Posts in Business

Today, many companies make the business decision to infringe patented technology instead of paying a royalty to license it—so called efficient infringement. The calculation is that it will ultimately be less expensive to ignore the patent rights of innovations than to take a license in an arm’s length negotiation. Over the last 15 years, that calculus has largely proven correct, with changes to numerous laws and the introduction of additional administrative processes all conspiring to make it easier to challenge issued patents. This means that litigation is often the only way for an innovator to protect valuable intellectual property and to stop infringement. Unfortunately, lacking leverage and financial resources, many patent owners cannot stop infringement—in some instances, even after a jury trial.

Earlier this month, e-commerce giant Amazon.com issued its latest Brand Protection Report detailing steps taken by the tech titan to reduce the tide of counterfeit products being sold to consumers around the globe. While the report identifies several concrete steps taken by Amazon to prevent knock-offs from being listed for sale, there are plenty of questions that yet remain as to whether Amazon is genuinely committed to eliminating sales of fake branded products that the company has been known to ignore.

At this moment, there is a fellow riding a bus in London who will determine the fate of your secrets. To be more precise, he’s on the Clapham bus; but he has no name. In fact, he’s a fictional character originally imagined by 19th Century journalist Walter Bagehot, who thought that “public opinion” was best described as the “opinion of the bald-headed man at the back of the omnibus.” The idea was picked up by the English courts as a metaphor for the “reasonable person” standard that is applied in all sorts of cases, from criminal to personal injury to contract interpretation. It also has special application to trade secrets, which we’ll get to in a minute.

Following a week of round-the-clock deliberations, the World Trade Organization (WTO) this morning announced a deal on waiver of IP rights for COVID-19 vaccine technologies under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The final text has made almost no one happy and largely mirrors the draft text going into negotiations, with a few key changes. With respect to open questions in the draft text, the final agreement indicates that all developing country WTO Members will be considered eligible to take advantage of the waiver, but that those with “existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this Decision.” This language is primarily targeted at China, which has publicly stated that it would not use the waiver provision but had objected to language based on percentage of global vaccine exports that would have categorically excluded it. The draft text had encouraged members with vaccine export capabilities to opt out rather than to make a binding commitment.

On June 8, news reports indicated that U.S. Senators from both sides of the political aisle were confident that the American Innovation and Choice Online Act, advanced by the Senate Judiciary Committee this January, has the necessary votes to pass the Senate and move on to the U.S. House of Representatives. While several top Senate lawmakers continue to argue that the bill will enact much needed antitrust enforcement mechanisms against Big Tech, the bill has several critics and has raised midterm election concerns for some Senators facing tough re-election cycles.

On June 8, the Biden Administration announced a detente on the issue of standard essential patents (SEPs) through coordinated statements made by the United States Patent and Trademark Office (USPTO), Department of Justice Antitrust Division, and National Institute of Standards and Technology (NIST). The casual reader, or reader who only quickly glanced at the headlines, might be mistaken into believing the Biden Administration had declared war on SEP owners due to the Administration rescinding the 2019 Joint Policy Statement between the USPTO, DOJ and NIST that was biased in favor of the possibility of SEPs being like any other patent, with remedies for infringement possibly including injunctive relief. Those familiar with Administration’s efforts on SEPs will recall that a 2021 draft policy statement had been published, which swung heavily against patent owners and resurrected the debunked myth that patent owners engage in hold-up activities.

Infringing patented inventions feels like stealing, from the innovator’s perspective, much like a smash and grab at a jewelry store. Politicians refuse to fix the gutted patent system so it can protect U.S. startups and small inventors. The American Dream is slipping away, as it consolidates into the hands of just a few tech giants and sending whatever is left to China. Case in point, ParkerVision v. Qualcomm, which illustrates just how anti-patent some courts have become. In this case the importance of ParkerVision’s seminal semiconductor chip technology that helped to transform cellphones into smartphones is at issue. ParkerVision invested tens of millions in R&D, but the courts have allowed it to be taken from them and transferred to a multinational corporation free of charge.

In the winter of 2014, Leah Bassett rented her Martha’s Vineyard home to Joshua Spafford. He seemed like a nice guy, quiet and well-dressed. Joshua listed his employer as “Mile High Media.” Mile High then used the home to shoot several adult videos. Leah, the homeowner, didn’t know that they were going to use her home in this way. She was upset when she learned what they had done, but in the end, she got her revenge thanks to copyright law.

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.

At the end of January, BlackBerry announced it had completed the sale of the majority of its patents to Catapult IP Innovations, a special purpose vehicle specifically formed for the acquisition. Approvals for the transaction were granted under the 1985 Investment Canada Act and the 1976 Hart-Scott-Rodino Antitrust Improvements Act. More information on the transaction can be found here on the SEC website. The value of the deal was reported to be $600 million, a figure that makes it one of the largest patent acquisitions in the last ten years and spurs a great deal of speculation about whether it is worth it. This article explores Blackberry’s divested portfolio and disassembles some of the assumptions surrounding the portfolio and the deal’s value.

On May 9, a comment signed by a coalition of 25 law professors, economists and former U.S. government officials, and co-written by Adam Mossoff, Law Professor at George Mason University’s Antonin Scalia Law School, and Jonathan Barnett, the Torrey H. Webb Professor of Law at the University of Southern California’s Gould School of Law, was submitted to the European Commission as a response to the EU governing body’s call for evidence on standard-essential patents. Like another recent response to the EU Commission by a group of scholars with the International Center for Law & Economics (ICLE), the Mossoff-Barnett comment attempts to dispel several misconceptions about the impact that SEPs have on the commercialization of new technologies, especially major communications technologies like 4G/LTE and WiFi that have been widely commercialized to the benefit of the vast majority of global consumers, thanks in large part to the patent rights that help to structure commercialization efforts.

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.”

While some companies have not yet jumped on the cryptocurrency bandwagon, others are rolling out processes to accept payment for goods via cryptocurrency. Some companies are also embracing cryptocurrency internally, in the form of employee benefits. Earlier this year, BTCS, Inc., the blockchain technology company, announced that it will offer dividends payable in Bitcoin. This should come as no surprise, since the company was the first “pure play” U.S. publicly traded company focused on digital assets and blockchain when it went public in 2014. Continuing to lead the digital asset industry, it is now also the first Nasdaq-listed firm to offer shareholders the option to receive dividends in bitcoin.

As horrifying images continue to flow from Ukraine, politicians in the United States and Europe find themselves increasingly pressured to expand economic sanctions against Russia. On April 6, 2022, the White House announced a prohibition on new investment in Russia by any U.S. person. This move has undoubtedly been a factor in the stunning exodus of U.S. companies from the region, as it leaves management teams in legal limbo as to whether maintaining current facilities—or even repairing equipment—could be considered a prohibited “investment.”