Incentivizing Innovation in BioTech Industries Part III: The Rise of Uncertainty

A bit over a month ago, I published the second post of this multi-post series and outlined the traditional patentable subject matter arena. Here I will discuss the recent revival of the patentable subject matter debate, starting with the courts.

Uncertainty CauCapturesed by the Courts

Within the past five years there has been four  United States Supreme Court cases and at least four sets of guidelines promulgated by the United States Patent and Trade Office (“USPTO”) concerning patentable subject matter.

In a 2010 case, Bilski v. Kappos, the Supreme Court reviewed the patentability of a method of buying and selling commodities so to protect against (hedge) the risk of price fluctuations.[1] The debate centered around two claims: independent Claim 1 which described the method of hedging, and dependent Claim 4 which reduced the concepts of Claim 1 to a mathematical formula.[2] The Court concluded that the claimed method attempted to claim an unpatentable subject matter – an abstract idea – and therefore, the claimed business method was unpatentable.[3] In reaching its decision the Court failed to explain why the hedging method was an abstract
idea, and in disagreeing with the United States Court of Appeals for the Federal Circuit’s (“Federal Circuit”) exclusive use of a machine-or-transformation test the Court failed to provide a definitive test for determining what constitutes patentable subject matter.[4]

In a 2012 case, Mayo Collaborative Services v. Prometheus Labs., Inc., the Supreme Court reviewed the patentability of a method claim for administering a drug, determining patient’s response, and changing the drug treatment based on the patient’s response.[5] The Court again rejected the Federal Circuit’s exclusive use of the traditional machine or transformation.[6] The Court first found that the claimed method heavily
relied upon laws of nature.[7] The Court then reviewed the claimed method to determine whether the claimed process included “additional features that provide[d] practical assurance[s] that the [claimed] process [wa]s more than a drafting effort designed to monopolize the law of nature itself.[8] That is, the Court asked if the claimed processes “transformed those unpatentable natural laws into patent eligible application of those laws.”[9] The Court held the “steps add[ed] nothing of significance to the natural laws themselves,” and therefore, the claimed method was unpatentable.

In a 2013 case, Ass’n for Molecular Pathology v. Myraid Genetics, Inc., the Supreme Court reviewed the patentability of an isolated DNA segment and its complementary DNA (cDNA).[10] Myraid identified the precise location and sequence of the BRCA1 and BRCA2 genes.[11] This was a huge medical breakthrough, as mutations in the sequence at either location can greatly increase a woman’s risk for breast and ovarian cancer.[12] In the instance of the DNA coding claim, the court determined “whether the act of isolating DNA . . . is an inventive act that entitles the individual who first isolates it to a patent.”[13] Because Myraid’s claims did not address any potential chemical changes or other results from the act of isolating the DNA, but rather, focused solely on the genetic information itself – that is, the sequence of the adenine (A), guanine (G), thymine (T), and cytosine (C) nucleotides – the Court held that these claims were unpatentable.[14]

The Court reasoned that the patent system was designed to be used to promote innovation
not discovery, regardless of how impressive and important any discovery may be.[15] Nonetheless, the Court held that scientific alteration of the genetic code may be considered patentable.[16] However, the Court failed to provide or suggest any categorizinCaptureg tests. Bewilderment persisted when the court distinguished Myraid’s claims characterizing the isolated DNA code and Myraid’s claims characterizing the cDNA. The Court recognized that the creation of the cDNA sequence “result[ed] in an exons-only molecule that is not naturally occurring.”[17] Following from such, the Court held that cDNA was not to be considered a product of nature, although dictated by nature, and was patent eligible.[18]

In a 2014 case, Alice Corp. v. CLS Bank Int’l, the Supreme Court reviewed the patentability of a “computer-implemented scheme for mitigating ‘settlement risk’ . . . by using a third-party intermediary.”[19] Applying the two part test set-forth in Mayo to abstract ideas, the Court considered first defined the subject matter of the questioned claims and held that the claims were drawn to the patent-ineligible abstract idea of intermediate settlement, which is an essential “building block of the modern economy.”[20] Secondly, the Court examined each element of the questioned claim “to determine whether it contain[ed] an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application,” and ensure that “‘the claim is more than a drafting effort designed to monopolize the abstract idea.’”[21] The Court unanimously held that the claims provided for nothing more than applying an abstract idea using an “unspecified, generic computer.”[22] The Court concluded that such does not add significantly more so to “transform an abstract idea into a patent-eligible invention.”[23]  However, the Court again failed to provide guidance for determining what constitutes an abstract idea.[24]

In each of the recent cases, the Supreme Court expressed “a concern that patent law not inhibit further discovery by improperly tying up the future use of laws of nature.”[25] The patent system was originally implemented as a means to “promote the Progress of Science and useful Arts.”[26] However, at the same time that the patent system works to incentivize innovation (largely in part because of granted monopoly rights), there is a risk that patent grants may disproportionately tie-up use of the process, machine, manufacture, or composition of matter and impede further innovation.[27] For instance, in Myraid the Court believed that Myraid’s DNA coding claim, if valid, would have given Myraid “the exclusive right to isolate an individual’s BRCA1 and BRCA2 genes.”[28] Thus, the Court generally views the patent system as a two-edged sword.[29] On the one hand, the patent system prompts innovation by providing a means in which to obtain a return on investment through the granting of monopoly rights.[30] On the other hand, the patent system impedes Captureinnovation by eliminating the flow of information and generally raising the price of innovation and business.[31]

The Court erred in utilizing this rationale in any and all fashions. The Court had the ability and option to craft opinions reaching similar conclusions without bewildering the patent system for whole industries, namely the biotechnology and software industries. The Court failed to obtain a through and diverse understanding of the various ways the patent system incentivizes innovation.[32] In fearing the second edge of the sword, the Court crafted opinions that have resulted in wide-spread confusion and uncertainty, which necessarily affects the effectiveness and stability of the patent system’s incentivizing scheme.

The confusion and uncertainty is exacerbated by the USPTO’s interCapturepretation of the recent Supreme Court cases – by the agency dedicated to implementing and monitoring the patent system.  The USPTO has released a number of documents attempting to provide guidance on the topic of patentable subject matter.[33] The USPTO has released at least one specific interim guidance document after each of the principal Supreme Court cases.[34] The last of these guidance documents was the July 2015 Update: Subject Matter Eligibility. The USPTO has attempted with each publication to provide greater clarity by defining, principally through examples, the understood scope of patentable subject matter.[35] The recent USPTO update is an improvement, but there are many areas that need further clarification and developments.[36] Notably, the recent update is criticized for too broadly interpreting the case law and for failing to provide a “clear methodology for identifying abstract ideas.”[37] Moreover, with the promulgation of each new guidance document, the biotechnology industry as a whole has observed an increase in claim rejections.[38]

The USPTO with each update has taken steps to respond to and follow the example of the Federal Circuit and its interpretation and application of the recent Supreme Court cases.[39] However, the Federal Circuit continues itself to experience difficulties interpreting and applying the perplexing binding precedence. For instances, the Supreme Court twice rejected the Federal Circuit’s interpretation in Mayo and its predecessors.[40]  Furthermore, the Federal Circuit’s recent holding in Ariosa Diagnostics, Inc. v. Sequenom, Inc. has received significant criticism.[41] The Federal Circuit considered the patentability of “certain methods using cffDNA.”[42] The method at issue in Ariosa provided a revolutionary means of diagnosing prenatal fetal DNA, which minimized, if not eliminated, risks associated with the traditional methods.[43] Nonetheless, the Federal Circuit held that the method “begins and ends with a natural phenomenon.”[44] As such, the cffDNA method claims were held invalid for attempting to claim unpatentable subject matter.[45]

The Federal CircuiCapturet reached its conclusion despite the Supreme Court’s acknowledgement in Ass’n for Molecular Pathology v. Myraid Genetics, Inc. that Myraid could certainly claim application of its knowledge of the isolated BRCA 1 and BRCA 2 genes even though it could not claim the genes itself.[46] Similarly, in Diamond v. Diehr, the Supreme Court held that “a new combination of steps in a process may be patentable even though all the constituents of the combinations were well known and in common use before the combination was made.”[47]

The Honorable Richard Linn, in a lively concurrence to Arisoa, explained the impressive advantages of the disputed invention.[48] The “invention” received high praises in the industry, it was a first of its kind invention, and the industry seemingly taught away from
the disputed invention as doctors previously discarded the maternal plasma.[49] In accordance with the Supreme Court’s precedence, Sequenom should have been able to obtain a patent on the application of its knowledge of the cffDNA and the application may include known constituents. The Federal Circuit fails to acknowledge all of the Supreme Court’s precedence and holds simply that because the patent claims “begins and ends with a naturally occurring phenomenon,” the claims are ineligible.[50] Judge Linn recognizes the limited scope of the Federal Circuit’s review: “[b]ut for the sweeping language in the Supreme Court’s Mayo opinion, [there is] no reason, in policy or statute, why this breakthrough invention should be deemed patent ineligible.”[51] The Federal Circuit erred in reading Mayo singularly, and resultantly, forcing a conclusion that is in clear opposition to the totality of the Supreme Court’s precedence. The Federal Circuit recently denied a request for an en banc review of the Ariosa.[52]

Furthering the uncertainty is the USPTO’s lack of substantive rulemaking authority. The lack of substantive rulemaking authority significantly impacts how the agency defines patentable subject matter.[53] The Federal has repeatedly held that the Patent Act of 1952 provides the USPTO only procedural rulemaking authority.[54] Substantive rulemaking allows agencies to legislate through the rulemaking process. Rules promulgated by the substantive rulemaking process have the force and effect of law.[55] Conversely, procedural rulemaking provides agencies only the ability to implement regulatory standards. Agencies having only procedural rulemaking have the singular ability to set forth the mode in which it will complete its proscribed functions.[56] Because the USPTO has only procedural rulemaking authority the courts, specifically, the federal circuit plays an infinitely greater role in interpreting and applying patent statutes.[57] The USPTO has no choice but to aggravate the erroneous interpretations of the federal circuit, driven by the court’s misinterpretation and understanding of the rationales of the patent systems, until the point in time that the Supreme Court provides specific guidance – an event unlikely in review of the Court’s precedence. In the meantime, uncertainty increases and the patent system is undermined.

Uncertainty CaCaptureused by Legislative Reforms

The patentable subject matter debate is not the only factor afflicting the patent system and not the only cause of growing uncertainty.[58] The Leahy-Smith American Invents Act (AIA)[59], enacted September 16, 2011, provided the “most significant reform of the Patent Act since 1952.”[60] The AIA introduced an array of inexpensive ways to challenge a patent’s validity.[61] For instance, the AIA established an inter partes review system[62] comprising a trial-like proceeding before a newly established Patent Trial and Appeals Board[63]. Since establishment of the inter partes review system, “approximately [sixty-six] percent of cumulative claims have been invalidated and [thirteen] percent have been cancelled by the patent owner.”[64] The processes introduced by the AIA have rapidly shaken the confidence of the system – there is no longer confidence that once a patent issues it is valid.[65] These sentiments and the resulting environment represent a critical problem and reflect negatively on the system’s ability to incentivize innovation. “If a property right can easily be taken away, nobody will risk investing in it.”[66]

Furthermore, the Court has recently held that the narrower reasonable certainty standard should be applied in definiteness determinations.[67] This is in direct opposition to the traditional “not amenable to construction or was insolubly ambiguous” standard applied by the Federal Circuit.[68]  Moreover, the Supreme Court’s holdings in both Octane Fitness, LLC v. Icons Health & Fitness, Inc.[69] and Highmark Inc. v. Allcare Health Mgmt. Sys.[70] “provide for more expansive authority to the district courts, and effectively urge them to more liberally award fees in cases where the patent or Captureinfringement claims, or both, are weak.”[71]

Both Congress, through enactment of the AIA and subsequent legislation[72], and the Supreme Court, through its patentable case law, are significantly affecting the shape of the traditional patent system, creating uncertainty by way of unfamiliarity.[73] The growing uncertainty in so many areas of the patent system challenges the fundamental goal of the patent system. The uncertainty undermines the effects of the patent system as a principal means of incentivizing innovation.

[1] 561 U.S. 593, 598 (2010). [2] Id. at 599. [3] Id. at 609. [4] §106[H] Rejection: For Reasons Other than Prior Art, Patent Office Rules and Practice (LexisNexis). [5] 132 S. Ct. 1289, 1295 (Fed. Cir. 2012). [6] Id. at 1303. [7] Id. [8] Id. at 1297. [9] Id. at 1294. [10] 133 S. Ct. 2107 (2013). [11] Id. at 2112. [12] Id. [13] Id. at 2114. [14] Id. at 2118, 2120. [15] Id. at 2117. [16] Id. at 2120. [17] Id. at 2119. [18] Id. [19] 134 S.Ct. 2347, 2351-52 (2014). [20] Id. at 2355-56. [21] Id. at 2357 (citing Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S.Ct. 1289 (Fed. Cir. 2012)). [22] Id. at 2360. [23] Id.  [24]  §106[H] Rejection: For Reasons Other than Prior Art, Patent Office Rules and Practice (LexisNexis). [25] 132 S.Ct. at 1289, 1301. [26] U.S. Const. art. 1, § 8, al.8. [27] 132 S.Ct. at 1301; Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347, 2354-55 (2014). [28] 132 S.Ct. at 2113. [29] Id. [30] Id. [31] Id. [32] See Post I. [33] See Examination Guidance and Training Material, USPTO. [34] See Past Subject Matter Eligibiliy Guidance and Training Materials, USPTO. [35] July 2015 Update: Subject Matter, USPTO. [36] Sunjeev S. Sikand, 3 Pros an 7 Cons of the USPTO’s Section 101 Guidance Update, Law360 (Oct. 26, 2015). [37] Letter from Theodore H. Davis Jr., Section Chair, American Bar Association, Section of Intellectual Property Law to Michelle K. Lee, Under Secretary of Commerce of Intellectual Property, Director of the United States Patent and Trademark Office (Oct. 28, 2015). [38] See also Brief of the Biotechnology Industry Organization (BIO) and Pharmaceutical Research and Manufacturers of American (PhRMA) as Amicus Curiae Supporting Appellants and in Favor of En Banc Reconsideration at 2, Ariosa Diagnostics, Inc. v. Sequenom, Inc., Nos. 3:11-cv-03691-S1, 3:12-cv-00132-S1 (Fed. Cir. Aug. 27, 2015). [39] Michael Borella, July 2015 Update on Subject Matter Eligibility, Patent Docs (Aug. 25, 2015). [40] Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S.Ct. 1289, 1296 (Fed. Cir. 2012). [41] 788 F.3d 1371 (2015). [42] Id. at 1373. [43] Id. [44] Id. at 1376. [45] Id. [46] 133 S. Ct. 2107, 2120  (2013) (Similarly, this case does not involve patents on new applications of knowledge about the BRCA1 and BRCA2 genes. Judge Bryson aptly noted that, “[a]s the first party with knowledge of the [BRCA1 and BRCA2] sequences, Myriad was in an excellent position to claim applications of that knowledge. Many of its unchallenged claims are limited to such applications.” (citing Ass’n  for Molecular Pathology v. USPTO, 689 F.3d 1303, 1349 (Fed. Cir. 2012))). See Thomas Goldstein, Ariosa v. Sequenom: Dire consequences for biomedicine require rehearing en banc by CAFA, IPWatchDog (Sept. 13, 2015). [47] 450 U.S. 175, 188 (1981). [48] 788 F.3d at 1380. [49] Id. at 1381. [50] Id. at 1376. [51] Id.at 1381. [52] Kelly Knaub, Full Fed. Circ. Won’t Rehear Fetal DNA Patent Row, Law360 (Dec. 2, 2015). [53] Dennis Crouch, USPTO’s New Examination Guidelines Subject Matter Eligibility Provide “Pathways to Eligibility, Patentlyo (July 30, 2015). [54] Symposium, Who Defines the Law? USPTO Rulemaking Authority, 8 Nw. J. Tech. & Intell. Prop. 410, 411 (2010); Substantive Rule-Making Authority for the USPTO Director, The Coalition for 21st Century Patent Reforem, Protecting Innovation to Enhane American Competitiveness (April 25, 2007). [55] Effects of  Rules, USLegal. [56] Procedural Rules; Policy Statements, USLegal. [57] Substantive Rule-Making Authority for the USPTO Director, supra note 111. See also Ryan Davis, Judge Uses Alice To Ax Paatents OK’d Under New Alice Rules, Law360 (Nov. 9, 2015). [58] See Jamie Siegel, What is a patent owner to do when they want to monetize their patents?, IPWatchDog (Nov. 29, 2015). See generally Gene Quinn, As U.S. Makes it harder for innovation, companies must diversify overseas to Europe, China, IPWatchDog (Dec. 8, 2015); Gene Quinn, The Changing Landscape of IP Investments – A Conversation with Abha Divine, IPWatchDog (Dec. 6, 2015). [59] Leahy-Smith American Invents Act, H.R. 1249, 112th Cong. (1st Sess. 2011). See also Summary of the America Invents Act, American Intellectual Property Law Association (last visited Nov. 25, 2015).[60] President Obama Signs America Invents Act, Overhauling the Patent System to Stimulate Economic Growth, and Announces New Steps to Help Entrepreneurs Create Jobs, Office of the Press Secretary (Sept. 16, 2011). [61] Erich Spangenberg, Have we Hit Bottom in the Patent Market?, IPWatchDog (Nov. 3, 2015). [62] See Inter Partes Review, USPTO. See also Inter Partes Review, Fish & Richardson. [63] Welcome to the Patent Trial and Appeal Board (PTAB), USPTO. [64] Peter Root & Nisha Agarwal, The Supreme Court’s part in patent reform, post-AIA, InsideCounsel (Jan. 5, 2015). See also  Brian J. Love & Shawn Ambwani, Inter Partes Review: An Early Look at the Numbers, 81 U. Chi. L. Rev. 93 (2014). [65] Spangenber, supra note 137. [66] Paul Morinville, How the U.S. is Killing Innovation and why it Matters for Entrepreneurs, IPWatchDog (Oct. 24, 2015). [67] Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014). [68] Id. [69] 134 S. Ct. 1749 (2014). [70] 134 S. Ct. 1744 (2014). [71] Root, supra note 140. [72] See generally Jeff John Roberts, Patent LawsuitSet One-Day Record with 257 New Cases, Most Filed in Texas, Fortune (Dec. 2, 2015). [73] Id. See also Gene Quinn, Patent Reform – What’s Driving the Patent Legislative Agenda?, IPWatchDog (Nov. 18, 2015).
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To Trademark Trumpertantrum

Presidential candidate Donald Trump suggested this week that he might want to trademark “Trumpertantrum,” a phrase used to describe his characteristic angry outbursts. Trump brushed the word off and joked that he should take it on as a trademark. Of course, if this were to occur, Trump would have to market himself or a good or service under the mark “Trumpertantrum.” Trump’s comment, while in jest, represents the typical public misinformation regarding types of intellectual property and what exactly constitutes a trademark.

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For more information on intellectual property, be sure to check out the rest of Beyond Clause 8.

 

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Cracking Down on IP Theft

Intellectual property theft can result in billions of dollars in lost revue and can harm global FBImarkets. Combating theft can be very difficult, and has largely focused on working with the owners or holders of the intellectual property rights. This month, the Department of Justice announced a new plan of fighting intellectual property theft by working closely with third-party businesses. The FBI and the National Intellectual Property Rights Coordination Center are increasing this work with other entities such as online marketplaces, payment services providers, and online advertising systems. This approach comes from the adaption of law enforcement to the unique methods used by intellectual property thieves. Also, the FBI acknowledges the connection between intellectual property theft, crime, and national security leading to greater interdepartmental cooperation.

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Knock, Knock. Who’s there? The U.S. Copyright Office.

Comedian and actress Amy Schumer has recently come under attack for allegedly stealing jokes and passing them off as her own. A number of fellow comedians have accused Schumer of copy their jokes without properly attributing their source. In the comedy world, comedians must protect their jokes as they are the creative products that sustain the career of the comedian. As they are creative, jokes are potentially under the protection Amy Schumerof copyright law, and thieves of protected jokes may face legal consequences. To obtain a copyright, a work must be original, be fixed in a medium, and fit into one of the statutory categories of authorship. Jokes can easy meet the creative originality requirement and fit into numerous statutory categories, but may struggle as many jokes are unfixed. Furthermore, jokes may be de minimis because of their short nature and not eligible for copyright. At this point, it appears that Schumer faces only the potential backlash of fellow comedians and fans, rather than any legal penalties. However, as the prevalence of intellectual property rights grows, comedians may need to tread carefully and ensure the originality of their comedic material.

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The Royal(ty) Treatment: New Rates Set For Pandora

The Copyright Royalty Board (CRB) has changed the royalty amounts that streaming pandoramusic giant Pandora will pay over the next four years. In response, Pandora has struck deals to pay these increased rates with the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI). These deals are similar to other deals which give Pandora access to ASCAP and BMI’s combined catalog of over 20 million songs. They also signal the end of repeated courtroom bouts between Pandora and several music industry organizations over licensing and royalties.

Founded in January of 2000, Pandora streams music to over 80 million regular users. Notably, however, it has never turned a profit. Approximately 44% of Pandora’s revenues go to royalty payments, arguments over which Pandora has previously faced, and continue to affect the streaming music industry as a whole. Pandora pays two types of royalties: publishing royalties and performance royalties. Where publishing royalties are paid to the writers or owners of the music, performance royalties are paid to a group called SoundExchange, which divvies up fees to labels and artists. The particular amount of royalties are paid are calculated by the CRB.

The CRB’s authority to determine the varying royalty schedules is relatively new. In 2004, the Copyright Royalty and Distribution Reform Act replaced the original Copyright Arbitration Royalty Panel (CARP) with the three CRB Copyright Royalty Judges who sit today. After several webcasters objected to the rates set by the CRB, Congress responded with the Webcaster Settlement Acts of 2008 and 2009, the rates under which Pandora operated under until recently. Today, the CRB sets rates and encourages separate negotiations between licensors and licensees regarding rate settlements. When separate negotiations fail, a rate trial is held.

Considered by some to be a “crackdown” on non-subscription services, the December 16 ruling increased rates from 14 cents per 100 songs to 17 cents, and lowered the rates for subscriber services (Like Spotify and Apple Music) from 23 to 22 cents. This amounts to an approximately $94 million increase in payments to recorded music right holders in 2016. Although royalty payments are notoriously difficult to calculate accurately, and have been criticized by musicians as unfairly low compensation, it appears that Pandora, ASCAP and BMI are pleased with the resolution. At least publicly, the entities appear to be grateful for the certainty the ruling provides, and eager to move forward. Pandora, especially, has reason to be pleased.

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But privately, the sentiments are less clear. Pandora is concerned that raising rates will be cost-prohibitive, and will prevent their ability to invest and grow. Organizations like SoundExchange, by contrast, are concerned that the rates set by the CRB are not reflective of the music’s market value. In reality, however, both fears are unfounded. Pandora cannot reasonably claim that royalty payments have inhibited their investing in light of the fact that, in addition to direct deals with Warner/Chappell and Sony/ATV, Pandora purchased music analytics service Next Big Sound, concert ticket service Ticketfly, and on-demand streaming service Rdio. Clearly, Pandora is very capable of investing in spite of the royalties it pays to stream songs. SoundExchange’s critique, on the other hand, misunderstands the evolving modern “market” in which music is consumed.

Traditional notions of the market for music must be cast aside. Our preference for streaming music has grown dramatically in the past few years. How we listen to music today bears little resemblance to how we listened to music at the dawn of the internet age. The evolution from CDs and MP3 players to streaming radio and streaming on-demand services has developed at a breakneck speed. Those of us born in the late-80’s and early 90’s have experienced this radical transformation firsthand. We who are old enough to remember when dial-up first came out, but are still young enough to use technology effectively, understand this transition clearest of all.

As with many things, we have grown accustomed to instant gratification. The internet provides us with the wealth of human information at our fingertips, accessible in a flash. Why, then, should we settle for a less-than-perfect song? The reason, I contend, is because without traditional non-subscription services, our understanding of music would remain superficial.

Our perception of what we like and dislike is formed in large part from being unable to pick and choose music at will. Non-subscription services like Pandora, which more closely resemble terrestrial radio, play a vital role in forcing us outside our musical comfort zone. As we grow more and more accustomed to playing what we want, when we want, the randomness of the radio becomes a crucial way to expose listeners to a wider variety of genres and artists. These services should continue to coexist with subscription-based, on-demand services. This development is step forward in ensuring that they do.

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Incentivizing Innovation in BioTech Industries Part II: Defining Patentable Subject Matter

Roughly a month ago in Incentivizing Innovation in BioTech Industries Part I I wrote about the traditional and present importance of the Patent system in inc
entivizing innovation and, subsequently, to the American economy. In this post – Part II of Incentivizing Innovation in BioTechCapture Industries: Defining Patentable Subject Matter – I trace the development and effects of the traditional understanding of patentable subject matter. This historical review is important because to understand the drastic effects of the present state of uncertainty there needs to be an appreciation for the traditional understanding of what is considered patentable.

In 1793, Congress replaced the Patent Act of 1790 with the Patent Act of 1793 to address many of the inadequacies resulting from the implementation of the Patent Act of 1790.[1] Importantly, the Patent Act of 1793 amended the 1790 definition of patentable subject matter to include composition of matter.[2]  The Patent Act of 1793 announced that a patent may be obtained for “any new and useful art, machine, manufacture or composition of matter, or any new and useful improvement on any art, machine, manufacture or composition of matter, not known or used before.”[3] Though “Congress replaced the word ‘art’ with ‘process’” in 1952, this language mirrors the present language of 35 U.S.C. 101, which sets forth the current areas of patentable subject matter.[4] “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”[5] Thus, for an invention to be patentable it must first-and-foremost fit within in the bounds of one of the four patentable categories, it need be a process, machine, manufacture, or composition of matter.  Subject matter eligibility is a threshold test to patentability.[6]
The courts have been charged with and responsible for confronting the many difficult questions that have arisen since the implementation of the Patent Act of 1790, namely the courts have been tasked with interpreting and defining patentable subject matter.[7] In 1980, the Supreme Court, broadly interpreting the Patent Act of 1952[8], concluded “that Congress intended statutory subject matter to ‘include anything under the sun that is made by man.’”[9] However, the courts have repeatedly held that laws of nature, natural phenomena, and abstract ideas are not entitled to patent protections.[10]

Though not required by statute the courts have established these judicial exceptions as being consistent with the requirements set-forth in 35 U.S.C. § 101 that a patentable process be new and useful.[11] Specifically, the courts have excluded laws of nature and natural phenomena from the domain of patentable subject matter because each forms a “part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none.”[12] The courts have, specifically, excluded abstract ideas from the domain of patentable subject matter because allowing patents on abstract ideas “would preempt use of the idea in all fields thereby creating a monopoly in the idea itself.”[13] In both instances providing patent rights would be contrary to the foundational rational relied upon by the legislatures in enacting the original patent act in 1790 and in the enactment of all subsequent le
gislation.[14] Therefore, broadly, the courts have excluded laws of nature, natural phenomena, and abstract ideas from the domain of patentable subject matter in the interest of continuing to promote innovation, particularly innovation which results from the free-exchange of ideas.

If laws of nature, natural phenomena, and abstract ideas were patentable the basic tools of innovation would be monopolized, thus, hindering innovation. Moreover, “[g]iving one exclusionary rights in the building block by way of a patent would reduce the incentive for another” to innovate.[15] Nonetheless, the Court has made clear that an application of a law of nature, a natural phenomenon, or an abstract idea to a known process, machine, manufacture, or composition of matter may deserve patent protection.[16]

Though it is well-settled that laws of nature, natural phenomena, and abstracts ideas are not entitled to patent protections the courts have struggled “formulating precise guidelines for determining when a claim . . . [is] nothing more than a law of nature, physical phenomena, or abstract idea.”[17]  The Court, in following its role as interpreter and implementer, must unravel unforeseeable factual situations resulting from the rapid advancements in science and technology.[18] For instance, in Diamond v. Chakrabarty, the Supreme Court considered the patentability of a “human-made genetically engineered bacterium.”[19] The inventor obtained three types of patent claims on the bacterium: process claims for the method of producing the Capturebacterium, product claims for an inoculum comprising a carrier material and the engineered bacterium, and product claims for the engineered bacterium themselves.[20]

During prosecution the Examiner allowed the first two categories of claims, but rejected the third on the “grounds (1) that micro-organisms are ‘products of nature,’ and (2) that as living things they are not patentable subject matter under 35 U.S.C. § 101.”[21]  The Court held that the inventor’s bacterium were clearly patentable because the legislative history plainly showed that Congress intended patent laws to have a wide scope because the development of inventions is unforeseeable.[22] Congress sought to provide liberal encouragement.[23] The bacterium was deemed patentable because the claim was drawn “to a nonnaturally occurring manufacture or composition of matter – a product of human ingenuity ‘having a distinctive name, character [and] use.’”[24] The Court emphasized that the claimed bacterium was not the result of a pure discovery of a species naturally existing; rather, the inventor produced a new bacterium with distinct characteristics.[25]

Prior to Chakrabarty, it was unclear whether living things were within the bounds of patentable subject matter, namely whether living things could be considered a manufacture or a composition of matter.[26] The opposition believed that living things were products of nature and, therefore, unpatentable.[27] Notably, the opposition believed that by allowing inventions resulting from genetic research – such as the engineered bacterium in Chakrabarty – to be patented would catastrophically hinder genetic research and related technological developments.[28] Conversely, the Court did not believe that its patentability decision would deter scientists from researching, discovering, and developing.[29] The Court believed that its decision would simply “determine whether research efforts are accelerated by the hope of reward or slowed by want of incentives.”[30] The Court in Chakrabarty clearly held that genetically engineered organisms – living things – are within the bounds of patentable subject matter.

The biotechnology industry has reaped the benefits of the Court’s ruling. Exceptionally, in 2010, Jim Greenwood, the President and CEO of the Biotechnology Industry Organization, released the following statement:

The Supreme Court’s decision in Diamond v. Chakrabarty thirty years ago today was instrumental in spurring the creation of a dynamic and flourishing biotech industry.  By finding that subject matter derived from nature is eligible for patenting if it is modified by man into something new, useful and unobvious, the Court provided assurance to biotech companies and their investors that emerging technologies are protected by the patent system even if they could not have been foreseen when the system was created 200 years earlier.[31]

As Mr. Greenwood alluded to, the biotechnology industry has seen tremendous, immeasurable growth in the last several years.[32] The clear holding in Chakrabarty – the acceptance by the Court that living organisms were patentable – allowed the biotechnology industry to advance without restraints because “reduced the considerable uncertainty confronting investors in biotech firms.”[33] Following Chakrabarty, investors were more willing to invest in unprecedented biotechnology corporations because there was a high probability that they would receive a return on their investments as the probability of obtaining a patent was high.[34] Thus, Chakrabarty is but one example of the immense power of the courts in the patent system. The judiciary has the “power to interpret the generally worded patent statutes [and] dramatically alter the economic effects” of an entire industry.[35]

[1] E.C. Walterscheid, Thomas Jefferson and the Patent Act of 1793, Essays in History, http://www.essaysinhistory.com/articles/2012/115 (last visited Oct. 24, 2015). See Patent Act of 1793, 1 Stat. 318-323, available at http://ipmall.info/hosted_resources/lipa/patents/Patent_Act_of_1793.pdf.

[2] Id.

[3] 1 Stat. 318.

[4] Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).

[5] 35 U.S.C. § 101 (2015).

[6] Bilski v. Kappos, 561 U.S. 593, 602 (2010).

[7] Zhan, supra note 2. The courts have specifically interpreted the term process to mean “a mode of treatment of certain materials to produce given result.”  Cochrane v. Deener, 94 U.S. 780, 788 (1876). A process “is an act, or series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing.” Id. The courts have also specifically interpreted the term machine to “include[] every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.” Corning v. Burden, 56 U.S. 252, 267 (1854).  The courts have specifically interpreted the term manufacture “to mean ‘the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations whether by hand-labor or by machinery.’” Chakrabarty, 447 U.S. at 308 (citing Am. Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1, 11 (1931)).   Lastly, the courts have specifically interpreted the term composition of matter to mean “’all compositions of two or more substances and . . . all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders, or solids.” Chakrabarty, 447 U.S. at 308 (citing Shell Development Co. v. Watson, 149 F.Supp. 279, 280 (DC Cir. 1957)).

[8] See Patent Act of 1952, 66 Stat. 792 (codified as amended in scattered sections of 35 U.S.C.), available at http://www.gpo.gov/fdsys/pkg/USCODE-2011-title35/pdf/USCODE-2011-title35.pdf.

[9] Chakrabarty, 447 U.S. at 309 (citing S. Rep. No. 1979, at 5 (1952); H.R. Rep. No. 1923, at 6 (1952)).

[10] See Diamond v. Diehr, 450 U.S. 175, 185 (1981).

[11] Bilski v. Kappos, 561 U.S. 593, 601-02 (2010).

[12] 1-1 Patent Law Perspectives § 1.1 (citing Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948)).

[13] Id. (citing Bilski v. Kappos, 561 U.S. 593, 610 (2010)).

[14] See  Incentivizing Innovation in BioTech Industries Part I.

[15] 1-1 Patent Law Perspectives § 1.1.

[16] Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289, 1293-94 (Fed. Cir. 2012).

[17] 1-1 Patent Law Perspectives § 1.1.  

[18] Alissa K. Lipton, Biopharmaceuticals: The Patent System and Incentives for Innovation, Digital Access to Scholarship at Harvard (April 6, 2004), https://dash.harvard.edu/bitstream/handle/1/8852103/Lipton.pdf?sequence=1.

[19] 447 U.S. 303, 305 (1980).

[20] Id. at 305-306.

[21] Id. at 306.

[22] Id. at 308-309, 316.

[23] Id. at 308.

[24] Id. at 309-310 (citing Hartranft v. Wiegann, 121 U.S. 609, 615 (1887)).

[25] Id. at 310.

[26] Id. at 311.

[27] Id.

[28] Id. at 316.

[29] Id. at 317.

[30] Id.

[31] Stephanie Fischer, BIO Celevrates 30th Anniversary of Diamond v. Chakrabarty Decision, Biotechnology Industry Organization (June 16, 2010), https://www.bio.org/media/press-release/bio-celebrates-30th-anniversary-diamond-v-chakrabarty-decision.

[32] See Douglas Robinson & Nina Medlock, Diamond v. Chakrabarty: A Retrospective on 25 Years of Biotech Patents, 17 Intell. Prop.& Tech. L. J 12 (2005), available at http://bannerwitcoff.com/_docs/library/articles/Chakrabarty.pdf.

[33] Rebecca S. Eisenberg, Biotech patents: looking backward while moving forward, 24 Nature 317 (2006), available at  http://www.nature.com/nbt/journal/v24/n3/full/nbt0306-317.html.

[34] See generally Gene Quinn, Have investors lost the appetite for public IP companies?, IPWatchDog (Dec. 7, 2015), http://www.ipwatchdog.com/2015/12/07/have-investors-lost-the-appetite-for-the-public-ip-companies/id=63705/?utm_source=Website+Subscribers+%28RSS%29&utm_campaign=1c2349810e-Daily_RSS_Feed_LexisNexis_Webinar&utm_medium=email&utm_term=0_98774de295-1c2349810e-84026493.

[35] Mark F. Grady & Jay I. Alexander, Patent Law and Rent Dissipation, 78 Va. L. Rev. 305, 307 (1992).

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Taylor Swift’s Aggressive IP Management

It is undeniable that Taylor Swift is a force to be reckoned with, particularly with the staggering success of her 1989 world tour. Beyond all of the awards, endorsements, and incredible album sales, Swift has been aggressive in her pursuit of intellectual property rights. While, of course, Swift and her management team have copyright protections for her songs, it is her numerous trademark applications that have recently garnered much attention.

Phrases such as “This Sick Beat” and “Nice To Meet You. Where You Been?” join previously applied-for trademarks in Swift’s portfolio. Using the USPTO’s Trademark Electronic Search System, searching Swift as owner yields 117 trademarks that have Registeredeither been registered to her, or been applied for on behalf of Swift. Due to the category system used by the USPTO for trademarks, many of the applications are for the same mark in multiple categories. For example, “This Sick Beat” accounts for 16 of 117 trademark applications. Swift joins other musicians such as Beyoncé and Britney Spears in attempting to expand her brand using trademarks. Even Swift’s rumored adversary, Katy Perry, has taken advantage of the use of trademarks for the infamous Left Shark from her Super Bowl performance.

It is unclear at this point, as to why Swift has chosen to trademark these particular phrases, whether they are a part of a larger merchandising plan or simply the singer’s desire to protect what she believes is rightfully hers. Swift has previously expressed her views on the value of her albums saying that “music is art … [and] should not be free” in her op-ed in the Wall Street Journal. Months after, Swift pulled her music from the popular digital music service, Spotify, citing the service’s ad-supported free subscription that allows people listen to her music without paying as the reason. Swift is clearly dedicated to protecting her music’s value, which explains her aggressive trademarking.

The effects of Swift’s enthusiastic embrace of intellectual property protections are just beginning. The singer is well known for her close relationships with her fans, but with her increasing number of legal protections on her work, there are bound to be some collisions. Earlier this year, several Etsy shops were sent cease and desist letters for selling Taylor Swift products, which had some fans feeling at odds with the singer. It is unclear whetherTS these were isolated incidents, or a sign of future behavior from Swift’s legal team. Swift may be running the risk of offending her fans as she defends her work, but it is clear that she is steadfast in protecting the value of her work, which after all, is one of the main objectives of intellectual property law.

Swift also finds herself on the other side the situation, facing a lawsuit by Blue Sphere Inc., an Orange County clothing company, for trademark infringement. The suit alleges that Swift used the mark “Lucky 13”, which is registered to Blue Sphere, in a promotional sweepstakes and on T-shirts. The possible effects of the suit for Swift go beyond the possibility of paying monetary relief to Blue Sphere to include damaging a brand that has been carefully developed. Blue Sphere has been looking into Swift’s endorsement deals and investigating her trademark collection, which could cause such details be public record should the suit go to trial. Lifting the veil of secrecy about an endorsement deal could benefit competitors and be a way to incentivize a celebrity into a settlement agreement. A representative of Swift even claimed that Blue Sphere’s deposition subpoena was “to harass Taylor into a settlement” after a judge refused to limit the scope of questions during the deposition.

Swift, and other celebrities, such as Michael Jordan, are navigating the complex world of business and intellectual property law during a time when IP-intensive industries are major economic force. Like any thoughtful and discerning CEO, Swift is carefully watching over her intellectual property rights in order to protect her work and grow her brand. The outcome of the Lucky 13 infringement case should provide interesting insight into Swift’s business plans and her strategies in managing her intellectual property rights.

 

 

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Incentivizing Innovation in BioTech Industries Part I: The Importance of Incentivizing Innovation

Article I, section 8, clause 8 requires Congress to enact laws that “promote the progress of science and useful Arts.”[1] What has since been termed the Patent and Copyright Clause was subject to alPicture1most no debate during the infamous Constitutional Convention and there is little evidence of the Framers’ rational for drafting the clause and understanding of the drafted clause.[2] Resultantly, there are long-running debates surrounding how to properly interpret the immortalized clause. However, it is clear from the language of the text itself that Congress has the responsibility of enacting laws that promote progress. What needs to be promoted and how those areas should be promoted is debatable, but it is clear that there need be a system to incentivize progress, to incentivize innovation. Progress, innovation is pivotal and essential to the survival and sustenance of humanity. Progress is especially important in American society, where “intellectual property intensive[, intangible,] industries support at least 40 million jobs and contribute more than $5 trillion dollars to, or 34.8 percent of, U.S. gross domestic product.”[3] In sum, the contribution of intellectual property on the American economy exceeds the entire gross domestic product of every other country excluding only the combined European Union, China, and India.[4]

Since its conception, the patent system has served as a foundation of innovation.[5] The reward of designated intellectual property rights incentivizes innovation and creativity by “allowing inventors to reap the benefits of their labor.”[6] The patent system incentivizes innovation by providing a time-limited monopoly to the inventor(s), or investors in the instance of agreed assignments, in exchange for the details of the invention being made public. Predominantly, the time-limited monopoly rights resulting from ownership of a patent provide a means by which applicants can literally procure a return on their investments made during the course of the research and development of the claimed invention.[7] The applicant for the term of the patent has the exclusive right to exclude others from making, using, and selling the patented thing.[8] Tcarrot and stickhus, the applicant who obtains a patent has the ability to block competitors. For example, the infamous battles between technology powerhouses, Apple and Samsung, depict a situation where frenemies have been attempting to siphon direct competition for years using respectively obtained patents.[9]

Because intellectual property is such a dominant portion of our livelihood, the question becomes how should we incentivize innovation? Will the patent system continue to be sufficient, especially in light of recent questions about patentable subject matter? These questions and others will be considered in Incentivizing Innovation in BioTech Industries Part II: Defining Patentable Subject Matter.

[1] Emphasis added.

[2] Thomas B. Nachbar, Patent and Copyright Clause, The Heritage Guide to the Constitution, http://www.heritage.org/constitution#!/articles/1/essays/46/patent-and-copyright-clause (last visited Oct. 31, 2015).

[3] Intellectual Property and the U.S. Economy, USPTO, http://www.uspto.gov/learning-and-resources/ip-motion/intellectual-property-and-us-economy (last visited Nov. 1, 2015).

[4] The World Factbook, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html (last visited Nov. 1, 2015).

[5] John Wiens & Chris Jackson, How Intellectual Property Can Help or Hinder Innovation, Ewing Marion Kauffman Foundation (April 07, 2015), http://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/how-intellectual-property-can-help-or-hinder-innovation.

[6] Mark F. Grady & Jay I. Alexander, Patent Law and Rent Dissipation, 78 Va. L. Rev. 305, 306 (1992).

[7] See David Henderson, The Concise Encyclopedia of Economics: Patents, Library of Economics & Liberty, http://www.econlib.org/library/Enc1/Patents.html (last visited Oct. 27, 2015).

[8] See Bauer & Cie v. O’Donnell, 229 U.S. 1, 10 (1913). See also 35 U.S.C. § 271

[9] Geoff Duncan, Why are Apple and Samsung throwing down? A timeline of the biggest fight in tech, Digital Trends (April 4, 2014), http://www.digitaltrends.com/mobile/apple-vs-samsung-patent-war-timeline/.

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Let Me Fetch an Oatmeal Stout Lawsuit?

 

The craft beer phenomena has ushered in an era of variety in beer flavors and some unique beer names. Craft beer fans enjoy beers with names like Kentucky Breakfast Stout (Founders Brewing Company), Plead the 5th (Dark Horse Brewing), Dragon’s Milk (Holland Brewing Company), and LMFAO Stout (Pigeon Hill Brewing Company). Pigeon Hill’s LMFAO Stout was recently the subject of a possible trademark infringement issue with the band LMFAO. I caught up with Michael Brower, one of the three cofounders of Pigeon Hill Brewing Company, to find out more.

Pigeon Hill Brewing Company was founded in 2012 and the taproom opened in Muskegon in 2014. Brower comes from a family whose involvement in the liquor trade spans from the days of bootlegging into modern liquor law. Brower first became involved in craft beer brewing in college when, like most freshmen, he discovered the horrors of bad beer and the joys of flavorful craft brews. After law school, he learned how to brew beer, met his future business partner, and got to work on opening Pigeon Hill.

LMFAO Stout was the first official Pigeon Hill Brewing Company beer and was based on an original home-brew recipe. The name of the beer was chosen through a Facebook submission contest. The winning submission, “Let Me Fetch An Oatmeal Stout,” was announced January 25, 2013. LMFAO remains a popular choice at Pigeon Hill and is usually on tap in the taproom, Brower informed me.

STOUT

 

As my interview was conducted while the situation involving was still pending, Brower could not comment further. In August, Pigeon Hill received a cease and desist letter from the band LMFAO demanding that Pigeon Hill discontinue using the name LMFAO. The letter sparked a public debate about whether Pigeon Hill would be forced to change the name of their ever-popular stout. The band’s letter claimed Pigeon Hill’s stout was an infringement on their trademark on “LMFAO” and Pigeon Hill’s continued use of the name LMFAO would cause a likelihood of confusion for customers.

LMFAo

A likelihood of confusion for trademarks is analyzed under eight factors: similarity of the two marks, similarities of the goods and services involved, strength of the plaintiff’ mark, evidence of actual confusion by consumers, intent of the defendant in adopting its mark, physical proximity of the goods in the retail marketplace, degree of care likely to be exercised by the consumer, and the likelihood of expansion of the product lines. Courts usually base a trademark infringement decision on the first two factors: whether the marks are similar and whether they represent similar goods or services. The first two factors are key in determining whether a likelihood of confusion seems possible and requires further analysis.

In the case of the band LMFAO and the Stout, the marks are similar at first glance. Both marks include the letters “LMFAO,” but the beer is known as LMFAO Stout. The marks are dissimilar in that they each stand for different phrases. LMFAO Stout stands for “Let Me Fetch an Oatmeal Sout” and describes the nature of the beer. The band’s name stands for “Laughing My Freaking A** Off,” a phrase that mirrors popular internet shorthand.

LMFAO and LMFAO Stout represent different goods and services. The band produces music and performs live at concerts and events. The beer is an alcoholic beverage. While alcohol is often consumed at concerts, the goods themselves represent two different markets. The band’s music and performances are not usually associated with the craft beer scene. The band attracts a younger crowd and is associated with partying and drinking to excess. Craft beer is generally associated with young professionals and is usually consumed with a meal and with the purpose of appreciating the taste. LMFAO Stout also has a limited availability that would not place a LMFAO concert attendee in the position of confusion over whether the beer was associated with the band.

LMFAO Stout likely does not present a likelihood of confusion for consumers and the source of the beer is clear: Pigeon Hill. Ultimately, LMFAO Stout does not appear to be an infringing mark on the band LMFAO’s trademark. The situation, however, as many craft beer fans may already know, has already been resolved by the parties and LMFAO Stout will retain its name:

LMFAO Pigeon Hill

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A New Troll In Town

Green, ugly creatures living under bridges that demand payment from anyone who passes: we have all heard the fairy tales about trolls. And I think we all imagine how terrible it would be to have to deal with such creatures. In the world of patent law, patent trolls are very real and just as difficult to defeat as those in fairy tales. A patent gives the inventor property rights over the invention for a certain period of time, essentially creating a limited monopoly. This monopoly allows the inventor to charge other parties for use of their invention, thus incentivizing the creation and sharing of new ideas.Troll copy

While a clear cut definition of patent trolls does not exist, many would agree patent trolls can be described as any person or entity that does not produce the patented product or method, but charges a licensing fee to other entities that are possibly infringing on the patent or patents. A simplified example of how a patent troll is as follows: Company A (the troll) owns a patent for a widget bud does not produce said widget. When Company Be starts producing the widget (or even an arguably similar widget), Company A would demand that Company B pay a licensing fee for the widget (or face more expensive litigation). In this way, Company B is paying a “toll” to produce the product.

It is common for patent trolls to have a portfolio of patents in which they enforce. The portfolio is created when the patent troll buys patents with the sole purpose of increasing their portfolio to widen their scope of enforcement (and therefore more licensing fees). The patent trolls enforce the portfolio by sending a demand letter or providing a threat of a lawsuit against the infringers, forcing the accused to pay the fees.

Many of these patent trolls use low quality patents to collect money from companies or people that can’t afford to defend themselves in court. Many times, just the threat of the cost of litigation forces the entity to pay the troll. This extortion-like practice should be an easy fix, right? Laws could be enacted that prohibit any party from enforcing a patent if they do not produce the product. However, a solution to this problem is not that easy.

The reason fixing this problem is complicated is due to the uncertainty of what constitutes a patent troll. The definition given above is very broad, and would include institutions such as universities. Universities are awarded many patents, as such institutions are a large hub for innovation in our society. Yet universities fail to produce products from the patents. Broad sweeping legislation would eliminate universities from enforcing patents, which may limit funding for future research or have other unproductive results.

While no solution exists, Congress is currently working on passing a bill that will balance the need to eliminate unwelcomed patent trolls against the societal gains by some organizations that participate in this practice. Patent troll legislation is currently in Congress. The legislation does not broadly eliminate patent trolls, but instead tries to curb the organizations that abuse the patent system. Some of the way the bill attacks patent trolls is by increasing the requirements to file a patent lawsuit. Also, the legislation may limit the amount of discovery, reducing the cost of litigation. Lastly, it is proposed that the losing side must pay attorney fees for the side that wins. Some people believe these measures will disincentivize patent trolls from bringing frivolous lawsuits and encourage smaller entities to defend themselves in litigation.

While no overarching rule against patent trolls is plausible, the proposed solutions discussed will perhaps reduce such behavior. I believe one of the easiest ways to dampen the effect of patent trolls is to eliminate forum shopping. Because patent lawsuits can be filed almost anywhere in the United States, patent trolls can select friendly courts. A glaring example is the “rocket docket” in East Texas. It would be relatively easy to remove forum shopping, thus creating a roadblock for patent trolls to obtain their goal. While I understand the elimination of forum shopping is not the end-all in patent trolls, it would be a quick, effective step in the right direction. And while it may be a little longer until laws go into effect, one thing is clear – patent trolls must be evicted from under the bridge.

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