As we get ready to usher in the new year tonight, it is once again time to look back on the year behind us and to reflect on the biggest moments and key events in the world of intellectual property for 2019.
Likewise, we also ask a panel of industry experts for their insights for our Biggest Moments in IP series, which is the longest running series on IPWatchdog.com. This year, unsurprisingly, Section 101 reform, Federal Circuit jurisprudence, and the Arthrex decision on the constitutionality of Patent Trial and Appeal Board judges were among the biggest moments most mentioned. But other less high-profile developments, such as the USPTO’s decision on the trademark side to require U.S. counsel for foreign trademark filers, the Supreme Court’s copyright decision in Fourth Estate v. Wall-Street.com, and forum shopping trends in FRAND litigation, also made the list.
Here is what our panel of experts identified as the biggest moments in IP for 2019.
Feel free to leave your own picks in the comments below!
The biggest moment in IP for 2019 has to be just how colossally off the rails the Federal Circuit has gone relative to patent eligibility.
It all seemed to start at the very beginning of the year when the USPTO issued revised guidelines for patent eligibility. These revised guidelines provided a common-sense approach to understanding the 101 morass, picking up on what Director Iancu had been saying in public comments for some time. As it turns out, both Mayo and Alice are quite easy to distinguish if one actually reads what the Supreme Court says and looks at the claims at issue, which is what the USPTO did in the revised guidance.
The revised 101 guidance seemed to set off a maelstrom at the Federal Circuit. Within several months, the Court would say they are not bound by the guidance and then proceed to spend the rest of 2019 not only ignoring the sensible approach set forth by the USPTO but issuing a series of truly bizarre and frankly irrational decisions. How is an electrical vehicle charging station abstract? How is a garage door opener abstract? It seemed as if the Federal Circuit became so offended that Director Iancu would seek to bring stability to the mess of 101 jurisprudence they had made that they revolted and in one case even said that no matter the physicality in the claim, the claim can still be abstract, and no matter whether the claim covers what is novel and non-obvious, it can still want for inventiveness.
If the question is asked in the plural, a second big moment occurred very late when the USPTO, DOJ and NIST joint policy statement on injunctions for standard essential patents. The executive branch speaking with one voice saying injunctions can be a necessary and proper remedy even for standard essential patents is a pivotal moment.
Mr. Quinn is a patent attorney and a leading commentator on patent law and innovation policy. He is one of the 50 most influential people in IP and one of the top 300 IP strategists in the world.
Unified Patents Inc.
As a wholesale trend, the rise of private capital to finance patent litigation campaigns is probably the most significant change in the aggregate. For the first time in our nation’s history, private equity (both foreign and domestic) is driving or undergirding a substantial number of patent litigation campaigns—as is publicly known of campaigns like the Carucel, Finjan, and Realtime Adaptive campaigns, to name a few—and there are a surprising number of funders out there willing to (or at least offering to) stake patent litigations, despite the attendant risks. In terms of the most significant moment, however, I think the Qualcomm v. FTC case—both the ruling and the appellate court’s stay of the remedy—will have the biggest economic impact of any one event of the year. Agree or disagree with the FTC, the Judge Koh opinion will be much analyzed, maligned, supported, and relied upon in Standard Essential Patent analyses, and in shaping what we think of as anticompetitive in American IP.
Mr. Stroud is Chief IP Counsel for United Patents, where he manages Unified Patents intellectual property work, focusing on Patent Trial and Appeal Board (PTAB), district court, and appellate litigation, licensing, and settlement negotiations.
Lee S. Brenner
1. Supreme Court strikes down prohibition on registration of immoral or scandalous trademarks under the First Amendment in Iancu v. Brunetti, No. 18–302, 588 U.S. ___ (2019)
Will the Supreme Court’s decision in Iancu v. Brunetti open the floodgates of trademarks registering “the most vulgar, profane, or obscene words and images imaginable,” as foretold by Justice Sotomayor in her dissent? Can any prohibition on “scandalous” trademarks ever be in accord with the First Amendment?
2. Social Media insults constituting “heated rhetoric” are not defamation
In Unsworth v. Musk, No. 2:18-cv-08048 (C.D. Cal. Dec. 6, 2019), a federal jury in the Central District of California found that Tesla CEO Elon Musk did not defame cave diver Vernon Unsworth by referring to him in a tweet as “pedo guy.” Unsworth’s attorney warned that the Musk verdict would worsen the trend in defamation law of insults on social media becoming “completely open season.” 798, 809, 811 (2002).
Mr. Brenner is chair of Venable’s Entertainment and Media Litigation Group, and is a trial attorney and business litigator.
The most significant IP development of 2019 was the expansion of the issue of patent eligibility under Section 101. Interestingly, this question touched all three branches of government. In January, the USPTO promulgated a revised and detailed set of “Guidance for Determining Subject Matter Eligibility”, which was the Office’s effort at interpreting and clarifying the Supreme Court’s Alice/Mayo framework. Widely applauded, (and well-sold by the Director and his team), this Guidance has both anecdotally and empirically made a significant impact on the log-jam of 101-related applications in the Office, as well as being invaluable for guiding the drafting of new applications in the first place.
In Congress, the Senate Judiciary Committee re-established the IP Subcommittee under the bipartisan leadership of Senators Thom Tillis (R-NC) and Chris Coons (D-DE). They quickly took up a possible legislative response to reform, potentially abrogating Alice and Mayo altogether. Convening stakeholder roundtables, proposing actual statutory text, and culminating in the calling of a mammoth three-day set of hearings, including 45 witnesses representing almost all stakeholder points of view on the issue, Tillis and Coons and their staffs really put the ball in play for the first time since Alice came down. While these efforts are somewhat quiet at the moment, patent legislation is hard to achieve quickly, and it had to start somewhere.
In the Federal courts, the CAFC continued to highlight their strong concerns about interpreting Alice/Mayo, as well as expanding the technologies at play to such seemingly tangible inventions as garage door openers and vehicle drive shafts. They particularly expressed their concern at the negative consequences for some critical technologies, most particularly medical diagnostics. This was most notable in their Athena decision, which had some eight different opinions both concurring and dissenting, but in all cases begging the Supreme Court to help them out. At the Supreme Court itself, after having denied certiorari in some 80-plus 101 appeals since Alice, the Court finally stirred itself enough to at least solicit the Solicitor General’s views on the issue via the cases Berkheimer and Vanda. This hopefully at least allowed the Administration to get the Court’s attention on the importance of this question.
Will any of this activity lead to any meaningfully change in 101 or Alice/Mayo? Like the forest-and-the-trees, we are perhaps a little too close to these efforts to effectively forecast where they might go, but the fact that there were any significant efforts at all, made by all three branches of government, to even take up the issue, added up to a big IP moment this past year.
Todd Dickinson is a former Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office. Todd has also been Chief IP Counsel for two Fortune 50 companies and has also served as the Executive Director of the American Intellectual Property Law Association (AIPLA). Todd was inducted into the IP Hall of Fame in 2012 and has been recognized as one of the 50 Most Influential People in IP by Managing Intellectual Property numerous times.
As the Patent Trial and Appeal Board (PTAB) and Federal Circuit continue to pose difficulties for patent holders in the United States, we are seeing more IP friendly rulings and procedures in foreign countries, such as Germany, with the availability of injunctions, and the UK and China. We saw companies willing to proceed in these jurisdictions rather than the United States. If we are not successful in strengthening the U.S. patent system, we may see an erosion of the U.S. position in the world.
Judge Essex served as a U.S. International Trade Commission (ITC) judge for a decade, and is now Senior Counsel at Hogan Lovells in Washington, D.C. In addition to being admitted to the bars in the District of Columbia and Louisiana, he is also a registered solicitor in England and Wales.
The USPTO took swift action on the trademark side to thwart nefarious conduct stemming from China. In particular, the USPTO enacted new policies and increased internal training to deal with the influx of phony change in correspondent submissions (done to facilitate the high-jacking of brand names on online marketplaces) and the ever-rising submission of doctored specimens. As of August 1, 2019, foreign applicants and registrants are required to engage U.S. counsel. For scores of applications, this new requirement has led to the abandonment of applications with digitally altered specimens or the entry of default judgments in Trademark Trial and Appeal Board proceedings. Kudos to the USPTO for acting so swiftly.
Dyan Finguerra-DuCharme is a partner with Pryor Cashman’s Intellectual Property, Litigation and Media + Entertainment Groups. She has more than 20 years of experience litigating and advising on complex IP matters involving trademark, trade dress, false advertising, patent and copyright disputes.
Flachsbart & Greenspoon
Without any doubt: Arthrex. There wasn’t even a close second. A Federal Circuit panel finally held an aspect of the America Invents Act (AIA) unconstitutional. No IP court decision ever spurred such a quick response from the House Judiciary Committee’s IP Subcommittee. Within days of it being handed down, the IP Subcommittee took hand-wringing testimony, and began considering possible “fixes.”
But how unsatisfying was the panel’s rationale and remedy. Before Arthrex, I’d never heard anyone complain to me that PTAB panels were not political enough. Yet that rationale lies at the core of the constitutional Appointments Clause analysis. And granting a “re-do” only to parties who had preserved the issue seems stingy. The final chapter is not yet written. En banc and Supreme Court review seem likely.
Watch for an interesting tug-of-war among those who agree that there was a violation but disagree about the remedy. Was it okay to take away APJ civil service protections, without their representation and input? If so, does the general retroactivity of court decisions mean that no patentee gets a re-do (as some Federal Circuit judges apparently believe)? Patentees will continue to argue that the right cure for the violation is to make APJs no longer “superior officers” for a different reason—make APJ panels “recommendatory panels” whose decisions are not binding, a judicial solution seemingly authorized in prior Supreme Court constitutional cases.
Robert Greenspoon is a founding member of Flachsbart & Greenspoon, LLC. He is a registered patent attorney who concentrates his practice in the litigation, trial and appeal of patent and other complex cases. Mr. Greenspoon has argued numerous cases before the Courts of Appeals for the Fourth, Eighth and Federal Circuits.
Maier & Maier
In my opinion, the biggest moments in the patent area for 2019 continue to be occurring in the areas of patent subject matter eligibility and AIA trials. Although the Federal Circuit and the USPTO continue to provide constructive guidance in the realm of clear contours for patent subject matter eligibility, we are still a far cry from achieving legal certainty. The progeny of the Electric Power Group line of cases finding patent claim invalidity under the two-part test in Alice are vexing as applied to certain technical subject matter. The American Axle, Chamberlain and SemaConnect cases in the electrical and mechanical area, as well as Athena and Cleveland Clinic, are examples of problematic decisions that demonstrate that a Congressional rewrite of Section 101 is now long overdue. However, even the good intentioned Coons-Tillis Bill efforts have stalled, making future resolution of redefining Section 101 even more uncertain. Even cases like Vanda, Athena and Berkheimer are being teed up for Supreme Court review, which may not necessarily be a good thing.
In the area of AIA trials, we now have a new AIA Trial Guide from the USPTO, as well as more precedential and informative decisions, but the Arthrex decision challenging a Constitutional violation of the Appointments Clause has caused a disruption that too may require a legislative fix. This year has seen continued statutory interpretation challenges in solving the problem of how to fairly address amendments in AIA trials, appealability of decisions impacted by the one year time bar in IPR, litigation estoppel, Real-Party-in-Interest determinations, and standing to appeal adverse decisions.
Mr. Kunin is a Partner with Maier & Maier, where he specializes in all areas of patent practice. He previously spent a 35 year career at the U.S. Patent and Trademark Office, rising to spend a decade as Deputy Commissioner for Patent Examination Policy.
Jeffrey I.D. Lewis
Norton Rose Fulbright
Unquestionably, the issue overshadowing all of patents in the United States—as well as worldwide, although to a lesser extent at the moment—is “eligibility.” In the U.S., we hopefully have seen some move toward stability based upon a recent U.S. Solicitor General (SG) brief (in Hikma Pharm. USA v. Vanda Pharm.) indicating it was time for the Supreme Court to review the issue again in another case (such as Athena Diagnostics v. Mayo Collaborative Servs.). The reason I say it could be progress is that the SG acknowledged there is a great deal of confusion from the Court’s prior Section 101 decisions—particularly the Mayo/Alice line of cases decoupling Section 101 analysis from the statutory text—which the SG said should be revisited, and I think the majority of practitioners would agree. Worldwide, the U.S. confusion on patent eligibility is spreading. For instance, this fall the European Patent Office’s Enlarged Board of Appeal took under consideration a case involving the patent eligibility of computer simulations (G1/19).
In March, the Supreme Court resolved an inter-circuit split that will harm content providers. The Court (Fourth Estate v. Wall-Street.com) held that a copyright owner must actually have a work registered with the U.S. Copyright Office in order to file litigation, and not simply have an application on file. Some viewed this as underscoring the importance of filing copyright applications quickly, but in reality this harms content providers – particularly for web-based content. In the fast-paced environment of keeping content fresh, the inability to enforce ownership until a copyright registration issues – which can take weeks or even months, and that is when it is filed for “expedited” handling – makes injunctive relief almost unavailable.
Patent applications in China are way up, as is the Chinese percentage of filings across the world. This will not only be a harbinger for where IP rights are owned, but also is part of a larger signal for corporate sponsorship and focus. Look for more business areas to focus on the Chinese market and potentially reduce their U.S. attention.
The Supreme Court held in Mission Prods. v. Tempnology that a debtor-licensor’s rejection of a trademark license agreement does not “deprive the licensee of its rights to use the trademark.” This holding resolves a longstanding circuit split in the Federal Courts of Appeal about the effects of bankruptcy on trademark licenses and brings trademark licenses into alignment with other areas of IP.
Mr. is a partner at Norton Rose Fulbright, and is a past President of the AIPLA. He concentrates on patent and trademark litigation, counseling, and licensing, as well as other intellectual property and general litigation.
Center for Intellectual Property, Information & Privacy Law John Marshall Law School
AI takes centerstage: The USPTO, WIPO, as well as others across the country and around the world, are grappling in earnest with a host of AI-related issues. Few, if any, of these issues have found meaningful guidance from governments or courts this year, and those seeking easy answers may find themselves disappointed. At the same time, stakeholders need to come together and help courts and governments forge a path forward that is pragmatic, enlightened, and politically wearable.
The FTC-Qualcomm litigation: Judge Koh weighed in on how FRAND obligations impact a SEP owner’s obligation to license competitors both foreign and domestic. This debate takes place against a broader backdrop where long-cherished Chicago School concepts are eroded by a growing distrust of digital platforms and their monopoly power.
Forum shopping in FRAND litigation: The increasing prevalence of anti-suit injunctions and anti-anti-suit injunctions in FRAND litigation begs the question of what international comity means to national courts, which must decide whether to grant these requests and under what conditions. Like the proverbial canary in the coalmine, what national courts say on this issue will tell us whether the fragmentation of the political world order has also seeped into IP dispute resolution.
Daryl Lim is Professor of Law and the Director of the Center for Intellectual Property (IP), Information & Privacy Law at the University of Illinois at Chicago John Marshall Law School. He is a multi-award winning author, observer, and commentator of IP trends and how they influence and are influenced by law, technology, economics, and politics.
Lowenstein & Weatherwax LLP
From an existential perspective, 2019’s biggest IP moment was the Federal Circuit’s Halloween ruling in Arthrex v. Smith & Nephew, No. 2018-2140 (Oct. 31, 2019), that a panel of PTAB members that struck down patent claims in a final USPTO IPR decision had exceeded its lawful power under the U.S. Constitution. While the Court applied a saving remedy, it’s not every day that arguably the most important proceeding in American patent law is declared unconstitutional. The runners-up are the Court’s 35 U.S.C. § 101 decisions in Athena Diagnostics v. Mayo Collaborative Services, 915 F.3d 743, that diagnostic methods are not patent-eligible, and in American Axle & Manufacturing v. Neapco Holdings, 939 F.3d 1355, that mechanical manufacturing methods may not be eligible either. However, it should be added that the final chapters of all these stories have yet to be written. Stay tuned.
Kenneth Weatherwax is a founding and co-Managing Partner of Lowenstein & Weatherwax LLP. A Princeton-trained engineer, Mr. Weatherwax is a nationally recognized patent litigator in proceedings before the patent office and the courts.
HAPPY NEW YEAR FROM IPWATCHDOG!!!