What Mattered in 2020? Industry Experts Have Their Say on This Year’s Biggest Moments in IP

As we get ready to usher in the new year this week (hopefully in smaller groups than usual), 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 from 2020.

As in years past, we asked 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, the role of IP and innovation in the COVID-19 pandemic made the cut for many of our panelists, but cases like Booking.com, FTC v. Qualcomm, Athena v. Mayo and Arthrex were also front and center. Other high-profile developments included the Led Zeppelin Stairway to Heaven copyright case, Google v. Oracle and the U.S. government’s various efforts to crack down on China’s IP theft.

Here are what our panel of experts identified as the biggest moments in IP for 2020.

Feel free to leave your own picks in the comments below!

David H. Bernstein, Debevoise & Plimpton LLP
In a year that saw six IP cases at the Supreme Court (9% of the 69 cases the Supreme Court decided last year!), the most important by far was USPTO v. Booking.com. For more than a century – ever since Goodyear Rubber in 1888 – the Court has treated names comprised of generic terms plus the reference “Company” to be generic. Over the last decade, even though the USPTO has registered such marks as The Driveway Company, The Flagpole Company, and The Shaving Co., the USPTO has used that precedent to deny trademark protection to domain names comprised of generic terms plus gTLDs based on an alleged per se rule barring such registrations. As Justice Ginsburg aptly recognized– sadly, her last opinion for the Court – that alleged per se rule has no basis in logic, no basis in fact, and no basis in the Lanham Act. Rather, it is consumer perception that matters, and since the primary significance of Booking.com to consumers is as the source of the services (and not a generic reference to all websites at which consumers can book travel), Booking.com warrants registration just as any other descriptive mark does. The Court’s decision not only clears a path for registration of domain names, which have become critical trademarks in the digital economy, but it also provides meaningful guidance on the standards for when terms are generic and when they can be trademarks.

Trevor Copeland, Brinks Gilson & Lione

Unsurprisingly, the COVID-19 pandemic is front-of-mind for a year-end review of IP. The unbelievably rapid development of working vaccines highlights the critical importance of innovation. What has received less attention is the cost of innovation: tens of thousands of working hours and massive amounts of investment of monetary and other resources, the majority of which end up identifying “negative results” – materials that don’t work, or that are deemed not safe for widespread use (as is the nature of all basic and applied scientific research). Intense public scrutiny on all things COVID brings to the fore the ongoing debate about the value of IP protection for innovations that directly affect human life and health: IP-rights advocates highlight the importance of incentives for innovation inherent in exclusive rights, and IP-critical advocates advancing arguments about public need.

With respect to the cases that mattered:

The SCOTUS decision in Georgia v. Public.Resource.Org answered a longstanding copyright question: No, a State may not claim copyright in state-published annotations to law codes; this enhances public access to the legal system.

Grant of cert in Arthrex v. Smith & Nephew, 941 F.3d 1320 (Fed. Cir. 2019), reh’g denied, 953 F.3d 760 (Fed. Cir. 2020) has huge potential to shake up the PTAB’s powers exercised through ALJs, with far-reaching consequences for patent owners and challengers.

The SCOTUS Romag Fasteners decision helps trademark rights-owners obtain monetary remedies from infringers, while its ruling in Booking.com clarified the ability to protect trademark rights in “.com” names.

Matthew Dowd, Dowd Scheffel

There are two cases that stand out, but for vastly different reasons. First, the Supreme Court’s denial of certiorari in Athena Diagnostics Inc. v. Mayo Collaborative Services, LLC marked the nadir in the Court’s interest in patent law. The case presented a perfect opportunity for the Court to fix the Section 101 problem. Numerous parties called for the Court’s help, including the Solicitor General and former Chief Judge Paul Michel. But the Court declined—some would say the Court abdicated its responsibility to fix the law. On a positive note, with the Supreme Court seemingly having no interest in returning to Section 101 issues, the Federal Circuit will have more leeway in working within precedent to fix the current situation. Or Congress can step in to improve the law.

The second most important case was FTC v. Qualcomm, with the Ninth Circuit to the rescue. The FTC’s overreaching attempt to impose antitrust liability against Qualcomm presented a dangerous precedent against one of the United State’s most innovative companies. The Ninth Circuit recognized that the dispute of chip licensing was one that could be handled with contract and patent law instead of the more draconian antitrust remedies. Again, the Department of Justice and Judge Michel both weighed in on the legal merits, and the Ninth Circuit saw their views on the law as important contributions.

Two cases, two very different outcomes for patent owners, but two very important developments.

Elizabeth Ferrill, Finnegan

The year 2020 was a great year for international design rights modernization. China amended its patent laws for the first time in 12 years, incorporating partial design protection, extending the patent term to 15 years, and allowing infringers to request a post-grant examination from the Chinese patent office. While China has not officially announced plans to join the international Hague Design System, these changes are important steps in that direction. In preparation for Brexit, the United Kingdom set up a system to allow for comparable UK rights for issued EU Community design rights, without the need for most EU rightsholders to re-file for rights in the UK. The EUIPO, which administers EU Community design rights, joined WIPO’s Digital Access Service this year, which will save applicants time and money in perfecting their priority claims to EU design rights. South Korea has added four additional classes to its non-substantive examination process, including food, travel goods, packaging/containers, and adornment, and made treble damages available in cases of intentional or willful infringement.  And finally, Japan expanded its term for designs to 25 years and enhanced protection for design variations through a liberalization of its Related Designs system. While these changes do not represent full harmonization of design laws, they recognize the importance of design rights and in many ways will make it easier and more cost efficient for applicants to procure the rights they need to protect their innovative designs.

Meaghan H. Kent, Venable

The increased focus by stakeholders, online marketplaces and legislators on anticounterfeiting has been significant and is likely to move forward in 2021, hopefully to tangible decrease in counterfeit products. The marketplaces are engaging and taking their own voluntary measures, the Department of Homeland Security issued a report and recommendations, the USPTO is involved, and several bills were introduced: SHOP SAFE, INFORM, SANTA, CGSA, and others.

In 2020, the pivot to online classrooms, conferences, and life, generally, impacted copyright use and licensing significantly. The music license space adjusted with the need for digital performance rights increasing, book publishers quickly navigated the demand for online reading and digital use in classrooms, and social media terms took center stage in content sharing and use.

Stephen Kunin, Maier & Maier

The following were two of the most significant decisions in patent law in 2020.

Thryv v. Click-to-Call, 140 S. Ct. 1367 (April 20, 2020): The Supreme Court held that a PTAB determination of whether an IPR petition is timely under 35 U.S.C. § 315(b) cannot be judicially reviewed. The Court, in the majority opinion by Justice Ginsburg, held that § 315(b) time bar determinations are not appealable, vacated, and remanded with instructions for the Federal Circuit to dismiss for lack of jurisdiction. This decision reinforced the Congressional intent to provide the USPTO with broad discretion in making AIA trial institution decisions.

Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), reh’g denied, 953 F.3d 760 (March 23, 2020: The Federal Circuit held that USPTO APJs were unconstitutionally appointed under the Appointments Clause. The judges are not “inferior officers” and should have been appointed by the President and confirmed by the Senate. The Court then “fixed” the problem by stripping out the civil servant protections set forth in 5 U.S.C. that prevented the judges from being fired without cause. The case is now before the Supreme Court on certiorari. If the Federal Circuit’s decision is not reversed it will require Congress to enact legislation to correct the problem. The U.S. Government’s position is predicated on the finding that APJs are inferior officers that have been duly appointed.

Daryl Lim, Center for Intellectual Property, Information and Privacy Law, The University of Illinois at Chicago, John Marshall Law School

FRAND: The willingness of national courts to declare global fair, reasonable, and nondiscriminatory (FRAND) terms will exacerbate the rash of anti-suit injunctions and anti-anti-suit injunctions seen in FRAND litigation this year. A détente is possible, but the solution needs to be comprehensive, collective, and commercially sensible. WIPO can help broker that consensus and anchor those efforts around its Arbitration and Mediation Center. International arbitration institutions with a global reach can play their part in individual cases. To do so successfully, they will need to offer a value proposition to bring together bickering stakeholders, some who may prefer folding forum shopping into their litigation tactics. WIPO, in particular, has an opportunity to prove both its continued relevance and the value of multilateralism. It should not squander it.

Antitrust: The tide turned in 2020 in favor of antitrust defendants in cases involving standard essential patents. The Ninth Circuit’s Qualcomm decision effectively excludes antitrust law from FRAND disputes, for now, leaving implementers to find succor in patent and contract law. Patent misuse and exhaustion may have new avenues for doctrinal expansion. Implementers and owners should study them carefully. If the Supreme Court accepts a cert petition from the FTC, we may see another Actavis in the making.

AI: The world made significant progress articulating where AI fits into IP doctrine and where it does not, but the devil remains in the details. [see my earlier post for details].

Charley Macedo, Amster, Rothstein & Ebenstein LLP

From a PTAB perspective, this past year we have been seeing the repercussions of the Federal Circuit’s surprising decision in Arthrex v. Smith & Nephew that PTAB APJs were “principal officers” and thus not constitutionally appointed.  After the Federal Circuit refused to take up the issue in en banc, the Supreme Court accepted certiorari on the threshold issues as we advocated in our amicus brief at the certiorari stage.  The implications of this decision will impact not only the IPRs, PGRs and ex parte appeals handled by PTAB APJs, but could have more lasting implications for our administrative state and the role of administrative law judges in general.

Tony McShane, Neal Gerber Eisenberg

If last year was the year of patents and trademarks (prominent provisions of the America Invents Act and the Lanham Act were found to be unconstitutional), 2020 was the year of significant developments in Copyright law. While we await the Supreme Court’s decision in Google v. Oracle (oral arguments were held in October), which will establish the degree to which a fair use can be made of a software developer’s APIs, there were several significant rulings that give artists more latitude in using prior works.

In the Ninth Circuit, Led Zeppelin was finally exonerated from allegations that its iconic Stairway To Heaven infringed the lesser known Taurus by the 1970’s band Spirit. After first rejecting the “inverse ratio rule,” which would lower the standard of proof for establishing substantial similarity where the there is a high degree of access to the copyrighted work. It then emphasized that “giving exclusive rights to the first author who incorporated an idea, concept or common element would frustrate the purpose of the copyright law and curtail the creation of new works.”  The jury has thus been properly instructed that copyright does not protect common musical elements, such as descending music scales or short sequences, and its judgment that Led Zeppelin did not copy protectable elements of Spirit’s song stands.

Other decisions quickly followed. The Central District of California vacated a 2.8 million dollar verdict against Katy Perry involving her hit Dark Horse on the basis that there was not a showing of copying of protectable elements, and then dismissed a case against The Weeknd involving his A Lonely Night on similar grounds. The case against Ed Sheeran alleging that his Thinking Out Loud infringes Marvin Gaye’s Let’s Get It On will be resolved by the application of the same issue when the case goes to trial next year. Artists have also been given more leeway to sample music. The Second Circuit affirmed that Drake’s Pound Cake gave a new meaning to a 35 second sample of a prior work and was hence a transformative, fair use. Nikki Minaj’s private, experimental sampling of a Tracy Chapman song – leaked to a radio station – was also deemed a fair use. Collectively, these decisions give artists, and potentially many others, more freedom in making selected uses of pre-existing works.

Nathan Mutter, Holland & Hart

For owners of standard-essential patents (SEPs), 2020 brought several key developments from jurisdictions across the globe. In Unwired Planet v. Huawei, the UK Supreme Court, in its interpretation of the European Telecommunications Standards Institute (ETSI) patent policy, granted power to English courts to establish the royalty rates and the fair, reasonable, and non-discriminatory (FRAND) terms for worldwide licenses; and to grant injunctions for enforcing these licenses within the UK. The German Federal Court of Justice (FCJ) clarified in Sisvel v. Haier that implementers of SEPs defending against an injunction should express an unconditional willingness to take a license on FRAND terms without employing negotiation delay tactics or waiting for a judgement of patent validity or infringement.

In the United States, the Ninth Circuit reversed an FTC district court ruling against Qualcomm’s original equipment manufacturer (OEM) licensing practices, holding that Aspen Skiing’s antitrust duty to deal did not apply to the OEM-license agreements and that the alleged breaches of FRAND commitments are matters of contract law rather than anticompetitive behavior under the Sherman Act. Although jurisdictions have not completely harmonized on many important aspects surrounding SEPs, these cases seem to suggest a trend across the world to strengthen the rights of SEP holders and to grant increased discretion in their licensing and enforcement practices.

Adam Rehm, Polsinelli

COVID-19 brought dramatic changes to the world in 2020 that were reflected in IP across many industries. The global focus on treatments and vaccines led to unprecedented breakthroughs. Meanwhile, technology supporting remote environments, digital healthcare, and other social distancing measures were launched rapidly. These big moments will have long lasting effects in the IP space, both with companies protecting new developments with IP and inadvertently stepping on others’ existing IP rights through these rapid changes. Similarly, 2020 accelerated the shift in retail from brick and mortar to online marketplaces, bringing with it a significant rise in counterfeits and knockoffs. This shift and the rise in counterfeits and knockoffs drastically impacted many companies and will likely change how companies think about IP going forward, including which types of IP protection mechanisms to use.

Gene Quinn, IPWatchdog, Inc.

For many years, the narrative has been that hold-up by patent owners, perhaps particularly by those owning standard essential patents (SEPs), is the problem. The truth, however, is hold-out (i.e., the refusal to license patents despite use) reached pandemic levels over the last decade. Notwithstanding, throughout 2020 we saw changing judicial views toward patent owners all over the world, particularly toward those with SEP portfolios. The Ninth Circuit overruled Judge Koh’s antitrust decision in FTC v. Qualcomm; in the United Kingdom the much anticipated decision in Unwired Planet v. Huawei was decided by the UK Supreme Court and held that it is appropriate for UK courts to set worldwide FRAND rates; and the UK Supreme Court ruled that SEP holders are allowed to offer different FRAND rates to different licensees and that an SEP hold does not abuse power as long as there is a showing of a willingness to license. Then, on the heels of Unwired Planet, the German Federal Court of Justice agreed in Sisvel v. Haier that an SEP holder can offer different rates to different licensees. The Sisvel court also explained that the SEP holder is only required to make a FRAND offer if the SEP holder has received an adequate declaration of a willingness to license. All of this together with the U.S. Department of Justice issuing Avanci a positive business review letter (BRL) regarding its proposed patent pool, and Avanci also prevailing in antitrust litigation regarding licensing of SEPs, 2020 was a big year for SEP owners.

Bhanu K. Sadasivan, PhD., McDermott Will & Emery

Illumina Inc. v. Ariosa Diagnostics Inc. (Fed. Cir. 2020) opened a new category of patent eligible claims (method of preparation) in life sciences. With no guidance from the Supreme Court and no assistance from Congress on patent eligibility, for patent owners this decision was a fresh breeze of patent eligibility delicately shifting the detritus of dead patent claims.

Where to sue a generic drug company got more challenging with Valeant Pharmaceuticals North America LLC v. Mylan Pharmaceuticals, Inc. (Fed. Cir. 2020) decision that for venue purposes, infringement occurs only in districts where actions related to the submission of generic drug application (ANDA) happens.

New calculus on filing an IPR on patents in a concurrent district court litigation became necessary based on guidance provided in Apple v Fintiv (PTAB 2020), on factors, PTAB will consider in deciding whether to deny or institute an IPR petition.

Cynthia Blake Sanders, Baker Donelson

The most notable IP product of 2020 was Zoom. Free to everyone, soon we were inviting our families and friends on Zoom for luncheons, cocktail parties and holiday gatherings, and then the U.S. Supreme Court began using Zoom for oral arguments and broadcast the hearings on C-Span, where anyone could listen to the deliberations. Many colleagues hope that the Court will continue broadcasting arguments online even after we can congregate for hearings again. The first oral argument on Zoom was the Patent and Trademark Office v. Booking.com, which included a fascinating discussion among the justices about consumers’ recognition of generic marks.

The notorious copyright troll, Richard Liebowitz, was suspended from the practice of law in late November. The grievance committee for the Southern District of New York is investigating Liebowitz for filing numerous frivolous copyright lawsuits, lying to the court, and violating court orders. There are many other copyright trolls who should also be stopped for harassing court systems across the country.

Saving Section 230 of the Communications Decency Act is vitally important to the internet and users’ speech on websites, social media, and online platforms. Some users fear that Section 230 censors speech, however, the statute provides immunity from civil liabilities for online providers who remove or restrict content from their platforms that are considered “obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected”, as long as they act “in good faith” in taking such actions.

Finally, the most important IP this year are the arrival of the first batches of Coronavirus vaccines – just in time for the Holidays.

Karen Sebaski, Holwell Shuster & Goldberg LLP

In this unprecedented year, global efforts to develop safe and effective vaccines to combat the novel COVID-19 virus have been front and center. The breadth of collaboration between competitors, government entities, and other institutions has been a hallmark of 2020, and patent rights are an important aspect of such collaborations. Another important development is the Supreme Court’s recent grant of certiorari in three cases related to Arthrex, where the Federal Circuit found that administrative patent judges have been acting as principal officers that must be (but were not) appointed by the President and confirmed by the Senate. If the Supreme Court agrees with the Federal Circuit but finds that its remedy of removing employment protections was ineffective, then, although fairly unlikely, this case has the potential to broadly impact the PTAB and all of its issued decisions.

William Stroever, Cole Schotz PC

One of the biggest moments in the trademark arena in 2020 had to be the Supreme Court’s Booking.com decision. While the decision may not have been especially glamorous, it was significant in its focus on trademark significance as the most important consideration in trademark registrability. Trademark significance has always been the touchstone of trademark registrability, and bright-line rules remove the consumer (arguably the most important actor in trademark law) from the analysis. Here the Supreme Court struck down a bright-line rule against registration of the combination of a generic term and a top-level domain designation and recognized that such a term might be registrable depending on the significance to consumers.

Jonathan Stroud, Unified Patents

It’s a tough choice, but of everything, the breakup of the failed Intellectual Ventures Fund III portfolio and the attendant diaspora of patent transfers-with-backend, newly formed NPEs, and the resulting wave of letter campaigns and litigations filed throughout the year—along with the new lineup of serial filers, from IP Investments Group, IP Edge, Longhorn IP, the Jon Rowan entities, IP Valuation, and other newer recipients of patent transfers from a thoroughly diminished IV—probably had the biggest impact on litigation dockets, the patent bar’s workload, and U.S. companies’ dockets.

The patent bar might not be watching this as closely as other matters, but the Oracle v. Google case has implications beyond just the Java APIs. Should APIs be protected by copyright, it could dramatically change the landscape of everything from open-source coding and cloud computing to cryptography and streaming media, and all types of computer code-related businesses. It will also raise questions about what other types of code are protected, and has the potential to chill code sharing and collaborative innovation, or in the alternative, to potentially empower entrenched legacy developers of APIs and other codes to push for more royalties.

The breakthroughs with the many vaccines and the IP issues that came along with that race (Moderna effectively donating their IP to the world, for their own reasons, and the OPEN COVID pledges and discussions around compulsory licensing, for instance) have certainly been front-of-mind all year, and have the potential—but not the likelihood—of making a major lasting impact on government intervention in the scope of patent protection in the biopharma space here and worldwide, but the push for more freedom-to-operate appears to have been beaten back by the powers that be; the steady rise of NPE suits and the return of the mass-filing and litigation-financed NPEs is certainly noteworthy; and while it isn’t a moment, the steady string of rulemaking from the USPTO certainly has the potential to accelerate the number of grants, denials of post-grant petitions, and revival of thought-dead district court litigations.

Peter Toren, IP Litigator

One of the biggest developments in 2020 was the government’s continued crackdown on economic espionage with a connection to China and U.S. nationals of Chinese descent. This crackdown has affected the U.S. relationship with China and created concern among the Chinese-American community that they may be prosecuted. This year marked the two-year anniversary of the Department of Justice’s (DOJ’s) “China Initiative,” which was intended to increase the focus on the investigation and prosecution of trade secret theft and economic espionage with a Chinese connection under the Economic Espionage Act (“EEA”). According to the DOJ, it charged three economic espionage cases under 18 U.S.C. § 1831 (the trade secret was intended to benefit the Chinese government). In addition, since the beginning of the initiative, the DOJ has charged more than 10 cases in which the trade secret has some alleged nexus to China and three defendants pleaded guilty in those cases over the past year. FBI Director, Christopher Wray stated that there are more than 1,000 investigations pending involving China’s attempted theft of U.S. based technology.

The crackdown on Chinese scientists is not without its critics, who are concerned that DOJ’s strategy is ineffective against combatting security threats and are harmful to the Asian American Community, and has also damaged American leadership in science and international collaboration on basic research. Finally, although it is not clear whether the Biden administration will continue the China initiative, its head, John Demers stated that “[t]here is no turning back the clock to an era when free market liberal democracies turned a blind eye to the PRC’s theft of intellectual property…”

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This article was updated on 12-28 at 3:48 PM.