intellectual property

  • January 26, 2016
    Guest Post

    by Kristen Osenga, Professor of Law, University of Richmond School of Law; Senior Scholar, Center for the Protection of Intellectual Property

    *This post is part of the ACSblog Symposium on Patent Law Reform.

    I have often argued that we do not need so-called patent “reform.” But I’ve had a change of heart. We absolutely need patent reform, but not the kind proposed in the Innovation Act, H.R. 9, and the PATENT Act, S. 1137. To get the real kind of reform that will encourage a strong and vibrant innovation economy, we first need a role reversal. Let me explain.

    If you ask any first-year law student about the roles of Congress and the courts, the likely answer is that Congress makes the laws and the courts interpret them. That answer, although simplistic and lacking nuance, is essentially correct. What’s happening currently in patent law, however, is the exact opposite, and innovation is going to suffer as a result. Courts, especially the U.S. Supreme Court, are creating brand new rules, making up patent law from whole cloth. Congress, on the other hand, is considering bills that micromanage the courts, trampling on areas traditionally left to judicial discretion and seeking to procedurally stack the deck against individual inventors and small companies who own patents.

    To illustrate the above point, let’s consider two issues: (1) patentable subject matter eligibility and (2) the customer suit exception.

    Many years ago, Congress spoke plainly in 35 U.S.C. §101 about the types of inventions that were eligible for patenting: processes, machines, manufactures, and compositions of matter. The courts initially (and correctly) interpreted that provision broadly as including “anything under the sun made by man” and limited by only a few judicially created exceptions. Recently, and devoid of any legislative intervention, the courts have been chipping away at the types of inventions eligible for patent protection. After the Supreme Court’s 2014 decision in Alice Corp. v. CLS Bank Int’l, many commentators have suggested that the realm of inventions that can actually be patented has significantly diminished. The Alice opinion represents a sea change, or significant alteration, in the previously existing law . . . and yet it occurred entirely within the courts.

    The activity surrounding the customer suit exception, on the other hand, demonstrates how Congress is trying to undermine judicial discretion in favor of bright line rules that make it systematically harder for individual inventors and small companies to defend their patents. In appropriate circumstances, judges traditionally will stay a patent infringement suit against a small retailer or end-user customer in favor of a suit against a manufacturer when the infringement results from the customer using the manufacturer’s product. This makes sense, for example, when a patent owner sues a mom-and-pop coffee shop for infringement based on the coffee shop’s use of an infringing wireless router. The company that manufactures and sells the router is in a much better position than the coffee shop to dispute whether or not the router is infringing the patent. The courts have been staying cases like these for years, and it’s working well.

  • October 15, 2013
    BookTalk
    Talent Wants to Be Free
    Why We Should Learn to Love Leaks, Raids, and Free Riding
    By: 
    Orly Lobel

    by Orly Lobel, Don Weckstein Professor of Labor and Employment Law, University of San Diego School of Law

    Under the radar, the monopolization of knowledge has expanded far beyond the bargain struck in Article I, Section 8 of the Constitution.  The enumerated powers of Congress permit the legislature to secure “to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” for a limited time “to promote the Progress of Science and useful Art.” Thomas Jefferson described the act of delineating the appropriate scope of intellectual property rights as “drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not.” Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free-Riding argues that Jefferson’s embarrassment extends beyond ownership over creations of the mind.  Moreover, it extends beyond the exercise of public authority contemplated by the Constitution, and into private conduct that can exacerbate the tension Jefferson identified. The embarrassment reveals itself in full force when we focus our attention on the ways we regulate human capital – people themselves, their skills and knowledge, the social connections and the creative capacities and inventive potential that flow through the market.

    Beyond our intellectual property wars, beyond the heated debates about the proper scope of patents and copyright, we’re confronting a surge in the monopolization of human potential for creativity and invention. The past decade has seen a wild expansion of business practices which attempt to control the mobility of talent and secrets. Companies big and small are using non-compete contracts, trade secret and non-disclosure agreements, prohibitions on poaching and soliciting of customers and co-workers, and the preclusion of employee ownership of patents and copyright. Take for example David Neelman, the founder of JetBlue, who was compelled to sit on imaginative ideas that would revolutionize the airline industry for five years because he had signed a non-compete with former employer Southwest. Or Nobel laureate and former Yale University professor, 87 year old John Fenn, who was sued by Yale over his patent on a method he had invented to evaluate new drugs, including the development of innovative AIDS medication in the mid-1990s. Ironically, these pervasive business practices frequently have a counter-productive effect not only on the public and employees, but also on businesses themselves.

    Talent Wants to Be Free looks at how we fight over knowledge and talent in every industry, profession, and region, and considers the right balances of secrecy & sharing, carrots & sticks and freedoms & controls. We have vigorous debates about immigration reform, the patent system, labor unions and health care – all of which bear on how people and organizations innovate – but when we look at our core strategies on human capital, we’re losing out on rich potential, creativity, and drive. When it comes to fighting the war over talent, most of us react emotionally and territorially. But these are exciting times: there is fascinating new evidence from economics, psychology, sociology, management and law that reveal a vision of how to better wage the talent wars. Through interdisciplinary empirical research and insight from the industry leaders, the book reveals that more frequently than we have come to believe, corporations, individuals, industries and regions benefit more when talent is not subject to monopoly control.

  • September 27, 2012
    Guest Post

    By Eric Priest, Assistant Professor, University of Oregon School of Law


    China’s pervasive intellectual property piracy problem, and the resulting impact on American industry and jobs, is a constant refrain in U.S. media and even the presidential campaign.  But are some U.S. companies also benefitting from the infringement?  Some policy makers and software companies are beginning to ask whether U.S. businesses are actually indirect beneficiaries of pirated intellectual property in China (and elsewhere).  When an upstream producer such as a Chinese factory uses pirated software in its manufacturing or logistics operations, the cost of production is reduced.  Some of those savings can also be passed along to the U.S.-based firm that hired the factory, or to the retailer that sells the product.  These cost savings arguably give the overseas manufacturer and the seller of such a product in the U.S. an unfair edge over competitors in the U.S. market.

    Louisiana and Washington State passed laws in 2010 and 2011, respectively, that make it an act of unfair competition to sell a product manufactured using “stolen or misappropriated” information technology.  The Louisiana statute is terse and therefore broad, while the Washington statute contains detailed limitations on liability and requires that the defendant be given notice and have the opportunity to cure.  The Washington statute creates liability for the manufacturer as well as for certain third parties (i.e., sellers other than the manufacturer), although it limits potential third-party liability to large companies with over $50 million in annual revenue, which are better positioned to police suppliers.  

    In addition, Attorneys General from thirty-six states and three U.S. territories last November requested that the FTC consider using its broad unfair competition authority under § 5 of the FTC Act to pursue manufacturers who sell in the U.S. goods that they produced using pirated software in competition with law-abiding manufacturers.  In addition to such federal action, some state Attorneys General have indicated they would consider the possibility of using existing state unfair competition laws (the “mini-FTC Acts”) to the same effect.

  • December 13, 2011

    by Jeremy Leaming

    Renowned constitutional scholar Laurence H. Tribe is weighing in on the House’s consideration of the so-called Stop Online Piracy Act.

    CNET’s Declan McCullagh reports that Tribe, the Carl M. Loeb University Professor at Harvard Law School, has detailed why SOPA is unconstitutional. McCullagh also notes that the measure, which the House Judiciary Committee is scheduled to consider on Dec. 15, is garnering opposition from companies, such as Facebook, Twitter, Mozilla, eBay, and Google. The Motion Picture Association, Bloomberg reports, “is mounting its own counterattack in support of the legislation, through White House visits and a national advertising campaign.”

    The bill, in part, would allow the Department of Justice to seek court orders requiring Internet-service providers, search engines, among other entities, to block or stop doing business with non-U.S. websites allegedly linked to piracy.

    In a 23-page legislative memorandum, Tribe explains the numerous reasons why the measure rests on wobbly constitutional ground.