caused by future infringement; (2) it can presume future infringement from past infringement; (3) it can presume that legal remedies are inadequate to remedy future infringement; and (4) it need not require a plaintiff to show that alternative equitable remedies, like ongoing royalties, would inadequately redress future infringement.”

To read the article, please click here.

Stuart N. Brotman, Intersecting Points in Parallel Lines: Toward Better Harmonization of Copyright Law and Communications Law Through Statutory and Institutional Balance, 26 Rich. J.L. & Tech., no. 3, 1 (2020)

The Richmond Journal of Law and Technology (JOLT) has just published a new article by Professor Stuart Brotman, the inaugural Howard Distinguished Endowed Professor of Media Management and Law and Beaman Professor of Journalism and Electronic Media at the University of Tennessee, Knoxville. The article was supported by a Leonardo da Vinci Fellowship Research Grant from CPIP and the research assistance of recent Scalia Law graduate Samantha Levin. The article traverses the history and development of copyright and communications law, which have historically followed separate paths, and offers potential ways that they can be harmonized to match the current realities of the media marketplace.

To read the article, please click here.

Activities, News, & Events

a lit lightbulb hanging next to unlit bulbs

CPIP Director of Copyright Research and Policy Sandra Aistars has written an article at Law360 (also available on the CPIP blog) about Justice Ginsburg’s copyright legacy, especially as it will affect the impending Google v. Oracle decision. Prof. Aistars has also published her latest Copyright Notebook series post, The Importance of Artists’ Agency, on the CPIP blog. Additionally, the Arts & Entertainment Law Clinic—directed by Prof. Aistars—has continued its academic partnership with the U.S. Copyright Office for the fifth year. This semester, they are supporting the Office’s public meetings to investigate standard technical measures (STMs) that could be adopted to aid and identify copyrighted works and to potentially reduce infringement on digital platforms as envisioned in Section 512(i) of the DMCA. Prof. Aistars and the Clinic students will also co-host an online copyright clinic with WALA and the Copyright Alliance that will feature a live performance by the Rock Creek Kings.

CPIP has published a new policy brief by Professor Ross E. Davies entitled Ebb and Flow in Safe Harbors: Some Exemplary Experiences Under One Old Statute and One New. Prof. Davies teaches administrative law, civil procedure, comparative criminal law, contracts, employment discrimination, legal history, legal profession, and torts at George Mason University Antonin Scalia Law School in Arlington, Virginia, and the policy brief is the product of our two Safe Harbors and Private Ordering in the Creative Industries research symposia that were held in 2019. In the policy brief, Prof. Davies compares and contrasts two seemingly unrelated statutory provisions that are often referred to as “safe harbors”—despite that term not appearing in either statute: the National Labor Relations Act (NLRA) as codified in Title 29, and the Online Copyright Infringement Liability Limitation Act (OCILLA)—otherwise known as Title II of the Digital Millennium Copyright Act (DMCA)—as codified in Title 17.

CPIP Scholars have participated in several speaking engagements this past month. CPIP Senior Fellow of Innovation Policy Jonathan Barnett spoke at the Innovation Alliance’s Recognizing the Growing Economic Impact of Patent Licensing webinar. CPIP Senior Fellow for Life Sciences Chris Holman participated in the Regnier Institute for Entrepreneurship and Innovation Kansas City Region’s Bio-Medical and Healthcare Technology Entrepreneurship Certificate Program. CPIP Senior Scholar Erika Lietzan spoke at IPWatchdog’s The Race for a Coronavirus Vaccine: The Intersection of Science and IP Policy webinar. CPIP Senior Scholar Kristen Osenga presented a draft paper at the Gray Center’s Public Health: Regulation, Innovation, and Preparation research roundtable. And CPIP Director of Communications Devlin Hartline participated in the Music Biz Entertainment & Technology Law Conference.

CPIP Scholars have also written op-eds defending the importance of robust patent protection, particularly for biopharmaceutical inventions in light of the COVID-19 pandemic. At the Huntsville Item, CPIP Senior Fellow for Life Sciences Chris Holman argues that the seizure of patents will only hamper the development of a vaccine to combat the coronavirus: “Eliminating intellectual property protections would not only reduce incentives to develop coronavirus treatments as quickly as possible; they will also destroy the domestic industrial base that could be the key to stopping the next pandemic.” Likewise, CPIP Senior Scholar Kristen Osenga argues at the Nashua Telegraph that taxpayers are getting a great deal with biomedical research: “When new treatments are successful, drug companies make money because we, through insurance, buy those drugs to keep us, or make us, healthy. The government then taxes those profits and invests some of that tax money into new research. Far from ‘paying twice,’ we are getting a great bargain from government spending on basic research.”

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Conferences Copyright

The Evolving Music Ecosystem Conference: Day One Recap

The following post comes from Bradfield Biggers, a graduate of Boston College Law School and Founder & CEO of Timshel Inc., a music fintech company that provides data-driven cashflow solutions to musical artists in Los Angeles, California. This is the first of three posts (see day two recap and day three recap) summarizing our three-day The Evolving Music Ecosystem conference that was held online from George Mason University Antonin Scalia Law School on September 9-11, 2020.

Rosanne CashBy Bradfield Biggers

On September 9-11, 2020, the Center for the Protection of Intellectual Property (CPIP) hosted The Evolving Music Ecosystem conference online from George Mason University Antonin Scalia Law School in Arlington, Virginia. The conference featured a keynote address by singer, songwriter, and author Rosanne Cash.

The past year has seen major changes to the music ecosystem and the laws and policies integral to its viability. For example, while the Music Modernization Act (MMA) provided a much-needed update to the way artists’ creative contributions are recognized and supported in the digital age, debates over royalties, infringement, piracy, and new distribution models remain. Diverse issues surrounding ownership and control of data, music festival arrangements, and the nature of artists’ roles in the gig economy have also made headlines. Despite encouraging steps forward and seemingly unlikely partnerships, arriving at a place of balance in music—where respect for artists and others on the music production side is just as important as facilitating innovative models for listener access—requires more work and cooperation.

This unique conference continued 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 aimed 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.

OPENING REMARKS & INTRODUCTIONS

CPIP Director of Copyright Research and Policy Sandra Aistars opened the conference by noting the aptness of coming together (albeit online) for music during a time when the global COVID-19 crisis has shut down much of the world. Prof. Aistars highlighted how music is a tool for eliciting solidarity during difficult times, and our current global pandemic is no exception. Prof. Aistars described how earlier this year, Italians banded together to play with and for each other from the balconies of their homes during the peak of their COVID-19 national lockdown. She found this brought home the importance of nourishing the music ecosystems that, in turn, nourish our communities.

Prof. O’Connor also wanted to emphasize that The Evolving Music Ecosystem would not be your garden-variety music law and policy conference. Where many music conferences fall into the mold of offering panel after panel of esoteric copyright infringement discussions, Prof. O’Connor wanted this conference to take a holistic approach that covered the entire music ecosystem. And while admitting there would be panels covering the copyright infringement landscape, his intention for this conference was to delve deep into pressing issues for working songwriters, performers, musicians, and other music stakeholders. By aligning with the broader music ecosystem, he hoped this conference would empower not just citywide music ecosystems, but also those spanning the national and the globe.

SESSION 1: IMPLEMENTING THE MUSIC MODERNIZATION ACT

The Music Modernization Act (MMA) is a revolutionary legislative bill that was the result of complex negotiations and compromises among songwriters, publishers, record labels, digital service providers (DSPs), and other music industry stakeholders. The MMA, among other things, set the framework for a new composition database and blanket mechanical licensing system, and designated the Mechanical Licensing Collective, Inc. (MLC) to administer it. Although the MMA was enacted in 2018, discussions of how this licensing system will be implemented continue to be prominent in music industry and academic circles alike. With the MLC beginning to administer blanket licenses under this new licensing regime on January 1, 2021, there is no better time to discuss the implementation of this legislation.

The panel included Danielle Aguirre from the National Music Publishers Association, Adam Gorgoni from the Songwriters of North America, Lisa Selden from Spotify, and Regan Smith of the United States Copyright Office. The panel was moderated by Prof. Mark Schultz of the University of Akron School of Law.

Danielle Aguirre set the stage for the panel by offering background information about how the MLC will administer mechanical licenses as a blanket license and how revolutionary this is in light of the old system of individual licensing. Ms. Aguirre explained that while digital service providers (DSPs), such as Spotify and Google, will fund the MLC, it will be the publishers and songwriters that will actually govern the administration of their royalties. She hopes this separation of funding and administration will align the incentives of DSPs and creators, as well as offer trust and transparency for all music stakeholders. Ms. Aguirre believes that the data quality initiatives and software the MLC is developing internally will allow the MLC licensing system to run as smoothly as possible when it launches at the end of this year.

Regan Smith then offered her perspective from the U.S. Copyright Office. Ms. Smith explained that the MMA created criteria for the MLC to operate, but it also went on to grant the Office discretion to regulate issues or schemes that may arise during the MLC’s implementation that were not contemplated by the MMA drafters. Consequently, the Office has been working with all music industry stakeholders to ensure the MLC comes together smoothly. In addition to the regulatory function, Ms. Smith said that the Office focuses on providing educational programs and materials to educate artists and the public about the MLC.

Ms. Smith was followed by songwriter and Songwriters of North America (SONA) founder Adam Gorgoni, who discussed how the previous licensing regime was unsustainable for artists, spoke on the importance of educating artists about music metadata, and provided insight into how SONA represented artists in the MMA negotiations. Reflecting on the MMA negotiations, Mr. Gorgoni recognized that the legislation was not perfect and that tradeoffs were made, but he was confident that the most important points for artists were included. Ultimately, Mr. Gorgoni found one phrase regarding the creation and negotiation of the MLC to be the most applicable: “Don’t make the perfect be the enemy of the good.” This mantra resonated with rest of the panelists.

Lisa Selden then offered her opinion about the negotiations and implementation of the MMA through the perspective of the licensees. In addition to her work at Spotify, Ms. Selden represents Spotify on the board of directors of the Digital Licensee Coordinator (DLC), which is a nonprofit entity that coordinates and represents the interests of DSPs. The DLC board members include representatives from other prominent DSPs, such as Apple, Amazon, Google, and Pandora. Ms. Selden emphasized the importance of the DLC in relation to the MLC, but she also discussed the challenges of creating a single voice from the diverse motivations of each individual digital DSP.

SESSION 2: THE CHANGING NATURE OF SOUND RECORDING RIGHTS 

The sound recording category of music copyrights has been more limited in some ways than the composition category. Sound recordings received no federal protection before 1972 and then afterwards that protection did not apply to terrestrial radio broadcasts. The recent Music Modernization Act (MMA) extended a measure of protection to pre-1972 sound recordings, while proposed legislation would allow sound recording owners to seek compensation from terrestrial radio stations for public performances of their works similar to the system for digital webcasters and streaming. The panel, moderated by Prof. Steven Jamar of Howard University School of Law, discussed the current state of sound recordings, their curious history under U.S. law, and their future in the digital streaming age.

Producer Mikael “Count” Eldridge of Vertebrae Productions opened the panel with a sobering call for an artist-first focus to music industry discourse. He explained how the media and music industry often marginalizes the financial struggles of individual creators when it focuses purely on the macroeconomics of the touring and recording businesses. He believes this flaunting of aggregate music statistics—driven by the top 1% of artists—misleads the public as to the status of artists’ livelihoods and that this in turn perpetuates the myth that the artists on streaming services could earn a living by simply selling t-shirts and touring. Mr. Eldridge stressed that if we cannot increase streaming subscription fees to increase royalty rates for artists, we will lose the music and voices of thousands of independent artists who provide invaluable political and cultural contributions. He concluded by highlighting that many of these issues for independent artists are tackled in his forthcoming documentary Unsound, for which he is currently curating a lecture circuit tour.

Agreeing with Mr. Eldridge’s push for artist-first discourse, SoundExchange’s Brieanne Jackson gave a brief history of how her organization is empowering the lives of artists with its collection and distribution of digital performance royalties. Ms. Jackson then emphasized how SoundExchange not only fuels the lives of modern artists but was also instrumental in getting legacy artists compensation for their pre-1972 sound recordings. Before the MMA was enacted in 2018, artists prior to 1972 received no federal copyright protection or statutory compensation for their sound recordings. However, due in part to SoundExchange’s advocacy, pre-1972 sound recordings now receive protections under the MMA. Today, SoundExchange continues to push for artist sound recording rights in the U.S. by advocating for the Ask Musicians for Music Act (AM-FM Act), which was introduced to the U.S. House of Representatives in late 2019. Ms. Jackson explained that the AM-FM Act would finally provide sound recording rights owners with compensation when their music is played over terrestrial radio.

Attorney Eric Schwartz of Mitchell Silberberg & Knupp carried forward Ms. Jackson’s conversation of pre-1972 sound recordings by diving into how Congress came to include federal protections in the MMA for pre-1972 recordings, as well as its implications for artists. Mr. Schwartz explained that before the MMA, pre-1972 sound recordings were only protected by state and common law instead of federal law. This meant that while pre-1972 sound recordings did not generate digital performance royalties from streaming companies, rights owners had hoped they could use their state rights to pursue more effective infringement actions for online piracy directly, rather than through the broken notice-and-takedown and safe harbors regime of the Digital Millennium Copyright Act (DMCA). However, once the Second Circuit held that the DMCA safe harbors applied to pre-1972 recordings, artists and policymakers began to pursue a digital performance right for rightsholders, which manifested in the MMA.

Mr. Schwartz next highlighted that recent legislation in Canada, as a result of the United States-Mexico-Canada Agreement (USMCA), and a judgment by the European Court of Justice will provide U.S.-based artists the same rights (e.g., national treatment) that Canadians and EU citizens enjoy in their own territories resulting in significant new payments to American producers and performers from these territories. Lastly, he mentioned that the U.S. Copyright Office has proposed a new rule to allow certain artists to register entire albums of up to twenty songs at once, which will greatly cut down the expense and headache of registering copyrights for multiple works.

The final panelist was Todd Dupler of the Recording Academy, who discussed the implications of the MMA’s new “willing-buyer-willing-seller” standard for rate court proceedings and the introduction of the AM-FM Act. Mr. Dupler explained that before the MMA, the standard used to set the statutory royalty prohibited judges from considering what a licensee might pay for a license in the open market. As a result, this standard prevented artists from receiving just compensation for their work. However, with the MMA’s new standard, judges can consider how the fast-paced technology market values music and what a potential licensee may be willing to pay for using music. Mr. Dupler concluded with highlighting the Recording Academy’s advocacy of the pending AM-FM Act, which would provide artists with an additional source of revenue by creating a performance right in sound recordings for terrestrial broadcasts. Importantly, this sound recording performance right would require the radio industry to finally compensate recording artists for their music. However, Mr. Dupler stressed that if artists are going to pass this transformative legislation, they and the public need to “speak out and speak up.”

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CPIP Roundup

CPIP Roundup – August 31, 2020

Greetings from CPIP Executive Director Sean O’Connor

Sean O'Connor

August has seen the beginning of a highly unusual school year, but I hope everyone is continuing to stay safe. And, since even a pandemic can’t keep the world from having a busy back-to-school month, I’ll keep this month’s note short.

First, we’re gearing up for The Evolving Music Ecosystem conference on September 9-11, 2020. The conference will be held via Zoom and feature a keynote address by singer, songwriter, and author Rosanne Cash. Registration is still open, and we hope you’ll join us!

Second, I’d like to welcome University of Missouri-Kansas City School of Law Professor Chris Holman as CPIP’s new Senior Fellow for Life Sciences. He will be taking over the role from Professor Erika Lietzan of University of Missouri School of Law, who has been supporting CPIP in that capacity for the past year. (Clearly, we have an affinity for the Show-Me State!) We’re excited to have him join us, and by way of an introduction, we encourage you to check out his recent guest column for The Phoenix advocating for protection of new uses for old medicines.

Third, we are finalizing the schedule for our Eighth Annual Fall Conference, to be held via Zoom on October 7-8, 2020. This year’s theme is 5G at the Nexus of IP, Antitrust, and Technology Leadership.

In other news, CPIP Senior Fellow for Innovation Policy Jonathan Barnett is now blogging at Truth on the Market, a platform for academics and economists to discuss various aspects of business law. You can read his inaugural post here. CPIP Senior Scholar Erika Lietzan has been appointed a Public Member at the Administrative Conference of the United States (ACUS), which focuses on improving the administrative process. CPIP Director of Copyright Research and Policy Sandra Aistars spoke this past month on a copyright licensing panel hosted by Artomatic with the goal of informing visual artists about essential aspects of copyright law. It has also been a busy month for CPIP Senior Scholars Kristen Osenga and Mark Schultz—I encourage you to keep reading below to keep up with their recent news!

Registration Closing Soon for Evolving Music Ecosystem Conference with Rosanne Cash on September 9-11

Rosanne Cash

Please join us for The Evolving Music Ecosystem conference, which will be held online from Antonin Scalia Law School in Arlington, Virginia, on September 9-11, 2020. The event features three days of panel presentations by leading experts and a keynote address by Grammy-winning singer, songwriter, and author Rosanne Cash.

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.

Spotlight on Scholarship

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

Kristen Osenga, Patent-Eligible Subject Matter… Still Wielding the Wrong Weapon–12 Years Later, 60 IDEA: L. Rev. Franklin Pierce Center for Intell. Prop. 104 (2020)

CPIP Senior Scholar Kristen Osenga has published a new paper on patent-eligible subject matter at IDEA entitled Patent-Eligible Subject Matter… Still Wielding the Wrong Weapon–12 Years Later. The paper looks at changes to patent eligibility that have developed since Prof. Osenga published an article on the same subject in 2007. At the time, she concluded that the Patent Office was using the “elephant gun” of new guidelines on the “ants” of patent eligibility. In the new paper, Prof. Osenga traverses the Supreme Court’s subsequent Section 101 decisions that drove the courts and Patent Office to continue wielding an “outsized elephant gun” when it comes to patent eligibility. However, she does note that recent activities at the Patent Office and Congress offer some hope that things may be changing for the better.

Mark F. Schultz, The Importance of an Effective and Reliable Patent System to Investment in Critical Technologies (USIJ July 2020)

Venture capitalists pouring money into a small startup has become a sort of new American Dream for many innovators. The success stories of big American companies starting with nothing more than an idea have pervaded their way into pop culture, inspiring TV shows, movies, and the like. However, CPIP Senior Scholar Mark Schultz has released a new report for USIJ entitled The Importance of an Effective and Reliable Patent System to Investment in Critical Technologies showing that this dream may be harder to attain today due to recent shifts that have weakened the patent system and driven away venture capital investment. Our blog post summarizing the report is available here, and you can read the summary at IPWatchdog here.

Activities, News, & Events

a lit lightbulb hanging next to unlit bulbs

On August 5, 2020, CPIP Director of Copyright Research and Policy Sandra Aistars joined Jaylen Johnson, Attorney Advisor at the U.S. Copyright Office, and Kim Tignor, Executive Director at the Institute for Intellectual Property & Social Justice (IIPSJ), for a virtual panel presentation on copyright protection for visual artists that was hosted by Artomatic. The panel focused on explaining key concepts of copyright law pertinent to visual artists and sharing resources that they can use to learn more about the basics of copyright protection. It also touched on common pitfalls among visual artists when it comes to protecting their creative works, including those that befall joint authors, and common misconceptions about fair use. Our blog post summarizing the event is available here.

On August 25, 2020, CPIP Senior Fellow for Innovation Policy Jonathan Barnett published a new essay at Truth on the Market entitled Will Montesquieu Rescue Antitrust? In the post, Prof. Barnett examines recent pressure on state and federal regulators to use antitrust laws against firms that have established market dominance, and he praises the genius of the eighteenth-century philosopher Montesquieu for developing the theory of separation of powers that allows the judiciary to police overly zealous antitrust prosecutors today. Traversing recent—and failed—antitrust enforcement actions, including AT&T’s acquisition of Time-Warner, Sabre’s acquisition of Farelogix, and FTC v. Qualcomm, Prof. Barnett explains how the judicial branch has become an important counterbalance to prosecutorial antitrust overreach that betrays the fundamental objective of promoting the public interest in deterring anticompetitive business practices.

On August 25, 2020, CPIP Senior Scholar Kristen Osenga published an op-ed in the Washington Times entitled If We Want Innovation, Companies Must Be Able To Rely on Patent Law To Protect Their Investments. The op-ed explains the importance of effective patent protection for innovative companies to develop and commercialize their new technologies. In particular, Prof. Osenga praises the recent antitrust victory of Qualcomm over the FTC in the Ninth Circuit, noting that a “race that results in innovation that other companies, and the public, dearly desires is exactly the point of competition.” Prof. Osenga also authored a recent op-ed for the Richmond Times-Dispatch, With Biomedical Research, Taxpayers Are Getting a Great Deal, explaining how the critics are wrong to argue that the government should take control of important biomedical inventions like remdesivir. She was also quoted in a recent article at Bloomberg Law entitled Court Split Over Driveshaft Patent Muddies Eligibility Question about the Federal Circuit’s recent 6-6 split on whether to review an important patent-eligibility case en banc.

Categories
Patent Law

Mark Schultz: Weaker Patent Protection Leads to Less Venture Capital Investment

The following post comes from David Ward, a 2L at Scalia Law and a Research Assistant at CPIP.

a lit lightbulb shatteringBy David Ward

Venture capitalists pouring money into a small startup has become a sort of new American Dream for many innovators. The success stories of big American companies starting with nothing more than an idea have pervaded their way into pop culture, inspiring TV shows, movies, and the like. However, CPIP Senior Scholar Mark Schultz has released a new report for USIJ entitled The Importance of an Effective and Reliable Patent System to Investment in Critical Technologies showing that this dream may be harder to attain today due to recent shifts that have weakened the patent system and driven away venture capital investment.

Background

There has been an ongoing debate in the past two decades about whether patents should be stronger or weaker. Proponents of stronger and more effective patents have made the case that they are more valuable, incentivizing investors and innovators to fund and create valuable innovations. On the flip side, critics of the patent system have stated that stronger patents inhibit innovation since they create a web of restrictions and licenses, inhibiting access to important innovations.

This ongoing debate has resulted in several landmark changes to our patent laws and rules in recent years. Prof. Schultz points out several key changes:

These changes have weakened patents by making them easier to challenge, less accessible for smaller companies, and harder to obtain overall. However, with all these changes, there is now data to explore whether weaker patents really do allow for more innovation as patent critics have contended.

Weak Patents Don’t Attract Funding

The short answer is the data doesn’t support the patent critics’ contention that weaker patents clear the way for more innovation because investors no longer see many patent-intensive industries as a good investment. From 2004 to 2017, the share of funding received in patent-intensive industries dropped from over 50% to about 28%. Prof. Schultz is cognizant of the fact that correlation is not causation, but there is an ever-growing pile of evidence that points to one simple explanation: weaker patents result in less funding for innovation.

Patents and intellectual property are critical to venture capitalists (VCs) who want more certainty of a return on their investments. Pending patents that have a lower chance of being granted or patents that could be challenged at any moment create uncertainty for both the patents’ validity and the future costs of litigation. Hence, the weaker patent laws of recent years have led to a decrease in funding for many patent-heavy sectors.

Prof. Schultz’s report doesn’t just rely on the data to reach this conclusion. It also includes several case studies, surveys, and interviews with innovators and investors alike. Perhaps the most telling is a survey by Prof. David Taylor of SMU Law investigating how recent patent cases changed VC and private equity behavior. Of the 475 investors surveyed, 74% said that patent eligibility is an important consideration in firms’ investment decisions, and 62% said that their firms were less likely to invest if patent eligibility changes make patents unavailable. Almost one-third of investors who knew about recent court decisions said it had affected investment decisions away from biotech, medical devices, and pharmaceuticals.

The data again backs this up, as Prof. Schultz’s report shows that those industries have seen some of the biggest loses in VC funding since 2004. In a world where biotech, medical devices, and pharmaceuticals could quite literally be the most important sectors needing innovation and funding to tackle the COVID-19 pandemic, this is less than ideal. Typically, medical treatments cost hundreds of millions of dollars and have a 10-year road ahead of them. The prospect of reaching the end of the road without being able to protect the investment with a strong and effective patent has spooked many investors to other sectors. As a result, there has been less innovation in live-saving treatments, and more of a focus on safer, quality-of-life investments.

Looking Ahead

There is some trend in the positive direction, however. Prof. Schultz notes that USPTO Director Andrei Iancu has demonstrated strong support for the role of patents in the economy with several policy changes aimed at strengthening patent protection. It is also of note that many policymakers are realizing the changes have gone too far, and there are now several pending legislative proposals aimed at fixing these issues. These realizations, coupled with Prof. Schultz’s quantitative and qualitative data, paint a clear picture that all but proves a single point: strong patents promote innovation more than weaker patents. In the words of Prof. Schultz: “Society needs its most successful people working on its most compelling problems. The patent system should support such work.”

To read the report, please click here.

Categories
Copyright

Scalia Law Students and CPIP Scholars Make an Impact in Copyright Office Section 512 Study

the word "copyright" written on a typewriterThe U.S. Copyright Office released its long-awaited report on Section 512 of Title 17 late last week. The Report is the culmination of more than four years of study by the Office of the safe harbor provisions for online service provider (OSP) liability in the Digital Millennium Copyright Act of 1998 (DMCA). Fortuitously, the study period coincided with the launch of Scalia Law’s Arts and Entertainment Advocacy Clinic. Clinic students were able to participate in all phases of the study, including filing comments on behalf of artists and CPIP scholars, testifying at roundtable proceedings on both coasts, and conducting a study of how OSPs respond to takedown notices filed on behalf of different types of artists. The Office cites the filings and comments of Scalia Law students numerous times and ultimately adopts the legal interpretation of the law advocated by the CPIP scholars.

The Office began the study in December 2015 by publishing a notice of inquiry in the Federal Register seeking public input on the impact and effectiveness of the safe harbor provisions in Section 512. Citing testimony by CPIP’s Sean O’Connor to the House Judiciary Committee that the notice-and-takedown system is unsustainable given the millions of takedown notices sent each month, the Office launched a multi-pronged inquiry to determine whether Section 512 was operating as intended by Congress.

Scalia Law’s Arts and Entertainment Advocacy Clinic drafted two sets of comments in response to this initial inquiry. Terrica Carrington and Rebecca Cusey submitted comments to the Office on behalf of middle class artists and advocates, including Blake Morgan, Yunghi Kim, Ellen Seidler, David Newhoff, and William Buckley, arguing that the notice-and-takedown regime under Section 512 is “ineffective, inefficient, and unfairly burdensome on artists.” The students pointed out that middle class artists encounter intimidation and personal danger when reporting infringements to OSPs. Artists filing takedown notices must include personal information, such as their name, address, and telephone number, which is provided to the alleged infringer or otherwise made public. Artists often experience harassment and retaliation for sending notices. The artists, by contrast, obtain no information about the identity of the alleged infringer from the OSP. The Office’s Report cited these problems as a detriment for middle class artists and “a major motivator” of its study.

A second response to the notice of inquiry was filed by a group of CPIP scholars, including Sandra Aistars, Matthew Barblan, Devlin Hartline, Kevin Madigan, Adam Mossoff, Sean O’Connor, Eric Priest, and Mark Schultz. These comments focused solely on the issue of how judicial interpretations of the “actual” and “red flag” knowledge standards affect Section 512. The scholars urged that the courts have interpreted the red flag knowledge standard incorrectly, thus disrupting the incentives that Congress intended for copyright owners and OSPs to detect and deal with online infringement. Several courts have interpreted red flag knowledge to require specific knowledge of particular infringing activity; however, the scholars argued that Congress intended for obvious indicia of general infringing activity to suffice.

The Office closely analyzed and ultimately adopted the scholars’ red flag knowledge argument in the Report:

Public comments submitted by a group of copyright law scholars in the Study make a point closely related to the rightsholders’ argument above, focusing on the different language Congress chose for actual and red flag knowledge. They note that the statute’s standard for actual knowledge is met when the OSP has “knowledge that the material or an activity using the material on the system or network is infringing” or “knowledge that the material or activity is infringing,” while the red flag knowledge standard is met when the OSP is “aware of facts or circumstances from which infringing activity is apparent.” This difference, the copyright law scholars argue, is crucial to understanding the two standards: while the statute uses a definite article—“the”—to refer to material or activity that would provide actual knowledge, it drops “the” to speak more generally about facts or circumstances that would create red flag knowledge. “In Congress’s view,” the comment concludes, “the critical distinction between the two knowledge standards was this: Actual knowledge turns on specifics, while red flag knowledge turns on generalities.”

 

The Office went on to state that “a standard that requires an OSP to have knowledge of a specific infringement in order to be charged with red flag knowledge has created outcomes that Congress likely did not anticipate.” And since “courts have set too high a bar for red flag knowledge,” the Office concluded, Congress’ intent for OSPs to act upon information of infringement has been subverted. This echoed the scholars’ conclusion that the courts have disrupted the balance of responsibilities that Congress sought to create with Section 512 by narrowly interpreting the red flag knowledge standard.

Scalia Law students and CPIP scholars likewise participated in roundtable hearings on each coast to provide further input for the Copyright Office’s study of Section 512. The first roundtable was held on May 2-3, 2016, in New York, New York, at the Thurgood Marshall United States Courthouse, where the Second Circuit and Southern District of New York hear cases. The roundtable was attended by CPIP’s Sandra Aistars and Matthew Barblan. They discussed the notice-and-takedown process, the scope and impact of the safe harbors, and the future of Section 512. The second roundtable was held in San Francisco, California, at the James R. Browning Courthouse, where the Ninth Circuit hears cases. Scalia Law student Rebecca Cusey joined CPIP’s Sean O’Connor and Devlin Hartline to discuss the notice-and-takedown process, applicable legal standards, the scope and impact of the safe harbors, voluntary measures and industry agreements, and the future of Section 512. Several of the comments made by the CPIP scholars at the roundtables ended up in the Office’s Report.

In November 2016, the Office published another notice of inquiry in the Federal Register seeking additional comments on the impact and effectiveness of Section 512. The notice itself included citations to the comments submitted by Scalia Law students and the comments of the CPIP scholars. Under the guidance of Prof. Aistars, the students from Scalia Law’s Arts and Entertainment Advocacy Clinic again filed comments with the Office. Clinic students Rebecca Cusey, Stephanie Semler, Patricia Udhnani, Rebecca Eubank, Tyler Del Rosario, Mandi Hart, and Alexander Summerton all contributed to the comments, which discussed their work in helping individuals and small businesses enforce their copyright claims by submitting takedown notices pursuant to Section 512. The students reported on the practical barriers to the effective use of the notice-and-takedown process at particular OSPs. Two problems identified by the students were cited by the Copyright Office as examples of how OSPs make it unnecessarily difficult to submit a takedown notice. Accordingly, the Office called on Congress to update the relevant provisions of Section 512.

Two years after the additional written comments were submitted, the Office announced a third and final roundtable to be held on April 8, 2019, at the Library of Congress in Washington, D.C. The purpose of this meeting was to discuss any relevant domestic or international developments that had occurred during the two prior years. CPIP’s Devlin Hartline attended this third roundtable to discuss recent case law related to Section 512, thus ensuring that CPIP scholars were represented at all three of the Office’s roundtables.

CPIP congratulates and thanks the students of Scalia Law’s Arts and Entertainment Advocacy Clinic for their skillful advocacy on behalf of artists who otherwise would not be heard in these debates.

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
CPIP Roundup

CPIP Roundup – August 29, 2019

Greetings from CPIP Executive Director Sean O’Connor

Sean O'Connor

With a new academic year beginning at Antonin Scalia Law School, the CPIP team continues to build on a productive summer of scholarship, events, and more. Our WIPO-CPIP Summer School on Intellectual Property this past June boasted 70 students from 30 countries for a two-week crash course on the law and policy of IP in order to help advance their careers. And our Fifth Summer Institute in Beaver Creek, Colorado, this past July brought together IP scholars, policy analysts, and professionals in the innovation and creative industries to discuss the current state of affairs and to work on translating ideas into policy.

Looking ahead, we’re getting ready for our upcoming Seventh Annual Fall Conference, which will take place at Scalia Law on October 4. We’ll also be co-hosting the 31st Annual Intellectual Property Section Seminar with the IP Section of the Virginia State Bar on September 20-21 at Scalia Law. We’re thrilled as well that CPIP Director of Copyright Research and Policy Sandra Aistars will continue her work with the law school’s Arts & Entertainment Advocacy Clinic, while I will be focusing more on the patent side as I lead the law school’s new Innovation Law Practicum.

I hope you’ve had a wonderful summer, and I look forward to seeing you at our future events!

Registration Open for CPIP’s Seventh Annual Fall Conference on October 4

CPIP 2019 Fall Conference flyer

On October 4, 2019, CPIP will host its Seventh Annual Fall Conference at Antonin Scalia Law School in Arlington, Virginia. The theme of this year’s conference is The IP Bridge: Connecting the Lab & Studio, and it features keynote addresses by Professor Robert Merges, UC Berkeley, and Maria Pallante, President & CEO of AAP and former Register of Copyrights. 5 hours Virginia CLE, including 1.5 hours Ethics, available!

This unique conference will highlight how IP rights facilitate the creative and innovative processes and preserve the vibrant ecosystems that deliver innovative products and creative works to consumers. In addition to exploring how IP helps to improve and enrich the lives of creators, inventors, and the public, this conference will also discuss how various efforts to impose price controls in the creative and innovation industries threaten established markets and the creation of innovative products and artistic works.

Please click here to register. We look forward to seeing you in October!

Spotlight on Scholarship

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

Kristen Osenga, Institutional Design for Innovation: A Radical Proposal for Addressing § 101 Patent-Eligible Subject Matter, 68 Am. U. L. Rev. 1191 (2019)

In this paper supported by a CPIP Leonardo da Vinci Fellowship Research Grant, CPIP Senior Scholar Kristen Osenga investigates the jumbled state of patent-eligible subject matter in the United States. Following an analysis of those entities currently wielding the power to make decisions on patent eligibility—and an assessment suggesting that other reforms will not solve the issue at its roots—Professor Osenga instead proposes and defends the revolutionary plan of turning over patent-eligibility decisionmaking authority to the courts.

Mark F. Schultz, The Market for Performance Rights in Sound Recordings: Bargaining in the Shadow of Compulsory Licensing (forthcoming)

In this forthcoming paper, CPIP Senior Scholar Mark Schultz discusses government regulations on licensing rights and rates for sound recordings, focusing on how their artificial nature divorces creators’ control and compensation from the marketplace. After exploring the negative impact of this arrangement on creators, consumers, and the market at large, Professor Schultz suggests policy changes for overhauling (and not merely recalibrating) the current, outdated system.

Jonathan M. Barnett, Antitrust Overreach: Undoing Cooperative Standardization in the Digital Economy, 25 Mich. Telecomm. & Tech. L. Rev. 163 (2019)

In this paper from our Sixth Annual Fall Conference, CPIP Senior Scholar Jonathan Barnett analyzes the benefits of standardization in ICT markets and the importance of IP rights and enforced contracts in keeping standardization relationships reciprocal rather than imposed by exterior monopolization. Professor Barnett looks at threats to cooperative standardization as posed by regulators and legislation—in particular, how implementation is favored over, and to the detriment of, innovation.

Activities, News, & Events

a lit lightbulb hanging next to unlit bulbs

CPIP Executive Director Sean O’Connor leads the law school’s new Innovation Law Practicum this fall. The Practicum will provide teams of students the opportunity to counsel entrepreneurs, creators, and inventors from the university’s internal and external communities. The course will teach students about entrepreneurship and commercializing innovation and creativity, as well as how to craft an overall legal strategy in the context of a client’s business, technology, and/or artistic vision. Anticipated projects include providing an initial assessment of legal issues and business planning, followed by specific legal services such as entity formation, securing IP, or drafting employment agreements upon mutual agreement with the client.

CPIP Director of Copyright Research and Policy Sandra Aistars heads the law school’s Arts & Entertainment Advocacy Clinic again this fall. The Clinic will continue its partnership with the U.S. Copyright Office by helping it and the World Intellectual Property Organization (WIPO) organize a conference on AI and copyright. The Clinic will also help mentor Native American musicians and promote cultural understanding via their music, work with a Grammy-nominated musician on a multi-disciplinary project, work with an author to register numerous books, advocate for the CASE Act, explore the intersection of copyright and constitutional law by representing parties interested in solving problems related to state sovereign immunity in cases of willful copyright infringement, and conduct an entertainment law education session and pop-up clinic with the Washington Area Lawyers for the Arts (WALA) during the DC Shorts Film Festival.

CPIP Executive Director Sean O’Connor joined Professors Lateef Mtima and Steve Jamar of the Institute for Intellectual Property and Social Justice (IIPSJ) in filing an amicus brief in Skidmore v. Led Zeppelin, a case currently before the en banc Ninth Circuit. The amicus brief argues that the courts should not improperly restrict composers to the “lead sheet” deposit copy for determining the scope of copyright protection for a musical composition. The brief explains how this position denies social justice to those whose backgrounds or musical styles preclude the use of traditional musical notation, and it argues that phonorecords or other contemporaneous documentation should be allowed as evidence of the scope of the copyrighted work.

Categories
FTC Healthcare

CPIP Scholars Join Comments to FTC on How Antitrust Overreach is Threatening Healthcare Innovation

dictionary entry for the word "innovate"On December 21, 2018, CPIP Senior Scholars Adam Mossoff and Kristen Osenga joined former Federal Circuit Chief Judge Randall Rader and SIU Law’s Mark Schultz in comments submitted to the FTC as part of its ongoing Competition and Consumer Protection in the 21st Century Hearings. Through the hearings, the FTC is examining whether recent economic or technological changes warrant adjustments to competition or consumer protection laws. The comments submitted to the FTC explain how the FTC itself is harming innovation in the health sciences by meddling in patent disputes between branded and generic drug companies.

The introduction is copied below, and the comments can be downloaded here.

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How Antitrust Overreach is Threatening Healthcare Innovation

Imagine passing a rigorous test with flying colors, only to be told that you need to start over because you weren’t wearing the right clothing or you wrote your answers in the wrong color. Does that sound silly? Unfair? That scenario is happening to the American pharmaceutical industry thanks to regulators at the Federal Trade Commission who aren’t content to let the Food & Drug Administration (the experts in pharmaceutical safety and regulation) and federal courts (which referee disputes between branded and generic drug companies) decide when new drugs are ready to come to market. The consequences of these regulatory actions impact people’s lives.

The development and widespread availability of safe and effective pharmaceutical products has helped people live longer and better lives. The pharmaceutical industry invests billions each year in research and infrastructure and employs millions of Americans. The industry is closely regulated by many agencies, most notably the FDA, which requires extensive testing for safety and effectiveness before new drugs enter the market. Many thoughtful proposals have been advanced to improve and modernize the FDA’s review and approval of new drugs, but there is broad agreement that the FDA’s basic role in drug approval serves valid ends.

In recent years, however, other government agencies have played an increasingly intrusive role in deciding whether and when new drugs can enter the market. One such agency is the Federal Trade Commission, which has recently taken steps to block branded drug companies from settling patent litigation with generic drug makers. The FTC substitutes its own judgment for the business judgment of sophisticated parties, simultaneously weakening the patent rights of branded drug companies that spend billions in drug discovery and development and delaying generic drug companies from bringing consumers low cost alternatives to branded drugs. This example of government agencies picking winners and losers—indeed, deciding there should be no winners and losers—harms consumers in the short run by slowing access to drugs and in the long run by weakening innovation.

This paper describes the role of patents in protecting drugs and the special patent litigation regime Congress enacted in the 1980s to carefully balance the needs of branded drug companies, generic competitors, and consumers. Although these systems are not perfect, the FTC’s overreach in its regulatory powers in this area of the innovation economy results in a net loss for American consumers, as described below.

To read the comments, please click here.

Categories
Patent Law Pharma

CPIP Scholars Examine the Flaws in the Term “Evergreening”

scientist looking through a microscopeIn their new paper, Evergreening of Pharmaceutical Exclusivity: Sorting Fact from Misunderstanding and Fiction, Professors Kristina Acri née Lybecker and Mark Schultz, along with CPIP John F. Witherspoon Legal Fellow David Lund, analyze how the term “evergreening” is used in the context of pharmaceuticals.

After sorting through the vagaries and rhetorical excesses that restrict meaningful discussion, they identify seven categories that capture typical uses of the term:

  • The assertion that the duration of existing patents can generally be “renewed” or “extended,” for very long or indefinite periods;
  • Obtaining additional patents related to a particular pharmaceutical or treatment;
  • The use of laws that allow patent owners to restore some portion of their term lost due to governmental delays;
  • The use of laws that give companies a limited term of exclusive time to market a drug;
  • Regulatory barriers that frustrate potential generic competitors’ ability to enter a market;
  • Business practices that largely rely on marketing to advantage innovators; and
  • Settling lawsuits with generic manufacturers that seek to invalidate a patent.

In addition to identifying practices claimed to be “evergreening,” this paper also discusses the impact and value of these practices. For most situations, the practices reflect specific policies that are having their desired effect, such as the increase in studies of drug safety and efficacy in children brought about by pediatric exclusivity. In some cases, the practices are simply legal impossibilities. Only in a few specific situations related to regulatory requirements do the authors observe strategic opportunities that could plausibly be considered problematic.

Because of the number of practices and the diversity of value those practices bring to pharmaceutical commercialization, the term obscures far more than it illuminates. Discussions about patents, exclusivities, and public health would benefit greatly from discussing the practices and policies specifically, rather than attempting to use a nebulous term such as “evergreening.”

The paper, which started as part of Professor Acri’s work through CPIP’s Thomas Edison Innovation Fellowship, can be found here. The abstract is copied below.

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Evergreening of Pharmaceutical Exclusivity: Sorting Fact from Misunderstanding and Fiction

Abstract

When people use the term “evergreening” to describe pharmaceutical industry practices, they typically display an unwarranted confidence that they know exactly what they mean both descriptively and normatively. However, a consistent and coherent definition of “evergreening” does not appear to exist.

This article surveys legal, academic, trade, and popular sources that use the term “evergreening” to develop a taxonomy of the policies and actions to which the term is applied. We find that the term is used to cover roughly seven categories of circumstances. Our review finds that the use of the term, taken as a whole, is more typified by the diversity of practices to which it applies rather than any consistent meaning. There are some commonalties, but they exist mostly at a general level.

We then analyze these seven categories to determine if the rhetoric matches the reality. Evergreening is most frequently used as a pejorative term, with a common implication that the “evergreener” is engaged in some sort of strategic behavior at least, or perhaps an immoral if not illegal practice. However, the categorical application of a pejorative term such as “evergreening” to any of the general policies and types of actions we examine is unwarranted and inappropriate. Proponents often apply the term to ordinary use of legal rights as they were designed and the concept makes no meaningful distinction between beneficial and problematic actions.

Unfortunately, “Evergreening” is a key concept in health policy that obscures far more than it illuminates. Once the term is stripped of misunderstandings and loose rhetoric, little of value remains. This is not to say that all policies and actions that extend or preserve exclusive rights are prudent or defensible in individual cases. Rather, the discussion regarding patents and public health would gain much clarity and rationality from addressing the disparate things labeled as “evergreening” on their individual merits.

To read the paper, please click here.

Categories
Administrative Agency Innovation Patent Law

The PTAB’s Regulatory Overreach and How it Cripples the Innovation Economy

files labeled as "patents"On August 14, 2017, the Regulatory Transparency Project of the Federalist Society published a new white paper, Crippling the Innovation Economy: Regulatory Overreach at the Patent Office. This white paper examines how an administrative tribunal created in 2011—the Patent Trial and Appeal Board (PTAB)—has become “a prime example regulatory overreach.” Several CPIP scholars are members of the Intellectual Property Working Group in the Regulatory Transparency Project that produced the white paper, including Professors Adam Mossoff, Kristen Osenga, Erika Lietzan, and Mark Schultz, and several are listed as co-authors.

Among the sweeping changes to the U.S. patent system included in the America Invents Act (AIA) was the creation of the PTAB, a new administrative body within the U.S. Patent and Trademark Office (USPTO). The PTAB hears petitions challenging already-issued patents as defective. Anyone can file a petition to have a patent declared invalid. The original idea was that this would help to weed out “bad patents,” i.e., patents that should not have been issued in the first place.

In the past five years, however, it has become clear that the PTAB has become an example of an administrative tribunal that has gone too far. Lacking the proper procedural and substantive restraints that constrain courts and even other agencies in respecting the rights of citizens brought before them, the PTAB is now “killing large numbers of patents and casting a pall of uncertainty for inventors and investors.”

In just a few years, the laudable goal of the PTAB in providing a cheaper, faster way to invalidate “bad patents” has led to a situation in which all patents now have a shroud of doubt around them, undermining the stable and effective property rights that serve as the engine of the innovation economy. The former chief judge of the court that hears all patent appeals recently said that the PTAB is a “patent death squad,” and confirming that this is not extreme rhetoric, the first chief judge of the PTAB responded to this criticism by embracing it: “If we weren’t, in part, doing some ‘death squadding,’ we would not be doing what the [AIA] statute calls on us to do.”

The white paper briefly discusses the history and purpose of the U.S. patent system and describes the PTAB and how it operates. The substance of the white paper details extensively the procedural and substantive problems in how the PTAB has failed to respect both the basic requirements of the rule of law and the rights of patent owners. The concern is that this undermines the stable and effective platform that patent rights provide as the engine of the innovation economy.

To read the white paper, please click here.