The IP Developments that Mattered: Insiders Shed Light on the Headlines of 2021

The new year is just a few days away, and it is once again time to ponder the biggest moments and events in the world of intellectual property from the previous 12 months. As we do each year, 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, while the role of IP and innovation in the COVID-19 pandemic continued to make the cut, other top picks included the Google v. Oracle Supreme Court copyright decision, the Biden Administration’s support for a waiver of IP rights under the Agreement of Trade-Related Aspects of Intellectual Property Rights (TRIPS) for COVID-related technologies, and the administration’s draft language on a new policy statement relating to standard essential patents (SEPs).

Here are what this year’s panel of experts identified as the biggest moments in IP for 2021.

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

 

Alden Abbott
Mercatus Center, George Mason University

The new Biden Administration changed the trajectory of IP policy in significant and unfortunate ways, taking initial steps that threaten to further undermine intellectual property rights. Most significantly, the Administration’s shocking announcement in May that it supports waiving intellectual property protections for COVID-19 vaccines strongly disincentivizes biotech pioneers and other inventors from funding high risk R&D projects that support the breakthrough patented innovations of the future. Also disturbing was language in the July Biden Executive Order on Competition that put a hold on a pending regulation prohibiting the misuse of the march-in rights provision of the Bayh-Dole Act for price control. This may bode ill for a statutory scheme that has spurred innovation for several decades by creating enhanced incentives for inventors to use federal labs. Furthermore, pronouncements by Administration officials and language in the Executive Order on Competition laid the groundwork for rescinding the Trump Justice Department’s brilliant “New Madison Approach” that shields welfare-enhancing patent licensing from inordinate antitrust risk. (For example, on December 6 DOJ and the PTO issued for public comment draft SEP guidelines that concluded  “monetary remedies will usually be adequate to fully compensate a SEP holder for infringement.”) All told, a discouraging set of developments.

Nick Aries
Bird & Bird

Looking outside the United States, I would say: (1) Germany ratifying the key legislation underpinning the Unified Patent Court and the unitary patent system, paving the way for the UPC to become reality, (2) the Supreme People’s Court in China indicating in the Oppo v Sharp judgment that it is prepared to determine FRAND terms on a global basis on the basis of a freestanding action not linked to patent infringement subject to an analysis of the facts of the individual case, and (3) an increased focus on AI and IP, in the form of decisions from various tribunals around the world in the DABUS case about whether an AI machine can be named an as inventor in a patent application.

James De Vellis
Foley & Lardner

Perhaps the most interesting thing about IP in 2021 was the resilience and calmness – the lack of chaos, in stark contrast to basically everything else. 2021 will perhaps be looked back upon as the calm before the storm, or the end of the old era rather than the beginning of a new one.  Inter Partes Reviews and the PTAB system of administrative patent judges remain intact.  Inventors must be people and not AI machines.  The Supreme Court has not further changed patent eligibility standards.  The Supreme Court did clarify, and perhaps narrow, the doctrine of assignor estoppel with the Minerva decision, but this is nothing that the patent community can’t handle.

The fact that the rate of innovation remained at or near historically high levels during a period of unprecedented business disruption was a remarkable achievement and perhaps the most important development in 2021.  COVID did not introduce delays or otherwise disrupt the patent prosecution process, no small task for the U.S. Patent and Trademark Office to accomplish.  The ability to survive this disruption will offer great returns in the future, as innovators remained able to protect their innovations in 2021, which will help enable them to accomplish their business objectives in the coming year and beyond.

Michael Dulin
Polsinelli

One of the biggest moments in IP in 2021 was the April 5, 2021, decision in the decade-long case of Google v. Oracle, wherein the Supreme Court significantly expanded the fair use defense in cases involving copyrighted computer code. In that case, Google copied 11,500 lines of “declaring code” from the Sun Java API to use in its new Android operating system. However, the Supreme Court determined that such copying constituted fair use under Section 107 of the Copyright Act. In doing so, it considered whether Google’s use “added something new, with a further purpose or different character, altering the copyrighted work with new expression, meaning or message.” The Court held that Google’s Android platform was transformative because it was designed for a mobile device, wherein the Java API was designed for desktop and laptop computers. The Court emphasized that the transformative purpose should weigh in favor of fair use, even when the alleged infringement is for a commercial purpose. This holding expressly rejected the Federal Circuit’s holding that a commercial purpose is effectively definitive in weighing whether a given use of copyrighted code can be considered a fair use. This decision was significant because it demonstrated just how powerful a fair use argument can be, even in the face of the proverbial smoking gun – proof of actual copying of source code for commercial use.

Jeff Hardin
Independent Inventor

A notable moment for IP stakeholders in 2021 was the U.S. Supreme Court ruling in Arthrex v. Smith & Nephew that “[Administrative Patent Judges ‘APJs’] exercise power that conflicts with the design of the Appointments Clause ‘to preserve political accountability’”, including new authority given by the Court to the USPTO Director as remedy—“[d]ecisions by APJs must be subject to review by the Director.” Notwithstanding Federalist No. 78’s explanation that the judiciary should “have neither force nor will, but merely judgment”, Arthrex matters at least because it shines light on the timing of a USPTO Director confirmation.

Another 2021 moment was the introduction of the Leahy-Cornyn Restoring the America Invents Act that essentially would end discretionary denial practice under Fintiv. What matters here is not so much the bill, but that stakeholders said it was too unbalanced; at least 200 inventors in Texas alone asked Senator Cornyn to withdraw it.

Finally, 2021 marked the 10-year anniversary of the signing of the America Invents Act. Surviving this long with many IP stakeholders saying the AIA needs a second look is noteworthy and something Congress should consider, especially given the inventor rallies that occurred at each USPTO office. Rally participants spoke out against predatory behavior on small businesses and inventors, for example efficient infringement and PTAB abuse, which ironically speaks to the AIA’s failure, given that its original Sense of Congress was intended to “protect[] the rights of small businesses and inventors”, not from patent trolls, but “from predatory behavior”.

Steve Kunin
Maier & Maier

In my opinion the biggest moments in IP for 2021 relate to the development and approval of the Covid-19 vaccines and therapies and the controversy generated by the call for a TRIPS waiver of IP rights held by pharmaceutical companies. I applaud the efforts of IP thought leaders like David Kappos, Andrei Inacu and Gary Locke who have pushed back hard on the call for waivers of IP rights.  As they have elucidated in their White Paper, there are more problems than solutions in a call for such waivers.  The paper’s authors propose that critics of the vaccine rollout refocus their efforts. While “they are unquestionably correct that the global vaccine rollout has been too slow—and too inequitable,” they have “settled on the wrong solution.” To fulfill its “moral obligation” to provide equitable vaccine access across the globe, the United States must focus on six key areas in which barriers to access still exist: Raw Materials, Trade Barriers, Supply-Chain Tracking, Manufacturing Capacity, Donations and Leadership.

Professor Daryl Lim
Center for Intellectual Property, Information and Privacy Law, University of Illinois Chicago School of Law

The COVID-19 patent waiver debate, Google v. Oracle, the Unitary Patent system’s breakthrough, the rise of non-fungible tokens, and the blossoming of collective consciousness on diversity, equity, and inclusion are among the developments that deserve a nod. I would add the new draft policy statement on standard-essential patents to that list.

The statement’s 11 prompts for comments signals the government is astutely keyed in on how the FRAND debate has evolved, its current flashpoints, and who matters.  Far from being prescriptive, the statement recognizes that the government does not have a monopoly on the right approach. Rather, it telegraphs that the government’s best hope for reining in the excesses of destructive brinksmanship by a small number of implementers and patent owners is to work in tandem with all stakeholders to find common ground.

Neither the draft statement nor the final product will satisfy everyone. However, grudging respect by even the most hawkish commentators so far indicates it is possible to move beyond unhelpful rhetoric to focus on underlying interests. Done right, the statement promises to be an important inflection point for cooler heads to converge and devise a code of conduct that could serve as a framework for navigating thorny IoT disputes in the mobility space and deescalating the current rash of global antisuit injunctions. Its potential for catalyzing progress should not be underestimated.

Scott McKeown
Ropes & Gray

The assault on Judge Albright’s practices in the Western District of Texas had to the most eyebrow-raising.  Whether it be his record mandamus total at the CAFC, or the scathing letters to the Judicial Conference and USPTO on his venue/trial scheduling, there has never been such a multifaceted assault on one judge. Looking forward into 2022 it is likely that the WDTX will retain its dominance as a locale for new patent suits, but for how long?  It has already lost some of its luster at the PTAB.  I expect the PTAB to switch its focus from scheduled WDTX trial dates to average time to trial – but, Albrights loss may be the ITC’s gain relative to shutting down the PTAB.  That is, until Fintiv denials are ditched altogether, which seems inevitable given the push from Leahy, the likely new Director, and legal challenges to these practices.

Gene Quinn
IPWatchdog

As if failure to provide guidance on patent eligibility and out of control Rule 36 summary affirmance practice hadn’t already undercut the credibility of the court to the point of virtual nonexistence, the Federal Circuit continued to amaze in 2021. The Court’s growing love affair with mandamus as it applies to motions to transfer filed in the Western District of Texas has been as difficult to watch. Time and time again the Federal Circuit chose supplant Judge Albright’s decisions simply because the panel disagreed, which of course is not the standard. In one case the panel even rule transfer appropriate where the requesting defendant had presented no evidence that any witness had or would refuse to appear in Texas. Plaintiffs are supposed to be able to choose the venue, and how a plaintiff can lose when there is no evidence presented by the defendant was not explained by the panel. What is clear, however, is that the Federal Circuit continues to make a mockery of its own precedent. We are at the point where certain defendants seem capable of only being sued in the district of their own choosing. If there is concern for cases being filed in a pro-patentee venue, where is the similar outcry for the constant transfer to pro-infringer venues? This one-sided faux indignation is unbecoming.

 

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