Category: Intellectual Property

Adding “.com” to Generic Term May Open Route to Trademark Protection According to Supreme Court

Generic terms—those words that actually name a product or service—are ineligible for trademark protection under current United States trademark law. The United States Patent and Trademark Office (USPTO) decided that adding “.com” to an otherwise generic term was not sufficient to allow trademark registration of the “generic.com” composition. In the matter at hand, the internet website Booking.com was refused trademark registration of its name based on this decision by the USPTO.

On June 30, 2020, however, the United States Supreme Court reversed this decision, holding that adding “.com” to an otherwise generic—and thus ineligible for registration—term may be registered. The Court said, a generic.com term is only generic if consumers and customers take the term, as a whole, as generic. The Court noted that, in the lower court proceedings, evidence had been presented that consumers do not view Booking.com as a generic website to book hotels and such, but rather associated it with a particular company.

The USPTO raised the concern that allowing such trademarks to be registered would be akin to allowing a business to add the word “Company” to a generic term and noted that this is not permitted. The Court, however, noted that, unlike business names, domain names are single use—only one “generic.com” domain name exists for each possible generic term. In addition, the Court said, the USPTO has other tools in its arsenal, such as insistence of a disclaimer of the generic term, to guard against a particular generic.com trademark holder from exerting undue control over other trademarks that include the generic term. This, the Court said, further shows that there is no basis to deny Booking.com the protection of a federally registered trademark.

This decision opens the door to a new category of potentially protectable trademarks: generic terms with “.com” added to the end. However, it is important to note that whether a generic.com trademark could be registered depends in large part on how that trademark is viewed by consumers. Booking.com is registerable because consumers attribute that trademark to a specific company; however, this may not be true in every case. Much of whether a generic.com brand name is going to be able to be trademarked is likely to depend on evidence showing how consumers view the name; such evidence could include consumer surveys, evidence of marketing efforts, and evidence of long-term use. Nevertheless, companies who wish to use their most basic and generic description of the goods and services they offer as a part of a trademark now have another avenue by which to seek protection. However, it will be important to consider and prepare for questions that will likely be raised by the USPTO, including why the particular generic.com trademark is not viewed by consumers as generic, in order to raise the likelihood of obtaining trademark protection.

© 2020 Davis|Kuelthau, s.c. All Rights Reserved

For more on the recent Booking.com decision, see the National Law Review Intellectual Property Law section.

Consumer Perception is Key to Registration of Generic “.com” Marks

In an 8-1 decision, the Supreme Court held in U.S. Patent and Trademark Office v. Booking.com that “generic.com” marks may be registered trademarks or service marks when consumers do not perceive them as generic.

Booking.com is a travel company that provides hotel reservations and other services under the brand “Booking.com,” which is also the domain name of its website. Booking.com filed applications to register four marks in connection with travel-related services, each containing the term “Booking.com.”

A United States Patent and Trademark Office (USPTO) examining attorney and the USPTO’s Trademark Trial and Appeal Board (TTAB) both concluded that the term “Booking.com” is generic for the services at issue and is therefore unregistrable. According to the TTAB, “Booking” means making travel reservations and “.com” signifies a commercial website. The TTAB ruled that customers would understand the term “Booking.com” primarily to refer to an online reservation service for travel, tours, and lodging. Alternatively, the TTAB held that even if “Booking.com” is descriptive, it is unregistrable because it lacks secondary meaning.

Booking.com sought review in the US District Court for the Eastern District of Virginia. Relying in significant part on new evidence of consumer perception, the district court concluded that “Booking.com”—unlike “booking”—is not generic. The “consuming public,” the court found, “primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” The Court of Appeals for the Fourth Circuit affirmed the district court’s judgment.

During oral argument at the Supreme Court, the USPTO argued that the combination of a generic word and a “.com” must also be generic. The Court rejected this per se theory, ruling that whether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel reservation services. According to the Court, if “Booking.com” were generic, one might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” Additionally, one might similarly expect that a consumer, searching for a trusted source of online hotel reservation services, could ask a frequent traveler to name her favorite “Booking.com” provider. However, as noted even by the USPTO and the dissent, only one entity can occupy a particular Internet domain name at a time, so a “consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity.”

The Court further opined that the USPTO’s fears that trademark protection for “Booking.com” could exclude or inhibit competitors from using the term “booking” or adopting domain names like “ebooking.com” or “hotel-booking.com” are unfounded. According to the Court, this is an issue for any descriptive mark and comes down to a likelihood of confusion analysis.

Justice Sotomayor’s Concurrence

In a concurring opinion, Justice Sotomayor agreed that there is no per se rule against trademark protection for a “generic.com” mark. However, she cautioned the use of surveys as they can have limited probative value depending on the survey design.

Justice Breyer’s Sole Dissent

Justice Stephen Breyer, the sole dissenting justice, argued that the majority disregarded important trademark principles and sound trademark policy. According to Justice Breyer, “[t]erms that merely convey the nature of the producer’s business should remain free for all to use.” Thus, under the majority’s approach, many businesses could obtain a trademark by adding “.com” to the generic names of their products, which Justice Breyer claimed could have widespread anticompetitive effects, and the majority’s reliance on the need to prove confusion and the statutory descriptive use privilege to protect competitors, underestimates the threat of costly litigation.

Implications

The decision in Booking.com expands trademark protection for seemingly generic marks simply by adding “.com” to the mark. A registrant need only rely on the consumer’s perception of the mark, which can be shown by the use of surveys. Thus, even with Justice Sotomayor’s caution against the use of surveys, surveys are likely to become more important during the registration process and in any subsequent litigation.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.

For more on the Booking.com case, see the National Law Review Intellectual Property Law section.

There’s a Fake News Pandemic. Could COVID-19 and Trademarks be the Cure?

As political divides widen, accusations of differing viewpoints being “fake news” have become almost commonplace.  But during the COVID-19 pandemic, fake news has taken a more dangerous and sometimes deadly turn.

Fake news stories with fabricated COVID-19 data, sensational origin stories (it was NOT predicted by Nostradamus or created in a lab in China as a biological weapon), and baseless advice on how to protect against the illness are spreading almost as fast as the virus itself.

Fake news around COVID-19 has been directly linked to higher rates of infection, a rise in hate crimes and discrimination, increased anxiety, and further economic devastation, all of which exacerbate the current pandemic.  Even more troubling, information learned from fake news is more persistent and longer-lasting in a reader’s mind than genuine news sources because of its often sensational nature.

Fake news is a pandemic, and thus far, there is no cure.

Fake News: A brief history

Fake news is defined as “fabricated information that mimics news media content in form but not in organizational process or intent.” Although real news outlets may sometimes print opinion pieces that are more conjecture than fact, or even occasionally erroneously report particular facts amounting to poor reporting, their intent is to report noteworthy information, especially about recent or important events. Fake news, on the other hand, disguises itself as real news in an attempt to “cloak itself in legitimacy and to be easily shareable on social media” without any genuine intent to inform the public or attempt to be truthful.  Rather, it is intended to get clicks (e.g., readers) so as to increase advertisement sales.

Fake news isn’t new.  Its roots can be traced back to at least as early as the sixth century A.D.40 when Procopius, a Byzantine historian, disseminated false information, “known as Anecdota [to] smear the reputation of the Emperor Justinian.” Social media and online advertisement sales, however, have turned it into a seemingly unstoppable beast.

With social media, it is easier than ever to rapidly spread information without verification of the contents or source. Approximately seven-in-ten Americans (of all ages) currently use social media to connect with others and engage with news content, and approximately 43% of adults get their news from Facebook.

With the mere click of a button, a completely fabricated story can be instantly shared with hundreds of people, who in turn can share the story with hundreds more, and so on and so on.  The more click-baitey (i.e., catchy) the title, the quicker the story spreads and the more advertising money the author generates.

Unfortunately, in today’s climate, sensationalism is often more rewarding than the truth.

Legal Avenues are Ineffective to Combat Fake News

Fake news generally takes one of three forms:

  • Type 1-Spoofing: A content provider spoofs a legitimate news source to confuse consumers as to the source of the information (e.g., a fake FORBES Webpage circulating fake articles);

  • Type 2-Poaching: A content provider creates a publication that is intentionally confusingly similar to a recognized news source (e.g., registration of washingtonpost.com.co with a home page that mimics the WASHINTON POST) so as to poach consumers intending to visit a legitimate news source; or

  • Type 3-Original Sensationalism: A content provider creates an original publication under which to provide content, but relies on the sensational nature of the publication to disseminate the content via social media platforms.

Spoofing and poaching, as described above, typically violate several trademark laws.  The creation of a Webpage that spoofs a legitimate news outlet or appears confusingly similar to the news outlet’s brand is likely direct infringement of the news outlet’s trademarks.  Similar arguments could be made under the Lanham Act’s unfair competition and dilution frameworks (if a mark is famous enough to be spoofed, it is likely famous enough to be diluted).  Fair use defenses would also likely be unsuccessful (fair use for parody and satire does not apply where the intent is not to parody or satirize, but rather merely to confuse the relevant public and profit off of the goodwill of the mark).

Website owners, however, can sometimes be difficult to identify (they are often in foreign countries) and new sites can be created faster than infringing sites can be identified and shut down.  News outlets can thus wind up incurring large legal fees to shut down infringing sites in a proverbial game of whack-a-mole with little to no chance of recouping their costs from the bad actors themselves who live to infringe another day.

Several spoofing and poaching Websites owned by Disinformedia, a Web-based fake news content provider, have been shut down (see washingtonpost.com.co, nationalreport.net, and usatoday.com.co) as infringing the trademarks of major news outlets, but fake news is still on the rise.  This is because original sensationalism (type 3 above) is the most common form of fake news and it is nearly impossible to halt through legal action.

Fake news content providers have long relied upon free speech protections.  As long as fake news sources do not pretend to be other news outlets or to confuse readers as to the source of their content (i.e., spoofing and poaching), there is little that the legal system can do to stop the spread of information they may publish, no matter how false.  In very exceptional cases of falsehood, defamation suits may succeed, but these are rarely raised and even harder to prove.

Although legal avenues may not be effective at halting the spread of fake news, trademarks may still ultimately hold the key to stopping the fake news pandemic.

How Fake News is Hurting Facebook’s Brand

Social media platform owners have long held that social networks should not be the arbiters of speech. Mark Zuckerberg, CEO of Facebook, has repeatedly argued that Facebook and similar social media platforms were designed to give everyone a voice and bring them together and that to curtail such speech, no matter how false or offensive, would be to stifle free speech.

This has been a hard line for Mr. Zuckerberg and other social media giants like him.  Even after evidence came to light that foreign powers weaponized fake news to affect the 2016 election, Facebook’s official position on this point did not shift.

However, after months of Facebook failing to remove fake news stories surrounding COVID-19 from its platform, nonprofit groups began to label Facebook an “epicenter of coronavirus misinformation” and advertisers began to boycott the social media platform until it reformed its stance on known fake news stories.

Facebook soon released an official statement that it would finally be taking steps to “connect people to accurate information from health experts and keep harmful misinformation about COVID-19 from spreading”.  During the month of April alone, Facebook placed fake news warning labels on about 50 million pieces of content related to COVID-19 and redirected over “2 billion people to resources from the WHO and other health authorities” via an integrated COVID-19 information box and pop-up warnings notifying users that they had engaged with a fake news article relating to COVID-19.

Facebook’s response to COVID-19 misinformation has proven that it can prevent the spread of fake news without sacrificing its commitment to free speech.  If free speech is no longer an impediment to stopping misinformation, then it is time for Facebook to address the prevalence of fake news on its platform.

Seven-in-ten Americans use Facebook, yet over 60 percent of all Americans now believe the news that they see on social media is fake.  Fake news is ultimately hurting its brand.

As Harvard Business School professor David Yoffie explains, social media platforms such as Facebook have developed goodwill (i.e., trust) in their brands over time.  That goodwill is borrowed by every shared news story, whether real or fake.  When Facebook users see articles generated from an unknown source, they believe the article is factual because it is shared by real people on Facebook and subconsciously or consciously assume that Facebook approves the content.

If the majority of Facebook users now believe that the news they see on social media is fake, then they have lost trust in Facebook itself, thus diluting Facebook’s brand.  As fake news continues to dilute the Facebook brand and associated trademarks, Facebook is at risk of further losing goodwill, users, and, perhaps most importantly to Facebook, advertising dollars.

Few would argue that Facebook has an altruistic interest in the spread of fake news on its platform, but the Facebook brand will continue to be diluted if it does nothing to stop the spread of fake news.  Facebook has taken the first steps to identify and target fake news on its platform brand as it relates to COVID-19, but only time will tell if Facebook will expand these measures to apply to other types of fake news stories.

It took COVID-19 to force Facebook to take steps to protect its trademark (i.e., brand) and confront fake news.  Perhaps it takes a pandemic to face a pandemic.

Copyright 2020 Summa PLLC All Rights Reserved

For more on COVID-19 see the National Law Review Coronavirus News page.

You Streamed What? Copyright Infringement Pitfalls During COVID-19

In the sudden transition from in-person to online presentation of content precipitated by the COVID-19 stay-at-home orders, some educators and other presenters have run headlong into the digital world without a thought to the application of copyright law to their online presentations.  Scrambling to provide content, did some consider the sufficiency of their internet bandwidth and the security of their video-conferencing platform while overlooking copyright infringement issues?  Caution.  Those office webinars, college lectures, music lessons, and club meetings can be fraught with legal pitfalls.

Although we are slowly emerging from our bunkers and cautiously lifting our masks while maintaining social distance, some have predicted that online meetings and classes are here to stay—at least in some form.  Thus, these copyright infringement pitfalls merit consideration.  Granted, any attempt to treat this matter comprehensively in a 1500 word article is a fool’s errand.  And when it comes to these highly fact-specific matters, there’s no substitute for an attorney’s legal advice.  But some basic education on copyright law and some understanding of the distinctions between copyright as applied to education versus other areas might assist those unaccustomed to the online stage from stumbling into a battle over copyright infringement.

What is Protected by Copyright?

A copyright is a collection of rights that protect original works of authorship.  These works can include literary, dramatic, musical and artistic works.  A copyright does not protect facts, ideas, systems or methods of operation, although it may protect the way these things are expressed.  In general, a copyright exists from the moment the work is created and fixed in tangible form.  Registering does not create the copyright; but registering the copyright allows the owner to bring a lawsuit to enforce it and bears on the recovery that a copyright owner can obtain in the lawsuit.  Similarly, under the current law, neither the “©” symbol nor any other marking on an original work of authorship creates the copyright; but the copyright symbol or other marking can put the public on notice that the copyright owner claims his copyright.

What is in the Public Domain?

Works in the “public domain” can be copied.  These fall generally into three categories.

  • Works deliberately dedicated to the public without copyright protection.
  • Works for which the copyright has expired.
  • Works for which the copyright was not renewed.

The changes in the copyright legislation over the course of the past 40 years have made the rules about copyright expiration and renewal somewhat complex.  As of 2020, however, works published before January 1, 1925, entered the public domain.

What About Fair Use?

Most educators and presenters have some familiarity with the “fair use doctrine,” a defense to what is indisputably copying of an original work.  While some librarians have signed the “Public Statement:  Fair Use & Emergency Remote Teaching & Research” in which they boldly state that “making materials available and accessible to students in this time of crisis will almost always be a fair use”, as yet no legislature or court has carved out a “COVID-19” addendum or even a “public health emergency” addendum to the fair use doctrine.  Nevertheless, the fair use doctrine can provide a defense to presenters who exercise a modicum of discretion.

In considering an infringer’s reliance on the fair use doctrine as a defense to copyright infringement, courts consider the use made of the work in light of four factors:

1)   the purpose and character of the use, including whether the use is commercial or is for nonprofit educational purposes;

2)   the nature of the copyrighted work;

3)   the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4)   the effect of the use upon the potential market for or value of the copyrighted work.

Consideration of these factors is highly subjective and fact-sensitive.  The first factor, besides asking whether the use is commercial or educational, looks at the purpose of the use.  Educational as opposed to commercial uses are favored.  But contrary to popular belief, educational use alone will not suffice as a defense to copyright infringement.  Generally, whether the use is commercial or educational, there must be something “transformative” about the use.  In other words, is there something new created?  Does the new work offer a new expression, meaning or message?  Is it serving as raw material for a new expression or insight?  In the education context, is the instructor adding something new such as commentary?  Is he tying the work into his own lesson or is he just using the work to replace his lesson?

While the first factor is often considered the “heart” of the fair use analysis, the other factors matter too.  Consider the second factor.  Is the original work creative or just an arrangement of facts?  Fair use has a broader scope where the original work is factual or informational.  Is it published or unpublished?  Greater latitude is afforded the alleged infringer claiming fair use where the work is published.

But even if the work is published, the third factor considers the portion used—in a quantitative as well as a qualitative sense.  Is the portion used a paragraph or several chapters?  The fair use defense will more likely shield copying a small portion of a work than a large section.  Despite efforts by advocates, courts have refused to specifically quantify how much is too much.  Furthermore, if a copier carves out the most memorable portion of the work, the “heart” of the work, no matter how small, fair use will offer no sanctuary—except in parody.  Where the new work is a parody of the original, the court has recognized that it is the heart of the work at which the parody takes aim.

Finally, how does the copied work impact the potential market for the original? If the copied work undermines the current or potential market for the original work, then this will undermine the use of the fair use doctrine as a defense.

In the education context, Congress has carved out some specific ways in which instructors can circumvent infringement.  House Report No. 94-1476, 94th Cong., 2d Sess. (1976) includes the Agreement on Guidelines for Classroom Copying in Not-For-Profit Educational Institutions (p.6).  Single copying of a chapter from a book or an article from a periodical, a chart or cartoon for use in teaching or preparing to teach, for example is considered fair use under the guidelines.  Multiple copying for the use of pupils in a class is similarly fair use where the copying meets tests of brevity and spontaneity (as defined in the guidelines), meets the cumulative effect test (as defined in the guidelines), and each copy includes a notice of copyright.  But copying cannot be used to replace anthologies or to replace books intended to be “consumable.”  Specific guidelines apply to music.  While there may be instances in which copying does not fall within the protection of the guidelines but nevertheless is permitted under the fair use criteria, compliance with the guidelines offers a safe harbor for educators.

Outside of this safe harbor, presenters employing copied works must navigate the more uncertain waters of fair use and consider other ways to avoid infringement.  But be forewarned that mere acknowledgement of the source material, while perhaps one factor to be considered in a fair use determination, will not absolve a copier for infringement.  Likewise, a disclaimer—effectively a “No Infringement Intended” notice—won’t work.

How Does the TEACH Act Apply in the Online Classroom?

Addressing more specifically the online environment for education, the Technology, Education, and Copyright Harmonization Act of 2002, better known as the TEACH Act, addresses digital teaching materials used in both the classroom and in distance learning settings in 17 USC § 110(2).  This exempts from infringement certain performances and displays of works in an online classroom transmission under certain conditions.

What can be transmitted?

  • Performance of a nondramatic literary or musical work.
  • Performance of reasonable and limited portions of any other work.
  • Display of a work in an amount comparable to what would typically be displayed in the course of a live classroom session.

Under what conditions?

  • The transmission is under the actual supervision of an instructor.
  • The transmission is part of the instructional activities of the institution.
  • The work is related to the teaching content of the transmission.
  • The transmission is made solely for and is limited to the students officially enrolled in the course (as much as is technologically feasible).

What is not authorized?

  • Use of pirated copies.
  • Use of works normally marketed primarily for performance or display as part of online instructional activities.
  • Conversion of print versions of works to digital formats unless there is no digital version available, and even then, conversion is limited to the portions authorized by the size restrictions in the Act.

In order for an instructor to rely on the provisions of the Act, the institution must comply with certain requirements regarding policies and education of faculty and students and application of technological measures to reasonably prevent retention of the works by recipients of the transmission or further dissemination.  Posting class lectures that include copyrighted works on YouTube won’t qualify.

What about showing films?  In the face-to-face environment of a brick and mortar classroom, showing an entire film, video or TV program for educational purposes is allowed (17 U.S.C. § 110(1)), but not when the classroom goes virtual.  Showing portions of a film in an online classroom, may be considered fair use depending on how much of the film is shown and for what purpose.  If fair use does not apply and if the film is not in the public domain, however, students should view the film through a licensed streaming film provider.

What About Licenses and Releases?

Obtaining an author’s permission to use his work obviates the need to engage in the fair use or other analyses described above.  Whether the permission takes the form of a license (permission to use the work) or a release (promise not to sue for unauthorized use), however, many licenses and releases are limited to in-person presentation or distribution and do not extend to online presentation or distribution.  Presenters must carefully consider the scope of permission granted by a license or permission.

In the COVID-19 world, some publishers are offering educators temporary expanded permissions.  The key words here are “educators” and “temporary.”  These permissions do not extend to non-educators, and they are provisional.  Once the days of stay-at-home orders end, educators cannot assume that they can use the same works in the same way online.  In addition, the use of these expanded permissions comes with strings attached.  There are certain requirements that the publishers impose on the user.

Some creators offer their work through Creative Commons licenses.  These give creators standardized ways to grant the public permission to use their work.  Again, however, a user of a work offered under a Creative Commons license should carefully consider the scope of the permission granted.  Not all Creative Commons licenses allow the same types of use.

Obtaining permission to use works may seem daunting, but there are various organizations available online that streamline the process.  The Copyright Alliance offers a list of resources to assist those seeking licenses for works such as literary publications, music, photographs, software and motion pictures.

Conclusion

When it comes to copyright and online meetings, many well-meaning and well-educated people don’t know what they don’t know—until they do.  Unfortunately, that epiphany sometimes comes in the form of a takedown notice or a demand letter.  Thus, presenters would be well advised to evaluate their use of another’s work before posting, streaming, sharing or tweeting.

Copyright 2020 Summa PLLC All Rights Reserved

China’s New Civil Law Adds Right of Publicity

The Third Session of the 13th National People’s Congress (NPC) voted and passed the “Civil Code of the People’s Republic of China” on May 28, 2020. This law will come into effect on January 1, 2021.  Part IV of the law is dedicated to Personality Rights, which include portrait rights, which is similar  California’s right of publicity and right of publicity for the deceased.  Portrait rights in China were previously protected under the General Principles of Civil Law and the new law provides significant clarification on these rights and also codifies existing case law.

Article 990 defines personality rights as “the rights of life, body, health, name, portrait, reputation, honor, privacy and other rights enjoyed by civil subjects.” However, these rights cannot be waived, transferred or inherited per Article 992.  Even though there is no inheritance, a spouse, children and parents can enforce the deceased rights per Article 994.  This codifies existing law from the Supreme People’s Court  case Zhou Haiying v. Shaoxing Yuewang Jewellery and Gold Co., Ltd., which held a close relative was entitled to sue for a violation of Lu Xun’s portrait right after his death.

Article 995 confirms that plaintiffs are entitled to compensation and injunctions for the violation of personality rights.  Article 996 adds that the compensation may include damages for mental anguish. Article 997 adds preliminary injunctions are available when when “a civil subject has evidence to prove that the perpetrator is or is about to commit an illegal act that infringes on his personality rights, and if he fails to stop it in time, his legal rights and interests will be irreparably damaged.”

Article 1018 defines the right of portrait as “…image that can be recognized by a specific natural person reflected on a certain medium through video, sculpture, painting, etc.” and gives natural persons “…the right to make, use, disclose or permit others to use their own portraits in accordance with the law.”

Article 1019 expands on Article 995 by stating “it is forbidden to make, use or publish portraits of portrait right holders without the consent of the portrait right holders, except as otherwise provided by law.” However, exceptions are provided in Article 1020 including personal use, art appreciation, education or scientific research, news, government use with the required scope of their duties, images of public environments where it is inevitable that people will be present, and public interest.

Articles 1021 and 1022 cover portrait right contracts and are favorable to the portrait right owner.  Per Article 1021, if there is a dispute in the meaning of a term, the explanation should favor the portrait right owner.  Article 1022 covers term of the contracts. If no term is specified, either party may cancel at any time but provide reasonable notice. If a term is specified, the portrait right owner can cancel the contract before the end of term as long as reasonable notice is provided.

Article 1023 states the right to name and voice are also covered similarly by this section IV of Personality Rights with respect to portraits.

The new Civil Law may have a favorable impact on famous foreigners looking to protect their rights in China.  For example, Bruce Lee’s heir has recently sued a fast food chain for portrait right infringement and Michael Jordan has several long running disputes with Qiaodan Sports Co., Ltd. (Qioadan is the Chinese pronunciation of Jordan) over use of his name and likeness and recently won a victory on the trademark side.

© 2020 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

To Promote Innovation, Congress Should Lessen Restrictions on Injunctive Relief for Patent Owners

Under the U.S. Constitution, a patent conveys an “exclusive right” to inventors so they can prevent others from stealing their inventions. And since the enactment of the Patent Act of 1790, the law has deemed patents to be a form of personal property and specifically provided for injunctive relief, a court order stopping a proven infringer from continuing to use or sell someone else’s invention. Yet, today in the United States, despite this constitutional mandate and grounding in law, many patent holders no longer have exclusive rights to their inventions, nor the ability to obtain iinjunctions.

For much of our country’s history, permanent injunctions were the norm once patent infringement and validity were proven at trial by the patent owner. And getting an injunction depended on facts, not the patent owner’s business model – for example, whether they manufactured or licensed their invention. The practice was stable for all of that time – until recently.

In 2006, in the Supreme Court’s eBay Inc. v. MercExchange, L.L.C. decision, the Court upended this settled practice, ruling that injunctions should not be automatically issued in patent cases and clarifying that courts must apply a four-part test to determine whether an injunction should be granted. The opinion of the Court, authored by Justice Thomas, said little more than that the four factors should determine when an injunction is allowed. However, two concurring opinions expanded on the role of injunctions in patent cases – one, written by Chief Justice Roberts, defended the historic practice of allowing injunctions in most cases, while the other, by Justice Kennedy, pushed in the opposite direction, basing the injunction determination on who the patent owner was and how they used the patent.

For some years after, the pattern of injunction grants changed little. But eventually, it shifted greatly, as lower courts began to make injunction determinations based primarily on the patent owner’s identity. Those who manufacture products continued to get injunctions, while those who chose to license their patents instead, no longer did. This misapplication of the ruling by lower courts has become so widespread that it is now almost impossible for inventors who license their patents to obtain an injunction, even in the face of proven infringement.

It was almost as if the Kennedy minority concurrence became the majority opinion.  And the Roberts concurrence was mostly ignored by the lower courts – even though that opinion highlighted the settled historical practice of granting injunctions for most cases of infringement.

It may not be entirely coincidental that such an outcome was implored by a massive lobbying and public relations campaign conducted by a group of Big Tech mega corporations, mostly based in Silicon Valley. In an effort to reduce patent licensing fees for using technology created by other inventors in their products, these Big Tech companies set out to demonize the patent licensing business model and undermine the ability of inventors to defend patents against infringement. Among their asks, they specifically urged that injunctions should be largely limited to companies “practicing” their inventions by making products and denied to those following the licensing business model, so-called “non-practicing entities,” or NPEs.

Well, this campaign and its complaints about patent licensing, though lacking in evidence, apparently caught the eye of Justice Kennedy, who wrote in his concurring eBay opinion: “An industry has developed in which firms use patents not as a basis for producing and selling products but, instead, primarily for obtaining licensing fees… For these firms, an injunction, and the potentially serious sanctions from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent.”

This line of reasoning overlooks the fact that the patent licensing business model is not a new phenomenon in the commercialization of patented innovation, but has been around since our country’s founding and has served a key role in advancing U.S. innovation. Iconic American inventors, such as Thomas Edison, Alexander Graham Bell, the Wright Brothers, Charles Goodyear and Elias Howe Jr., all licensed their patented inventions to others, who then manufactured the final product and brought it to the masses. And today, many of our nation’s best innovators license their inventions, including universities, hospitals, startups, engineering firms and independent inventors.

What is most striking is that while the U.S. no longer provides injunctive relief to many patent holders, our competitors in Europe and Asia, including China, routinely grant injunctions in similar cases of patent infringement. This is undermining our competitiveness as innovative companies in the U.S. and around the world have an incentive to conduct R&D and patent inventions outside the U.S., where patent protections are now stronger.

Fortunately, Senator Chris Coons (D-DE) and Representative Steve Stivers (R-OH) are sponsoring bipartisan legislation, known as the STRONGER Patents Act, that would restore the traditional right of injunctions to all patent owners, including those who license their innovations. If we have learned nothing else from the Covid-19 crisis, it is the need to incentivize all the technological advances we can, especially the development of new human health technologies. That incentive system works best when all patent owners can equally and fairly use their constitutional “exclusive right” to their innovations. Let’s hope that insight will help jumpstart the legislative advance of the STRONGER Patents Act or other measures to strengthen patent rights and restore injunctive relief.

The opinions and views stated herein are the sole opinions of the author and do not reflect the views or opinions of the National Law Review or any of its affiliates.

© The National Law Forum. LLC
ARTICLE BY Chief Judge Paul Michel (ret.) US Court of Appeals for the Federal Circuit
For more on patenting inventions, see the National Law Review Intellectual Property law section.

Patentablity of COVID19 Software Inventions: Artificial Intelligence (AI), Data Storage & Blockchain

The  Coronavirus pandemic revved up previously scarce funding for scientific research.  Part one of this series addressed the patentability of COVID-19 related Biotech, Pharma & Personal Protective Equipment (PPE) Inventions and whether inventions related to fighting COVID-19  should be patentable.  Both economists and lawmakers are critical of the exclusivity period granted by patents, especially in the case of vaccines and drugs.  Recently, several members of Congress requested “no exclusivity” for any “COVID-19 vaccine, drug, or other therapeutic.”[i]

In this segment, the unique issues related to the intellectual property rights of Coronavirus related software inventions, specifically, Artificial Intelligence (AI), Data Storage & Blockchain are addressed.

Digital Innovations

Historically, Americans have adhered to personalized healthcare and lacked the incentive to set up a digital infrastructure similar to Taiwan’s which has fared far better in combating the spread of a fast-moving virus.[ii]  But as hospitals continue to operate at maximum capacity and with prolonged social distancing, the software sector is teeming with digital solutions for increasing the virtual supply of healthcare to a wider network of patients,[iii] particularly as HHS scales back HIPAA regulations.[iv]  COVID-19 has also spurred other types of digital innovation, such as using AI to predict the next outbreak and electronic hospital bed management, etc.[v]

One area of particular interest is the use of blockchain and data storage in a COVID/post-COVID world.  Blockchains can serve as secure ledgers for the global supply of medical equipment, including respirators, ventilators, dialysis machines, and oxygen masks.[vi]  The Department of Homeland Security has also deemed blockchain managers in food and agricultural distribution as “critical infrastructure workers”.[vii]

Patentability

Many of these digital inventions will have a hard time with respect to patentability, especially those related to data storage such as blockchains.  In 2014, the Supreme Court found computer-related inventions were “abstract ideas” ineligible for patent protection in Alice v. CLS Bank.[viii]  Because computer-implemented programs execute steps that can theoretically be performed by a human being but are only automated by a machine, the Supreme Court concluded that patenting software would be patenting human activity.  This type of patent protection has long been considered by the Court to be too broad and dangerous.

Confusion

The aftermath of Alice is widespread confusion amongst members of the patent bar as well as the USPTO as to how computer-related software patents were to be treated henceforth.[ix]   The USPTO attempted to clarify some of this confusion by a series of Guidelines in 2019.[x]  Although well-received by the IP community, the USPTO’s Guidelines are not binding outside of the agency, meaning they are have little dispositive effect when parties must bring their cases to the Federal Circuit and other courts.[xi]  Indeed, the Federal Circuit has made clear that they are not bound by the USPTO’s guidance.[xii]  The Supreme Court will not provide further clarification and denied cert on all patent eligibility petitions in January of this year.[xiii]

The Future

Before the coronavirus outbreak, Congress was working on patent reform.[xiv]  But the long-awaited legislation was set aside further still as legislators focused on needed measures to address the pandemic.  On top of that, both Senator Tillis and Senator Coons who have spearheaded the efforts for patent reform are now facing reelection battles, making the future congressional leadership on patent reform uncertain.

Conclusion

Patents receive a lot of flak for being company assets, and like many assets, patents are subject to abuse.[xv]  But patents are necessary for innovation, particularly for small and medium-sized companies by carving out a safe haven in the marketplace from the encroachment of larger companies.[xvi]  American leadership in medical innovations had been declining for some time prior to the pandemic[xvii] due to the cumbersome US regulatory and legal environments, particularly for tech start-ups seeking private funding.[xviii]

Not all data storage systems should receive a patent and no vaccine should receive a patent so broad that it snuffs out public access to alternatives.  The USPTO considers novelty, obviousness and breadth when dispensing patent exclusivity, and they revisit the issue of patent validity downstream with inter partes review.  There are measures in place for ensuring good patents so let that system take its course.  A sweeping prohibition of patents is not the right answer.

The opinions stated herein are the sole opinions of the author and do not reflect the views or opinions of the National Law Review or any of its affiliates

[i] Congressional Progressive Leaders Announce Principles On COVID-19 Drug Pricing for Next Coronavirus Response Package, (2020), https://schakowsky.house.gov/media/press-releases/congressional-progressive-leaders-announce-principles-COVID-19-drug-pricing (last visited May 10, 2020).

[ii] Christina Farr, Why telemedicine has been such a bust so far, CNBC (June 30, 2018), https://www.cnbc.com/2018/06/29/why-telemedicine-is-a-bust.html and Nick Aspinwall, Taiwan Is Exporting Its Coronavirus Successes to the World, Foreign Policy (April 9, 2020), https://foreignpolicy.com/2020/04/09/taiwan-is-exporting-its-coronavirus-successes-to-the-world/.

[iii] Joe Harpaz, 5 Reasons Why Telehealth Is Here To Stay (COVID-19 And Beyond), Forbes (May 4, 2020), https://www.forbes.com/sites/joeharpaz/2020/05/04/5-reasons-why-telehealth-here-to-stay-COVID19/#7c4d941753fb.

[iv] Jessica Davis, OCR Lifts HIPAA Penalties for Telehealth Use During COVID-19, Health IT Security (March 18, 2020), https://healthitsecurity.com/news/ocr-lifts-hipaa-penalties-for-telehealth-use-during-COVID-19.

[v] Charles Alessi, The effect of the COVID-19 epidemic on health and care – is this a portent of the ‘new normal’?, HealthcareITNews (March 31, 2020), https://www.healthcareitnews.com/blog/europe/effect-COVID-19-epidemic-health-and-care-portent-new-normal and COVID-19 and AI: Tracking a Virus, Finding a Treatment, Wall Street Journal (April 17, 2020), https://www.wsj.com/podcasts/wsj-the-future-of-everything/COVID-19-and-ai-tracking-a-virus-finding-a-treatment/f064ac83-c202-40f9-8259-426780b36f2c.

[vi] Sara Castellenos, A Cryptocurrency Technology Finds New Use Tackling Coronavirus, Wall Street Journal (April 23, 2020), https://www.wsj.com/articles/a-cryptocurrency-technology-finds-new-use-tackling-coronavirus-11587675966?mod=article_inline.

[vii] Christopher C. Krebs, MEMORANDUM ON IDENTIFICATION OF ESSENTIAL CRITICAL INFRASTRUCTURE WORKERS DURING COVID-19 RESPONSE, Cybersecurity and Infrastructure Security Agency (March 19, 2020), available at https://www.cisa.gov/sites/default/files/publications/CISA-Guidance-on-Essential-Critical-Infrastructure-Workers-1-20-508c.pdf.

[viii] Alice v. CLS Bank, 573 U.S. 208 (2014), available at https://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf.

[ix] David O. Taylor, Confusing Patent Eligibility, 84 Tenn. L. Rev. 157 (2016), available at https://scholar.smu.edu/cgi/viewcontent.cgi?article=1221&context=law_faculty.

[x] 2019 Revised Patent Subject Matter Eligibility Guidance, United States Patent Office (January 7, 2019), available at https://www.federalregister.gov/documents/2019/01/07/2018-28282/2019-revised-patent-subject-matter-eligibility-guidance.

[xi] Steve Brachmann, Latest CAFC Ruling in Cleveland Clinic Case Confirms That USPTO’s 101 Guidance Holds Little Weight, IPWatchDog (April 7, 2019), https://www.ipwatchdog.com/2019/04/07/latest-cafc-ruling-cleveland-clinic-confirms-uspto-101-guidance-holds-little-weight/id=107998/.

[xii] Id.

[xiii] U.S. Supreme Court Denies Pending Patent Eligibility Petitions, Holland and Knight LLP (January 14, 2020), https://www.jdsupra.com/legalnews/u-s-supreme-court-denies-pending-patent-55501/.

[xiv] Tillis and Coons: What We Learned At Patent Reform Hearings, (June 24, 2019), available at https://www.tillis.senate.gov/2019/6/tillis-and-coons-what-we-learned-at-patent-reform-hearings.

[xv] Gene Quinn, Twisting Facts to Capitalize on COVID-19 Tragedy: Fortress v. bioMerieux, IPWatchDog (March 18, 2020), https://www.ipwatchdog.com/2020/03/18/twisting-facts-capitalize-COVID-19-tragedy-fortress-v-biomerieux/id=119941/.

[xvi] Paul R. Michel, To prepare for the next pandemic, Congress should restore patent protections for diagnostic tests, Roll Call (April 28, 2020), https://www.rollcall.com/2020/04/28/to-prepare-for-the-next-pandemic-congress-should-restore-patent-protections-for-diagnostic-tests/.

[xvii] Medical Technology Innovation Scorecard_The race for global leadership, PwC (January 2011), https://www.pwc.com/il/en/pharmaceuticals/assets/innovation-scorecard.pdf.

[xviii] Elizabeth Snell, How Health Privacy Regulations Hinder Telehealth Adoption, HealthITSecurity (May 5, 2015),https://healthitsecurity.com/news/how-health-privacy-regulations-hinder-telehealth-adoption.

Copyright (C) GLOBAL IP Counselors, LLP

ARTICLE BY Wen Xie at Global IP Counselors.
For more on patentability, see the National Law Review Intellectual Property law section.

The United States Patent and Trademark Office Remains Operational and Flexible During the COVID-19 Pandemic

In view of the COVID-19 pandemic, the United States Patent and Trademark Office (USPTO) recently announced that its offices will be closed to the public “until further notice.”[1] However, the USPTO also assured the public that USPTO “operations will continue without interruption.”[2] Accordingly, applicants can continue to file related documents with the USPTO (e.g., patent applications, trademark applications, and responses to USPTO communications). Applicants can also hold interviews and oral hearings with the USPTO by video or telephone.[3]

Additionally, the USPTO has provided numerous accommodations for applicants that have been affected by the COVID-19 pandemic. As explained in more detail below, such accommodations for affected applicants include:

(I) a 30-day extension of certain patent-related and trademark-related filing deadlines that fall between March 27 and April 30;

(II) waiver of revival fees for (a) abandoned patent applications, (b) terminated or limited re-examination proceedings, (c) abandoned trademark applications, and (d) cancelled/expired trademark registrations; and

(III) waiver of original handwritten signature requirements for (a) registration to practice before the USPTO in patent cases, (b) enrollment and disciplinary investigations, (c) disciplinary proceedings, and (d) non-electronic payments by credit card.[4]

I.  USPTO extends certain filing deadlines for those affected by COVID-19

The USPTO has exercised temporary authority provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide a 30-day extension of various patent-related and trademark-related deadlines that fall between March 27 and April 30 for applicants affected by the COVID-19 pandemic.[5] Table 1 summarizes the patent-related and trademark-related deadlines that can be extended under USPTO’s temporary authority.

Extendible patent-related deadlines Extendible trademark-related deadlines
Reply to a USPTO notice issued during pre-examination proceedings by a small or micro entity[6] Response to an Office action, including a notice of appeal from a final refusal
Reply to a USPTO notice or action issued during examination[7] Statement of use or request for extension of time to file a statement of use
Reply to a USPTO notice or action issued during patent publication processing[8] Notice of opposition or request for extension of time to file a notice of opposition
Issue fee payment Priority filing basis
Numerous deadlines related to proceedings before the Patent Trial and Appeal Board (PTAB)[9] Transformation of an extension of protection to the United States into a U.S. application
Maintenance fee payment filed by a small or micro entity Affidavits of use or excusable nonuse
  Renewal application

Table 1.  Summary of patent-related and trademark-related deadlines that can be extended for 30 days for applicants affected by COVID-19.  The deadlines must fall between March 27 and April 30.

In order to obtain an extension of time for an applicable deadline, applicants must request the extension along with a statement that the delay was “due to the COVID-19 outbreak.”[10] Fortunately, the USPTO has broadly identified such COVID-19-related delays to include instances where “a practitioner, applicant, patent owner, petitioner, third party requester, inventor, or other person associated with the filing or fee was personally affected by the COVID-19 outbreak” through various occurrences, such as “office closures, cash flow interruptions, inaccessibility of files or other materials, travel delays, personal or family illness, or similar circumstances.”[11]

Unfortunately, extensions of time are not available for all deadlines affected by the COVID-19 pandemic.  For instance, original filing deadlines, PCT or national-stage filing deadlines, deadlines to file a non-provisional patent application claiming domestic benefit from a provisional patent application, and deadlines to file an inter-partes review petition are not covered.

II. USPTO waives revival fees for matters abandoned or affected due to COVID-19

The USPTO has also agreed to waive revival fees for the revival of matters that were abandoned or affected as a result of applicant’s inability to reply to a USPTO communication due to the COVID-19 pandemic.[12] Such abandoned or affected matters include: (1) abandoned patent applications, (2) terminated or limited re-examination proceedings, (3) abandoned trademark applications, and (4) cancelled/expired trademark registrations.[13] Table 2 provides a summary of the requirements and deadlines for requesting a waiver of revival fees for matters abandoned or affected due to COVID-19.

Matter abandoned or affected due to COVID-19

  Patent applications and re-examination proceedings Trademark applications and registrations
Requirements to waive revival fees
  • Reply to the outstanding Office communication
  • A petition to revive
  • A request for waiver of the petition fee
  • A statement that the delay in filing the reply required to the outstanding Office communication was because the practitioner, applicant, or at least one inventor was personally affected by the COVID-19 outbreak such that they were unable to file a timely reply
  • A petition to revive
    A statement explaining how the failure to respond to the Office communication was due to the effects of the COVID-19 outbreak
Deadline for requesting the waiver of revival fees
  • Two months from the issue date of the notice of abandonment of patent application or notice of termination or limitation of re-examination (“Notice”)
  • Six months from the date of patent application abandonment or termination/limitation of re-examination if the applicant did not receive the Notice.
  • Two months from issue date of the notice of abandonment or cancellation (“Notice”)
  • Six months after the date of abandonment, cancellation or expiration if the applicant did not receive the Notice

Table 2.  Requirements and deadlines for requesting a waiver of revival fees for matters abandoned or affected due to COVID-19.

III. USPTO waives original handwritten signature requirements until further notice

In view of the COVID-19 outbreak, the USPTO is also waiving the requirements for original handwritten signatures until further notice.[14] Accordingly, original handwritten signatures will not be required for the following documents that previously required them: (1) registration to practice before the USPTO in patent cases; (2) enrollment and disciplinary investigations; (3) disciplinary proceedings; and (4) payments by credit cards where the payments are not being made via the USPTO’s electronic filing systems.[15]

IV.  Conclusion

Even though the USPTO is currently closed to the public, the USPTO remains operational.  Furthermore, the CARES Act provides the Director of the USPTO with broad discretionary authority to “toll, waive, adjust, or modify, any timing deadline” established by patent or trademark statute or regulation.  The numerous accommodations already provided by the USPTO should provide applicants that have been affected by the COVID-19 pandemic with flexibility. However, applicants should appreciate that, since the COVID-19 outbreak is a fluid situation, additional changes to the USPTO’s operations and/or further accommodations could be forthcoming.

[1] https://www.uspto.gov/coronavirus

[2] Id.

[3] Id.

[4] Id.

[5] March 31, 2020 USPTO press release entitled “USPTO announces extension of certain patent and trademark-related timing deadlines under the Coronavirus Aid, Relief, and Economic Security Act”.

[6] Such extensions can include a Notice of Omitted Items, Notice to File Corrected Application Papers, Notice of Incomplete Application, Notice to Comply with Nucleotide Sequence Requirements, Notice to File Missing Parts of Application, and Notification of Missing Requirements.

[7] Such extensions can include a final or non-final Office Action and a Notice of Non-Compliant Amendment.

[8] Such extensions can include a Notice to File Corrected Application Papers issued by the Office of Data Management.

[9] Such extensions are: (a) the filing of a Notice of Appeal; (b) the filing of an Appeal Brief; (c) the filing of a Reply Brief; (d) payment of the appeal forwarding fee; (e) request for an oral hearing before the PTAB; (f) response to a substitute examiner’s answer; (g) amendment when reopening prosecution in response to, or request for rehearing of, a PTAB decision designated as including a new ground of rejection; (h) request for a rehearing of a PTAB decision; (i) request for rehearing of a PTAB decision; (j) a petition to the Chief Judge; and (k) a patent owner preliminary response in a trial proceeding, or any related responsive filings.

[10] See USPTO Patent and Trademark notices provided in the March 31, 2020 USPTO press release.

[11] Id.

[12] USPTO’s March 16, 2020 Notice entitled “Relief to Patent and Trademark Applicants, Patentees and Trademark Owners Affected by the Coronavirus Outbreak.”

[13] Id.

[14] FR 17502, Vol. 85, No. 61. March 30, 2020.

[15] Id.

© 2020 Winstead PC.

For more on USPTO operations, see the National Law Review Intellectual Property law section.

Patentability of COVID-19 Biotech, Pharma & Personal Protective Equipment Inventions

The innovative workforce has been redirected.  Spurred by the  Coronavirus pandemic, scientific research that once floundered from a lack of funding has been rejuvenated.[i]  The current innovation upsurge is not out of sheer interest for promoting the useful arts, however, but out of necessity.  Around the world, inventors are developing ways to cope with the new world engendered by COVID-19, from treatments for fighting disease to methods of predicting the next outbreak.

Alongside the proliferation of inventions and discoveries is the issue of financial rewards for these innovations.  Should inventions related to fighting COVID-19 be patentable? Many economists and lawmakers are critical of the exclusivity period granted by patents, especially in the case of vaccines and drugs.  Recently, several members of Congress requested “no exclusivity” for any “COVID-19 vaccine, drug, or other therapeutic.”[ii]

This article examines the patentability of developments in the Biotechnology, Pharmaceutical, and Personal Protective Equipment (PPE)  technology sectors related to COVID-19 and looks into the merits of patent criticism.   Part two of this series examines the Patentability of  COVID-19 Software Inventions – Artificial Intelligence (AI), Data Storage & Blockchain.

The Patentability of Inventions Related to COVID-19 – Biotechnology and Pharmaceutical Inventions

No doubt the most vociferous anti-patent sentiment is directed at the idea of patenting vaccines and treatments which enable companies to price their products well above the marginal cost of production.  Remdesivir, which was recently approved by the FDA for emergency COVID treatment, has a projected cost ranging from $390 to $4,460 per treatment course depending on the mortality benefit.[iii]  But an outright prohibition of patent protection for these inventions is an over-correction of these understandable concerns.  Patent protection has already been eroded over the last ten years and further erosion could lead to a decline in US leadership in the healthcare sector over time[iv]

Disclosure of Ideas

One of the basic principles of having patents is that a period of exclusivity is granted in return for inventors disclosing their inventions to the public, thereby probing further downstream studies and research into the disclosed art. Proponents of patent pools and “open science” argue that the free exchange of ideas will occur without the disclosure requirement that accompanies patent application, pointing to systems like the WHO’s Global Influenza Surveillance and Response System (GISRS).  Under GISRS, experts around the world collaborate to develop each year’s flu vaccine.[v]  GISRS is cited as proof that a patent-less system does not prohibit the disclosure of ideas and findings.[vi]

This type of open science system is not realistic for private companies, however.  GISRS is composed of national collaborating centers that collect data from participating public entities such as federal agencies and state public health laboratories.[vii]  The participants of GISRS have very little commercial stake when it comes to the disclosure of research findings.  A similar system cannot be expected to work in the realm of private enterprise especially in the long term.

Incentive to Innovate

Inventions related to the biotechnology and pharmaceutical spheres are already extremely difficult to patent as it is due to Mayo v. Prometheus Laboratories.[viii]  The Supreme Court found that a therapeutic treatment for a gastrointestinal disorder was not patentable whatsoever, believing that the diagnostics involved in the treatment was similar to patenting a “law of nature.”  The aftermath of Mayo was a significant increase in rejections against patent applications related to biotechnology and pharmaceuticals on the grounds of them being non-patentable subject matter.[ix]  The ongoing cost of prosecution in the face of these rejections was especially damaging to small and medium-sized companies that lack the financial means to repeatedly contend with the USPTO.[x]

Importantly, Mayo is a case related to diagnostics.  Therefore, inventions directed to diagnostics are even more difficult to patent.  It is no secret that the US has struggled when it comes to providing widespread and accurate COVID testing.  Judge Michel of the Federal Circuit believes that Mayo contributed to the country’s unpreparedness for the crisis by eliminating “incentives for private companies to develop diagnostic tests”.[xi]  There are many reasons for the failure of the test rollouts, but the US would have been better positioned to fight the pandemic had the proper innovative incentives been in place for the companies that we now rely on.

Recouping Cost

Currently, Gilead has not yet set a price for remdesivir but will be donating its initial supply of 1.5 million doses.[xii]  Ultimately, they will set a price that will most likely be above the marginal cost of $10 to produce a 10-day course of treatment per patient.  Remdesivir was in the process of R&D for over ten years.  Originally developed for SARS and MERS, the commercial price of remdesivir will not be commensurate with the cost of manufacturing but rather the overall investment towards developing the drug over time.[xiii]  The company also recently announced in a SEC filing that they could invest up to “$1 billion or more” in remdesivir in 2020.[xiv]  Pricing remdesivir marginally above cost will result in a substantial net loss for Gilead that will hurt the company’s incentive to develop further treatments.  This is an unwelcomed fact but ignoring it would be wrong and dangerous.

The Patentability of Inventions Related to COVID-19 – PPE 

Patents are not to blame for the shortage of PPE – Personal Protective Equipment and respirators.  PPE and respirators are primarily manufactured abroad and due to the current disproportionate balance between supply and demand, they are scarce commodities.  But for some reason, the Governor of Kentucky wants 3M to license its patents on the N95 mask so that “everybody else can manufacture it.”[xv]  Even Nobel laureates suggest that 3M’s patents over the N95 mask “have made it more difficult for new producers to manufacture medical-grade face masks at scale.”[xvi]

3M does not have a monopoly over the N95 mask.  No one does.  Honeywell, Kimberly-Clark Corporation, Moldex-Metric, GlaxoSmithCline are just a few companies among many that are listed by the CDC that make and manufacture NIOSH-approved N95 respirators.[xvii]

The Coalition for Breathing Safety forewarned the shortage of respirators in 2006.  Manufacturers of the N95 mask were forced to move offshore due to the cost of defending product liability suits over the tightly regulated masks.[xviii]  Again, patents are not to blame for the shortage and do not stand in the way of manufacturers other than 3M from making these products.

See the next segment: Artificial Intelligence (AI), Data Storage & Blockchain –  the patentability of COVID19 Software Inventions.

The opinions stated herein are the sole opinions of the author and do not reflect the views or opinions of the National Law Review or any of its affiliates.

[i] Robert Langreth and Susan Berfield, Famed AIDS Researcher Is Racing to Find a Coronavirus Treatment, Bloomberg Businessweek (March 20, 2020), https://www.bloomberg.com/news/features/2020-03-19/this-famous-aids-researcher-wants-to-find-a-coronavirus-cure.

[ii] Congressional Progressive Leaders Announce Principles On COVID-19 Drug Pricing for Next Coronavirus Response Package, (2020), https://schakowsky.house.gov/media/press-releases/congressional-progressive-leaders-announce-principles-COVID-19-drug-pricing (last visited May 10, 2020).

[iii] Melanie D. Whittington, PhD and Jonathan D. Campbell, PhD, Alternative Pricing Models for Remdesivir and Other Potential Treatments for COVID-19, Institute for Clinical and Economic Review (May 1, 2020), https://icer-review.org/wp-content/uploads/2020/05/ICER-COVID_Initial_Abstract_05012020-3.pdf.

[iv] Paul R. Michel, To prepare for the next pandemic, Congress should restore patent protections for diagnostic tests, Roll Call (April 28, 2020), https://www.rollcall.com/2020/04/28/to-prepare-for-the-next-pandemic-congress-should-restore-patent-protections-for-diagnostic-tests/.

[v] Joseph E. Stiglitz, Should patents come before patients? How drug monopolies hamper the fight against coronavirus, Project Syndicate (April 23, 2020), https://www.marketwatch.com/story/should-patents-come-before-patients-how-drug-monopolies-hamper-the-fight-against-coronavirus-2020-04-23?mod=article_inline

[vi] Id.

[vii]  U.S. Influenza Surveillance System: Purpose and Methods, Center for Disease Control, available at https://www.cdc.gov/flu/weekly/overview.htm (last accessed May 10, 2020).

[viii] Mayo v. Prometheus, 566 U.S. 66 (2012), available at https://www.supremecourt.gov/opinions/11pdf/10-1150.pdf.

[ix] Mateo Aboy, Mayo’s impact on patent applications related to biotechnology, diagnostics and personalized medicine, Nature Biotechnology (May 3, 2019), https://www.nature.com/articles/s41587-019-0111-5.

[x] Id.

[xi] Paul R. Michel, To prepare for the next pandemic, Congress should restore patent protections for diagnostic tests, Roll Call (April 28, 2020), https://www.rollcall.com/2020/04/28/to-prepare-for-the-next-pandemic-congress-should-restore-patent-protections-for-diagnostic-tests/.

[xii] Sydney Lupkin, Putting A Price On COVID-19 Treatment Remdesivir, NPR (May 8, 2020), https://www.npr.org/sections/health-shots/2020/05/08/851632704/putting-a-price-on-COVID-19-treatment-remdesivir.

[xiii] John F. Cogan, Remdesivir Affirms the American Way, Wall Street Journal (May 1, 2020), https://www.wsj.com/articles/remdesivir-affirms-the-american-way-11588368750.

[xiv] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, Gilead Sciences Inc., available at http://investors.gilead.com/node/36926/html (last visited May 10, 2020).

[xv] The Netherlands Joins COVID-19 IP Pool Initiative; Kentucky Governor Requests 3M Release N95 Patent, Health Policy Watch (April 8, 2020), https://healthpolicy-watch.org/the-netherlands-joins-COVID-19-ip-pool-initiative-kentucky-governor-requests-3m-release-n95-patent/?mod=article_inline.

[xvi] Joseph E. Stiglitz, Should patents come before patients? How drug monopolies hamper the fight against coronavirus, Project Syndicate (April 23, 2020), https://www.marketwatch.com/story/should-patents-come-before-patients-how-drug-monopolies-hamper-the-fight-against-coronavirus-2020-04-23?mod=article_inline.

[xvii] NIOSH-Approved N95 Particulate Filtering Facepiece Respirators, Center for Disease Control, available at https://www.cdc.gov/niosh/npptl/topics/respirators/disp_part/N95list1-a.html (last accessed May 10, 2020).

[xviii]  Sandy Smith, Six Respirator Manufacturers Warn President of Shortage of Masks, EHSToday (June 22, 2006), https://www.ehstoday.com/emergency-management/article/21912885/six-respirator-manufacturers-warn-president-of-shortage-of-masks.

Copyright (C) GLOBAL IP Counselors, LLP

ARTICLE BY Wen Xie at Global IP Counselors.
For more on COVID-19 protective equipment, see the National Law Review Coronavirus News section.

New Platform to Facilitate Development of COVID-19 Technologies

The United States Patent and Trademark Office (USPTO) has launched a new platform that could expedite the development of COVID-19 related technologies. As explained in the USPTO’s press release, the Patents 4 Partnerships web-based marketplace is designed to “facilitate the voluntary licensing and commercialization of innovations in a variety of key technologies” related to “the prevention, treatment, and diagnosis of COVID-19.”

The Patents 4 Partnerships IP marketplace platform currently lists 175 granted U.S. patents and pending U.S. patent applications, covering such diverse technologies as “Methods of Treating Coronavirus Infection,” “Air-Sampling Device and Method of Use,” “Rapid and Highly Fieldable Viral Diagnostic,” and “Dexterous Humanoid Robotic Wrist.” According to the press release, the initially listed items were “drawn from a variety of public sources, including the USPTO, the Federal Laboratory Consortium for Technology Transfer (FLC Business), the AUTM Innovation Marketplace (AIM), universities, and a number of federal agencies.”

Stakeholders wanting to add their U.S. patents or applications to the Patents 4 Partnerships platform can complete this simple form. As noted on the form, the technology should be “reasonably related to the prevention, treatment, diagnosis, protection from or alleviation of symptoms of coronaviruses in general.”

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For more in COVID-19 tech-development, see the National Law Review Coronavirus News section.