Posts Tagged: "Licensing"

This August, the Door Christian Fellowship McAllen Church made some unfortunate headlines after it came to light that the church had produced and staged a performance that made unauthorized use of original works from the blockbuster Broadway musical, Hamilton. By the end of the month, The Door had issued an apology for the unauthorized performances and agreed to pay damages and destroy any recordings of the staged performance in respect of the intellectual property protections of Hamilton’s creators. While this unlicensed and infringing use was quickly dealt with by Hamilton’s legal team, there have been other instances of recalcitrant producers who have only been held accountable for staging unlicensed theatrical works after years of infringement.

On October 25, the U.S. Copyright Office issued a notice of proposed rulemaking (NPRM) in the Federal Register to clarify the application of the derivative works exception to copyright termination rights within the context of blanket licenses administered under the Music Modernization Act (MMA). The Office is hoping to correct what it sees as a legally erroneous dispute resolution policy established by the Mechanical Licensing Collective (MLC), which administers the MMA’s blanket licenses to digital music providers, regarding the payment of royalties after songwriters exercise their termination rights to regain copyright ownership from music publishers.

Cross-Domain standard essential patents (SEPs), in the current context, denote the patents essential to two or more diverse domains that have distinct standards developed by different Standard Setting Organizations (SSOs). The concept originates from the idea that, despite the difference in standards, the domains are based on similar core technologies. So, the patents essential to the common core technologies in turn will be essential to both domains and, hence, can be termed Cross-Domain SEPs.

On September 26, Licensing Executives Society (LES) USA and Canada published the LES High Tech Sector Royalty Rates & Deal Terms Survey Report 2021. In May of this year, the 2021 Global Life Sciences Royalty Rates and Deal Terms Survey results were released. Together, the releases culminated the intense efforts by LES during the COVID-19 pandemic in preparing and launching the Surveys and in analyzing the data, presenting the results and writing the Reports. Not only do LES Royalty Survey Reports provide an update on the licensing market in the past few years, they look into the dynamics of market evolution since the 2000s. The Reports offer benchmark royalty data by various categories, such as technology field and IP type, which serve as invaluable references for licensing professionals. The 2021 High Tech Survey Report is also the only data source in the IP industry that quantifies and publishes royalty rate premiums or discounts such as exclusivity premium and advanced-stage technology premium. Through identifying and quantifying the value contributions of key license parameters such as exclusivity, technology development stage and IP type, among others, the LES team aims to develop a build-up method for royalty determination, analogous to the build-up method in business valuation.

On Friday afternoon, the IEEE Standards Association Board of Governors (IEEE SA BOG) announced they had taken action to update the Patent Policy for IEEE standards development. The updates, which will not go into effect until January 1, 2023, appear at first glance to be minimal, but will likely have an extraordinarily positive impact for patent owners.

On the second day of the IPWatchdog LIVE conference held in Dallas, Texas, earlier this month, a panel of experts who advise startups and are passionate about the licensing business model discussed the challenges and opportunities presented by intellectual property. The panelists opened the discussion by describing their experiences with the biggest mistakes startups make in regard to patents. Ian McClure, Associate VP for Research, Innovation, and Economic Impact at the University of Kentucky as well as the chair of AUTM, identified two mistakes commonly made by the approximately 1,200 startups that are spun out from university research in the United States each year.

During day one of IPWatchdog LIVE in Dallas, Texas, a panel of speakers discussing current trends and the prospects of patent monetization going forward noted that the “heyday” of patent monetization was approximately ten years ago, with several large patent awards increasing interest in patent monetization. The panelists noted two major factors which presently act as a “glass ceiling” over patent valuations. First, the inter partes review (IPR) proceedings instituted at the U.S. Patent and Trademark Office (USPTO) in 2012 as part of the America Invents Act (AIA) has made investment in patents a riskier proposition.

A while back, we set up an email alert to advise us of any legal developments involving fair, reasonable and non-discriminatory (FRAND) licensing. Somewhat to our surprise, the notion of requiring FRAND terms and conditions for obtaining access to the otherwise exclusive property rights of others is not limited to patents essential to industry standards. Rather, FRAND licensing concepts, or minor variations thereof (e.g. “just, reasonable and nondiscriminatory”), appear in government regulation of stockyards (see 7 USC §208), vehicular air pollution information (see California’s Health and Safety Code §43105.5 (7)), and airports (see La. R.S. §1:135.1), to name a few.

In a recent surprise decision, the U.S. Department of Justice (DOJ), U.S. Patent and Trademark Office, and the National Institute of Standards and Technology officially withdrew their 2019 Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments and declined to advance an alternative policy statement as a replacement. While the withdrawal of the 2019 policy statement was seen as a foregone conclusion (given the far more SEP-restrictive nature of a December 2021 draft policy statement (DPS) circulated by the agencies), moving forward without any guidance was not on anyone’s DOJ policy bingo card for 2022. The slim guidance that this withdrawal announcement does provide, however, paints a murky picture for the ability of SEP holders to obtain injunctive relief.

On May 17, 2022, the Federal Trade Commission (FTC) submitted to Lisa Barton, Secretary of the International Trade Commission (ITC), a statement they believed was relevant to the public interest considerations before the Commission in a matter involving certain UMTS and LTE cellular communication modules (337-TA-1240). The ITC in many cases will invite statements on the Public Interest, and the FTC is often invited to make a submission. It should be noted, however,  “Public Interest” in the ITC is a matter of statute, and there are four public interest factors which are statutory. Any statement in the Public Interest must address one or more of those factors. Other matters not within the statute are not public interest factors.

As we have previously explained, many implementers wish to require patent owners to establish (1) the need for licenses, and (2) that any terms offered are in fact fair, reasonable and non-discriminatory (FRAND), but without having to make any commitment to accepting FRAND licenses, and without ever losing entitlement to the same. With respect to the latter, recall, for example, Apple’s position it its case with PanOptis, namely that PanOptis had “no legal right under U.S. law to impose on Apple an obligation to negotiate a license to Plaintiffs’ portfolios of declared-essential patents or forfeit any defenses for failing to do so” (Apple Inc.’s Motion to Dismiss Count VIII for Lack of Subject Matter Jurisdiction, Optis Wireless Technology, LLC, Optis Cellular Technology, LLC, Unwired Planet, LLC, Unwired Planet International Limited, and PanOptis Patent Management, LLC v. Apple Inc., Civil Action No. 2:19-cv-00066-JRG (E.D. Texas, June 22, 2020)) [hereinafter Optis v. Apple]. Basically, such implementers want the option of capping their exposure at FRAND rates if ever found to infringe. We refer to this as an implementer wanting to have its FRAND cake and eat it too.

Measuring the quality of a patent portfolio doesn’t have to be subjective. There are a number of objective indices that measure patent families’ potential economic and reputational value, the breadth of patent claims and the statistical validity strength of a patent. The Patent Value Index, or PVIX, measures the potential economic and reputational value of a patent. PVIX scores each patent family on a curve from 0-100 using a weighted average of the GDP of the countries in which the family has granted members and the number of forward citations garnered by the family members compared to peer patent families in the same technology classes.

Four scholars with the International Center for Law & Economics (ICLE) have sent comments to the European Commission urging against any changes to the EU’s legal framework for licensing of standard-essential patents (SEPs) that would limit SEP holders’ ability to seek injunctions against alleged infringers. The ICLE scholars write: “It is simply not helpful for a regulatory body to impose a particular vision of licensing negotiations if the goal is more innovation and greater ultimate returns to consumers.” The comments come in response to the Commission’s February 2022 Call for evidence, which explained that “some users have found that the system for licensing SEPs is not transparent, predictable or efficient. This initiative seeks to create a fair and balanced licensing framework and may combine legislative and non-legislative action.” The feedback period ended May 9 and asked stakeholders to submit their views on: “(i) transparency; (ii) the concept of licensing on FRAND terms and conditions, including the level of licensing; and (iii) effective enforcement.”

Name, Image, and Likeness, or “NIL,” is the buzz word spinning around college athletics. In July 2021, the National Collegiate Athletic Association (NCAA) adopted its Interim NIL Policy (“the Policy”) which allows, for the first time, student athletes to monetize their NIL rights without losing scholarships or eligibility. Fans love college sports and cheering on athletes who play for their alma mater or favorite school teams, which creates collaboration opportunities for athletes and brands alike. In an attempt to connect their products and services with college athletes—who are the face of a billion-dollar industry—brands are jumping on the college-athlete bandwagon.

Thirty-one signatories from 29 center-right public policy organizations have written U.S. Health and Human Services Secretary Xavier Becerra, urging him to deny a petition from Knowledge Ecology International that requests use of march-in rights under the Bayh-Dole Act against the prostate cancer medicine, Xtandi. The conservative organizations represented on the letter include some of the most prominent center-right groups, such as the American Conservative Union, Americans for Prosperity, Americans for Tax Reform, the Competitive Enterprise Institute, Eagle Forum Education & Legal Defense Fund, FreedomWorks Foundation and Heritage Action for America. Conservatives for Property Rights led the letter initiative.