Posts Tagged: "Licensing"

By now, news of MIT and Harvard’s Broad Institute’s victory over the CVC group (the University of California-Berkeley, the University of Vienna, and Emmanuelle Charpentier) in a dispute over genome-editing CRISPR technology has spread like wildfire in the biotech industry and academia. To recap, the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) ruled that the Broad Institute (Broad) was the first to invent single-guide CRISPR-Cas9 gene-editing technology for use in eukaryotes. Furthermore, the judges ruled that “CVC fails to provide sufficient, persuasive evidence of an earlier reduction to practice or conception, as they are legally defined, of each and every element of Count 1 before Broad’s evidence of reduction to practice.” While the decade-long patent battle over the Nobel Prize-winning technology might have come to an end with Broad breathing a sigh of relief and CVC contemplating whether to take it to the next level, this has left some biotech companies scrambling to renegotiate their licensing agreements.

The U.S. Court of Appeals for the Fifth Circuit on Monday vacated and remanded a district court decision that had dismissed Continental Automotive Systems, Inc.’s suit against several standard-essential patent holders and their licensing agent, claiming violations of federal antitrust law and state law. The U.S. District Court for the Northern District of Texas dismissed with prejudice Continental’s Sherman Act claims for lack of antitrust standing and, alternatively, for failure to plausibly plead certain elements. Continental appealed, but the Fifth Circuit said Continental’s claims should have been dismissed for lack of Article III standing because it had not proven that the SEP holders had “denied Continental property to which it was entitled and that Continental thereby suffered a cognizable injury in fact.”

In its second appeal to the U.S. Court of Appeals for the Federal Circuit (CAFC) regarding the sealing of documents in several related cases against Apple, Uniloc scored a win when the CAFC said today that the United States District Court for the Northern District of California failed to comply with its original remand instructions, constituting an abuse of discretion. The appellate court for a second time ordered the district court “to make particularized determinations as to whether the third-party licensing information sought to be sealed should be made public.”

On January 19, Qualcomm filed a brief in opposition to Apple’s petition for certiorari to the U.S. Supreme Court, arguing Apple failed to make the requisite evidentiary showing to obtain Article III standing. In 2017, Qualcomm filed suit against Apple, alleging Apple’s mobile devices infringed five of its patents, two of which are at issue here, U.S. Patent No. 7,844,037 (the ‘037 patent) and U.S. Patent No. 8,683,362 (the ‘362 patent). Apple counterclaimed, urging the court to invalidate those five patents. Additionally, Apple filed a simultaneous challenge to two of the patents through inter partes reviews (IPRs).

Some say the definition of insanity is doing the same thing over and over while expecting a different outcome. That would appear to be the case with the recent refiling of a petition by Knowledge Ecology International (KEI) to the National Institutes of Health (NIH) asking it to march in under the Bayh-Dole Act to force licensing to additional parties of the prostate cancer drug Xtandi, because of its cost. The law allows academic institutions, companies and federal laboratories to own and license inventions made with government support. Similar petitions were rejected by NIH and the Department of Defense (which funded the research on the underlying invention) in the Obama/Biden Administration for a simple reason: the law is for the commercialization of federally funded inventions; it does not allow the government to set prices for successful products.

On January 12, a coalition of 28 property rights groups signed a letter addressed to U.S. Attorney General Merrick Garland and Assistant Attorney General for Antitrust Jonathan Kanter asking those officials to reconsider and withdraw a draft policy statement issued in early December regarding licensing negotiations and remedies for standard-essential patents (SEPs) subject to voluntary fair, reasonable and non-discriminatory (FRAND) commitments. According to the coalition, the U.S. Department of Justice’s (DOJ) statement will only serve to bolster the fortunes of China, the major economic rival to the United States, by allowing Chinese tech implementers to infringe SEPs without respect to the rights of U.S. innovators.

In Part I of this series of articles, we provided an overview of the 2013 and 2019 policy statements that preceded the 2021 Draft Policy Statement. In this Part II, we consider the language of a specific licensing commitment made to European Telecommunications Standards Institute (ETSI), and various legal pronouncements that have been made in relation thereto.

The Justice Department’s December 6, 2021 Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments (“2021 DPS”) badly misses the mark and merits a failing grade. By contrast, the 2019 PS (issued by the Justice Department, NIST, and the U.S. PTO) is eminently sound, and merits being reaffirmed. The DPS should be viewed in the context of the benefits conferred on society by patents that read on standards, commonly referred to as standard essential patents (SEPs). Given the economic importance of SEPs, public policy should encourage investment in them and ensure that they receive adequate legal protection. Such sound policies inform the New Madison Approach (NMA), publicly described by Assistant Attorney General for Antitrust Makan Delrahim in 2018.

Even as Europe and the rest of the world continued to face the unprecedented challenges of the COVID-19 pandemic in 2021, the development of 5G and other Standard Essential Patent (SEP)-enabled technology standards has continued at an unabated pace. While the year has not yet ended, more than 100,000 technical contributions have already been submitted at 3GPP meetings for 2G, 3G, 4G and 5G in 2021 – a near-record yearly contribution count. The invention and standardization of massive, complex communication technologies continues to generate significant numbers of SEPs. According to IPlytics data, the cumulative number of self-declared SEP families has surpassed 72,000 in 2021, indicating a five-fold increase in just 10 years.

Your company and its business have been built around the strength of a trademark license from a third-party licensor. You have invested heavily in the brand. Now, however, your trademark licensor is in financial distress. Bankruptcy is not beyond the realm of possibility. Perhaps the licensor has asked to renegotiate the terms of the trademark license or threatened to terminate the license once a chapter 11 bankruptcy case is filed. What are the respective rights of the distressed trademark licensor and your company, as trademark licensee, in this situation? Is your company at risk of losing everything invested in reliance on the license?

Standard Essential Patents (SEPs) are on the rise; the number of newly declared patents per year has almost tripled over the past five years. There were 17,623 new declared patent families in 2020, compared to 6,457 in 2015 (see Figure 1). The 5G standard alone counts over 150,000 declared patents since 2015. Similarly, litigation around SEPs has increased. One of the driving factors of recent patent litigation is the shift in connectivity standards (eg, 4G/5G, Wi-Fi) that in the past were mostly used in computers, smartphones and tablets, but are now increasingly implemented in connected vehicles, smart homes, smart factories, smart energy and healthcare applications. Another reason why litigation may rise further is the belief that large SEP owners such as Huawei, ZTE or LG Electronics may soon sell parts of their SEP portfolios, which may likely end up in the hands of patent assertion entities (PAEs). One way or another, it is anticipated that the majority of patent holders will actively monetize their SEPs covering standards such as 5G, Wi-Fi 6 or VVC in this fast-moving, high-investment environment. Any company adopting these standards must decrease operational risk and expense exposure by taking a proactive strategy towards SEPs rather than a reactive one.

Question: how do you make money from a secret formula for a product that smells and tastes horrible and that no one wants? Answer: you make everyone believe they have a medical problem that only this stuff can solve. Back in 1879, Joseph Lawrence, a St. Louis doctor, was experimenting with surgical disinfectants. This was a new thing. In the 1860s, a British surgeon named Joseph Lister was the first to perform surgery antiseptically, using carbolic acid as a disinfectant. Inspired by Lister, Lawrence came up with a compound of alcohol and essential oils that seemed to kill whatever bugs it touched. To honor Lister (and presumably to take advantage of his fame), Lawrence named the concoction “Listerine.”

On November 12, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed the decision of the U.S. District Court for the Northern District of California that compelled arbitration and dismissed Rohm Semiconductor USA’s declaratory judgment action without prejudice, holding that an arbitrator must determine arbitrability. In 2007, Rohm Japan and MaxPower Semiconductor entered into a technology licensing agreement (TLA). According to the TLA, Rohm Japan and its subsidiaries were permitted to use certain power-related technologies of MaxPower developed under a Development and Stock Purchase Agreement in exchange for royalties paid to MaxPower. In 2011, the TLA was amended to include an agreement to arbitrate “any dispute, controversy, or claims arising out of or in relation to this Agreement or at law, or the breach, termination, or validity thereof.” Further, the amendments provide that arbitration must be conducted “in accordance with the provisions of the California Code of Civil Procedure (CCCP).”

A judge has affirmed the ability of the UK courts to settle FRAND terms of a patent license covering foreign patents, despite the defendants challenging the court’s jurisdiction. But in his judgment, published on November 4 20201, His Honour Judge Hacon noted that the current framework for settling a global license between owners of standard essential patents (SEPs) and implementers “is plainly not satisfactory.” He explained: “[I]t does encourage expensive parallel litigation in several jurisdictions and more uncertainty than is necessary. I doubt that it can be sustained in the long term.” The case is one of many that SEP owners have brought before the courts since the UK Supreme Court judgment in the Unwired Planet and Conversant litigation established English courts’ jurisdiction to set global FRAND terms in August 2020.

The phrase “for the avoidance of doubt” must be a Microsoft Word shortcut that comes standard in some legal IT package. Why do we say that? Well, we recently received an IP licensing agreement from an attorney working at a large law firm located in a large city, serving a large client, and presumably charging a large hourly fee. It seemed as though every 50th word in the agreement was “for the avoidance of doubt.” Now, this is not a personal attack on this particular attorney or law firm. We have seen the phrase used way too often and do not understand why. Perhaps this is just a phrase that makes agreements sound more legalese or maybe the attorneys in question think it makes certain provisions in the agreement more “airtight?” Nonetheless, we ask all of you to please stop!