Six Years After Alice: 61.8% of U.S. Patents Issued in 2019 Were ‘Software-Related’—up 21.6% from 2018
As an update to my posts from 2017 and 2019, it has now been more than six years since the U.S. Supreme Court’s 2014 Alice Corp. v. CLS Bank decision. Still, the IP bar awaits a clear and reliable test to determine when exactly a software (or computer-implemented) claim is patentable versus being simply an abstract idea “free to all men and reserved exclusively to none.” The USPTO’s Section 101 guidelines interpreting Alice—and the accompanying 46 examples—have not cleared the confusion, and Alice continues to distract the USPTO, courts, and practitioners from focusing properly on Sections 102 (novelty) and 103 (obviousness). The net effects still being increased cost, lower patent quality, lower patent portfolio valuations, wasted patent reform lobbying dollars and, in many instances, the denial of patent protection for worthwhile software inventions.
New USPTO Trademark Rules Seek to Streamline Filing and Crack Down on Fraud, But Could Increase Spam
New rules governing all trademark filings with the United States Patent and Trademark Office (USPTO) went into effect two days ago, on February 15. Although the headline is a move to mandatory electronic filing for virtually all trademark applications, some of the rules have caused significant controversy within the trademark bar, especially a requirement that applicants provide a contact email address for the applicant, not just their counsel. The USPTO’s shift to mandatory electronic filing is relatively uncontroversial, since more than 99% of applications under Section 1 or Section 44 of the Trademark Act are already filed electronically. There are certain exceptions under the rule for foreign applicants under international agreements, and for non-traditional scent and flavor marks, where a physical specimen will still need to be mailed to the USPTO. But for all other applicants, electronic filing will now be mandatory unless the USPTO’s filing system – the Trademark Electronic Application System (TEAS) – goes down.
IPWatchdog readers know the importance of capturing IP, whether it is patents, trademarks, copyrights, or trade secrets. This article isn’t detailing technical tips for filing patents or how to corner a strategic area of the market; the difference between a good and a great IP Manager is leadership. Capturing IP is one of many responsibilities of the IP Manager that falls in the middle of functional silos within technology companies, resulting in cross-functional barriers that must be navigated to achieve any measure of success. While the goal is to create a strong IP portfolio, the business is people. When in the middle of functional silos, the IP Manager often relies on influence, not authority, to overcome cross-functional barriers. This requires true leadership.
On January 24, 2020, the United States Space Force logo hit the news — and the photon torpedoes began to fly. Almost instantly, those familiar with the Star Trek Starfleet Command insignia called out a striking similarity, and even George Takei (who played USS Enterprise helmsman Hikaru Sulu) tweeted “Ahem. We are expecting some royalties from this…” Putting aside the actual origin of the Space Force insignia (derived from the Air Force Space Command emblem), could someone actually claim that the Space Force emblem constitutes trademark infringement on the Star Trek logo?
Let the Music Play: The Performance Rights License Marketplace Thrives Only with Vigilant Antitrust Enforcement
On January 26, CBS broadcast the 63rd Annual Grammy Awards, which celebrated America’s finest recording artists and songwriters. Drawing a global audience with performances by super stars such as Aerosmith, Blake Shelton, and Ariana Grande, the event highlighted the music industry’s talents, innovation, and extraordinary financial success. Yet, what keeps the music flowing in a thriving marketplace is the fair operation of the performing rights license marketplace made possible by vigilant antitrust enforcement. The Department of Justice, Antitrust Division (the Department) is currently reviewing the consent decrees between the federal government and two performance rights organization behemoths: ASCAP (American Society of Composers, Authors, and Publishers) and BMI (Broadcast Music, Inc.). While conducting periodic reviews of antitrust law is smart policy, altering or scrapping the music decrees would be a mistake.
In this age of polarization, it’s almost impossible to imagine Congress enacting bipartisan legislation that would benefit businesses, higher education, and consumers alike. But that is exactly what happened 40 years ago, and it is worth remembering. As has been outlined elsewhere on IPWatchdog in 1980, Democrat Senator Bayh and Republican Senator Dole wrote a bill that seemed simple, but changed the face of American innovation. Prior to the Bayh-Dole law, anyone who accepted government funding of their research had to give any resulting patent rights to the government. Superficially, that sounded fair – if taxpayer money paid for research, the taxpayer should get the benefits. But the reality was that no one benefitted. Few companies had any interest in investing the substantial resources necessary to transform an early invention into a product when the underlying patents were held and controlled exclusively by the government. And those inventions that were developed simply sat on the shelf in government offices with no plans to bring them to market. Senators Bayh and Dole recognized this problem and their bill allowed research institutions to keep possession of the patent rights their research produced.
Dr. Marco Alemán is one of 10 candidates to succeed Francis Gurry as Director General of the World Intellectual Property Organization (WIPO). The WIPO Coordination Committee will nominate one candidate on March 5 and 6, before he or she is formally appointed by the WIPO General Assembly. Alemán currently holds the post of Director of the Patent Law Division. After acting as Director of the Colombian Industrial Property Office, he started his career in 1999 at WIPO as Principal Administrator of Cooperation Programs for the Development for Latin America and the Caribbean, then as Deputy Director of the Division of Public Policy and Development, and later as Deputy Director of the Patent Law Division.
Are you bullish or bearish on the 2020 patent market? That is the question I asked a panel of experts recently. Each of the experts surveyed will participate on the faculty at IPWatchdog CON2020, which will take place in Dallas, TX from March 15-18. All those industry insiders who responded are bullish, which is an interesting change after many years of insiders being bearish, or at best cautiously optimistic. Indeed, the sentiment expressed across the board by experts from both the monetization / licensing world and litigation world is surprising, at least at first glance. And, as you will read below, while at least several people cited the uncertainty around patent eligibility in the United States, there is real optimism because license deals are getting done and policy changes show evolutionary changes in the IP ecosystem.
You come up with a brilliant idea for an invention, pour your heart and soul into reducing it to practice and spend a great deal of time and money to get a patent. You receive the patent registration certificate, frame it and hang it on your wall. You think, “This is great! I’ve got a patent and now no one can copy my invention!” You form a company and start selling your new product online. A few months later, you log on to your Amazon.com account and see that some seller in some far away country is offering your exact product on amazon.com. Now what? This is the all too familiar story clients often face, and the exact situation one of my clients—we’ll call him Bill—brought to me a few months ago. Luckily, Amazon provides weapons for patent owners like Bill to deploy in order to combat patent infringement on Amazon. Amazon’s latest tool offered to its authorized sellers is called the “Neutral Patent Evaluation Process.” In part one of this series of articles, I will outline the preliminary steps I took to initiate Amazon’s “Neutral Patent Evaluation Process.”
Climate activist Greta Thunberg is reportedly planning to register her name as a trademark based on her fears that third parties will exploit her identity for commercial gain. While registering a trademark has many advantages under U.S. law, she can likely accomplish her goal of protecting her name without the cost, delay, and uncertainty associated with the trademark registration process. As an initial matter, a trademark does not exist in the abstract. It is only protectable in connection with particular identified goods and services. Consequently, her trademark (or service mark) application would need to identify the goods or services she offers or intends to offer under the mark. To obtain registration, she would ultimately need to provide specimens showing technical trademark (or service mark) use. 15 U.S.C. § 1051.
Open innovation is a key ingredient to the development of valuable intellectual property. Research institutions, universities, and private businesses work in close collaboration with one another, sharing confidential business information, processes, and trade secrets in order to create content. But while open innovation is a boon to creativity it is also a vulnerable entry point for bad actors to exploit the open and collaborative mindset of research-focused institutions (like universities) or the faith in contractual confidentiality obligations that many companies rely upon to conduct business. Several recent U.S. government findings have placed the blame for some of the most significant threats to domestic intellectual property at bad actors in the People’s Republic of China. A report by U.S. Trade Representative Robert Lighthizer found that Chinese sponsorship of hacking into American businesses and commercial networks has been taking place for more than a decade and posed a significant threat to our nation’s economic prosperity and competitiveness.
As you’ve most likely heard, Prince Harry and Meghan Markle have decided to become financially independent of the Crown. No small task when your security costs are reported to be $1.3 to more than $7 million per year. Ouch! So, what are they planning to do? One hint can be found in the trademark application for “Sussex Royal” that they filed in England on June 21, 2019. This trademark filing provides the opportunity for many lessons to be learned.
With cannabis now legal in some form across more than 30 states, the cannabis industry is on the rise and expected to achieve a market size of more than $60 billion by the end of 2025. As with any new and growing industry, intellectual property protection will be central to innovation and investment. Several unique challenges emerge at the intersection of cannabis and intellectual property law, the first of which is obtaining protection for a cannabis-related business or invention. Two characteristics of cannabis make intellectual property protection challenging—its status as a Schedule I drug under the Controlled Substances Act and the fact that many cannabis species are naturally-occurring. Applications for cannabis trademarks, for instance, have encountered resistance at the U.S. Patent and Trademark Office (USPTO) due to cannabis’s illegal status under federal law. Unlike trademarks, however, a patent does not require an applicant to show that the product is lawfully used in interstate commerce. Rather, a patent provides the right to exclude others from the invention, and there is nothing unlawful about obtaining such a right.
Prior to the Supreme Court’s decision in eBay v. MercExchange, 547 US 388 (2006), it was fairly routine for a victorious patent owner who prevailed on a finding of infringement in a federal district court litigation to assume that a permanent injunction would issue to prevent ongoing infringement. Despite the STRONGER Patents Act seeking to overturn eBay, Congress at large has no desire to disturb this Supreme Court decision and any bill that contains a provision overruling eBay cannot be enacted. In light of eBay, the U.S. International Trade Commission (ITC), which has always played a large role in patent litigation and enforcement strategies because of its statutory authority to issue exclusion orders and cease and desist orders, emerged as an important forum for patent owners.
I recently became frustrated after reading an essay in the AIPLA newsletter by an attorney with Taft Stettinius & Hollister LLP on the topic of the new USPTO-DOJ-NIST Joint Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments. I have seldom seen a writing where I disagree with everything a man writes, with the exception of a joke and his name. I took it apart paragraph by paragraph; my comments follow in red, while the author’s original text is in black.