TIPLJ: Volume 30

Issue 1: Fall 2021

Why Patent Monopsonies Increase Consumer Welfare

Citation: 30 Tex. Intell. Prop. L.J. 1 (2021)

Author: Bernard Chao & Tod Duncan

About: Bernard Chao is a Professor of the University of Denver Law School. Tod Duncan Ph.D. is an Associate Clinical Professor in the Department of Integrative Biology at the University of Colorado Denver, JD expected Dec. 2021.

Abstract:

Technical standards are an essential part of how the modern world operates. Standards enable different devices to communicate with each other, use the same power supply, and even exchange data. These standards are created by groups of companies coming together through standard settings organizations (SSOs). Besides defining standards, SSOs set policies that affect how much member companies charge for their standard essential patents (SEPs). Unsurprisingly, many companies desire lower patent prices. But as SSOs adopt policies that lower prices, their conduct begins to look like collusion subject to antitrust scrutiny. Indeed, classic economic theory suggests that when a monopsonist (or multiple oligopsonists) lowers prices, it also lowers output and creates deadweight loss. Presumably, that is why the antitrust authorities in the Trump administration have adopted policies that caution SSOs against these practices.

This paper argues that these policies result from a misunderstanding of economic theory. The monopsony problem is typically discussed in the context of private goods, goods which are both excludable and rivalrous. While patent licenses are excludable (i.e., a licensor can refuse to grant the license), they are not rivalrous because the grant of one license does not prevent the simultaneous grant of licenses to other companies. This combination of traits means that patent licenses are not private goods, but a type of “artificially scarce goods.” As this paper explains, the economics of artificially scarce goods are fundamentally different than the economics of private goods. When a monopsonist buying artificially scare goods lowers prices, it increases output and reduces deadweight loss. Thus, the core rationale for prosecuting monopsonies under antitrust law, increasing allocative efficiency, does not apply to patent monopsonies like SSOs.

The Trump administration also tried to justify the use of antitrust law to strengthen patents rights and increase innovation incentives. While antitrust law certainly has a role in guarding against conduct that suppresses innovation, antitrust law was never meant to create innovation incentives themselves. That is the role of patents. More particularly, patent law calibrates incentives to properly encourage innovation without unduly discouraging subsequent follow-on innovation. Unless there are reasons to believe that patent monopsonies are harming innovation, antitrust law should not interfere with the balance patent law seeks to strike. When SSOs implement a policy that lower rates to reflect the contribution an SEP makes to the standard, the policy is simply reinforcing a patent law principle called “apportionment.” Thus, antitrust law should not oppose such a policy.

Rogue One: Section 285 Attorney’s Fees in Doctrinal Patent Ineligibility Cases

Citation: 30 Tex. Intell. Prop. L.J. 23 (2021)

Author: Kristy J. Downing

About: Kristy J. Downing is a U.S. patent attorney and author of the Just Intellectuals eNewsletter, https://kristyjdowning.wixsite.com/enewsletter

J.D. 2003, University of Michigan Law School; B.S. 2000, University of Michigan.  As Always, I invite you to read, discuss and enjoy!

Abstract:

Recently, a US Court of Appeals panel found that enforcing an issued patent that could potentially be found ineligible under Section 101’s doctrinal exclusions might constitute an “exceptional” circumstance, warranting attorney’s fees under 35 U.S.C. § 285: Inventor Holdings v. Bed Bath & Beyond. In patent law, there is a diversion from the American Rule on fees, that each party be responsible for their own fees; instead, prevailing parties may be entitled to fees where the case is exceptional. Under the totality-of-the-circumstances test of Octane Fitness, merely enforcing patents in the face of unestablished invalidity challenges from the accused is rarely considered exceptional and in these cases fees are awarded when the arguments are objectively baseless. However, with all the discord in the industry about the unpredictable, unobjective application of the doctrinal exclusions to § 101, it is arguably immoderate for courts to find that an otherwise innocent pursuit of infringement damages constitutes exceptional conduct. This article compares and contrasts fee awards for truly objectively baseless invalidity or noninfringement grounds with recent 101-invalidity fee awardsand establishes just how rogue fee awards are in most ineligibility cases.

Coronavirus, Compulsory Licensing, And Collaboration: Analyzing The 2020 Global Vaccine Response With 20/20 Hindsight

Citation: 30 Tex. Intell. Prop. L.J. 75 (2021)

Author: Arjun Padmanabhan

About: Arjun Padmanabhan is a JD Candidate at the Texas A&M University School of Law, JD expected May 2022.

Abstract:

In December 2019, COVID-19, a novel strain of the SARS-2 Virus, appeared in Wuhan, China. Within a year, over ninety million people had been infected, and two million had died. Amid all the death and desolation, humanity’s ingenuity and willpower emerged in history’s greatest vaccine race. The global community sought to find novel ways to protect innovation and intellectual property while still collaborating to roll out a vaccine in record time. Despite the presence of compulsory licensing provisions like 28 U.S.C. § 1498 and the Bayh-Dole Act in the U.S., and the TRIPS Agreement at the international level, the journey has been difficult. Thousands died while international players protected proprietary information and ensured that their countries’ citizens are first in line for the vaccine. Although dubbed a “once in a lifetime pandemic,” the COVID-19 outbreak provides a unique opportunity to contemplate ways to unify the world through intellectual property during a time of crisis, as well as a grim portent of what will become the new norm if we do not.

This Article examines the impact and effectiveness of intellectual property licensing provisions worldwide to suggest improvements that might result in a quicker and more efficient response to future global health crises. By examining and learning from the plagues of the present, we might preserve the health of our future.

Citation: 29 Tex. Intell. Prop. L.J. 121 (2021)

Author: Emma Perot

About: Emma Perot is a Lecturer in Law at the University of the West Indies, St. Augustine.

Abstract:

Once considered a taboo form of expression, tattoos have become increasingly popular and accepted in modern American society. This article explores the use of paparazzi photographs by celebrities. This issue is within the realm of copyright infringement but also engages the right of publicity as celebrities are using photographs of themselves on social media. The potential for preemption results in the right of publicity being a secondary consideration. Nonetheless, analyzing copyright against the right of publicity reveals that the relationship between the paparazzi and the celebrities is symbiotic. This article analyses whether the interests of these parties can be reconciled by existing copyright concepts such as fair use, implied license, and joint authorship. A distinction is made between candid, posed, and staged photographs to argue that implied license is the most viable defense, but would be limited to staged photographs due to the collaboration between the celebrity and the paparazzo. Three of the four use factors weigh in favor of the paparazzi, and joint authorship is likely to be rejected due to policy implications. The potential of a personal use exception and compulsory license are considered, but ultimately, allowing market forces to regulate is the most viable approach. This article concludes that the interests cannot be reconciled, but the paparazzi strengthen the right of publicity of the celebrities by increasing identifiability, which in turn supports claims against evocative uses of persona.

Issue 2: Spring 2022

The Problem of Design Patents: Representation and Subject Matter Scope

Citation: 30 Tex. Intell. Prop. L.J. 185 (2022)

Author: Amy L. Landers

About: Amy L. Landers is a Professor of Law and the Director of the Intellectual Property Concentration at the Drexel University Thomas R. Kline School of Law.

Abstract:

The design patent system has become incoherent. The system was created in a time when design meant “put[ting] a beautiful wrapper around the idea.” The legal system for design protection has become lost in the past. The system should be updated to capture design’s creative power as it is exercised in this century. A fundamental shift in design thinking has moved toward solving problems, including those that are aesthetic.

One consistent theme of the current criticisms is the system’s inability to affirmatively articulate a cohesive underlying theory governing its subject matter. Recently, one proposal suggests that this could emerge from an analysis of the changes in the design field over the past century. This Article fills that gap. In addition, various proposals are offered that flow from that work to address other troubling concerns. These leverage the strengths of the patent system, including the law’s ability to require ex ante disclosure.

Further, this Article explores the semiotics of design patent images, which have an unappreciated impact on their substantive power. Design patents generally use reductive, static figures that show the design’s structural outlines, emphasizing line and edge. Text is minimized. The system’s default rules allow claims that are represented in their broadest forms and supported with minimal information. This is contrary to the treatment of utility patents, which are purported to be governed by the same rules. Perhaps most troubling, these sparse disclosures have likely impacted the legal system’s collective understanding of the possible definitions of design. Although designers have expanded their work to create multisensory experiences, design law has not evolved to consider such aspects as available for protection.

Laws should evolve to serve their primary statutory purpose. By expanding the available formats and appearance of submissions for design patent applications to the United States Patent & Trademark Office (“PTO”), the system can begin a decision-making process that considers the potential range of protection that considers both visual and multisensory forms of design.

Standard Essential Patents Versus the World: How the Internet of Things Will Change Patent Licensing Forever

Citation: 30 Tex. Intell. Prop. L.J. 259 (2022)

Author: Christopher S. Storm

About: Christopher S. Storm is a Legal Director at Uber Technologies, Inc. He received his M.S. in Technology Commercialization from the University of Texas at Austin; his J.D. from the University of Houston Law Center; and his B.S. in Aerospace Engineering from the University of Texas at Austin.

Abstract:

Our connected world depends on proper licensing of standard-essential patents (SEPs). Decades of intra-industry SEP disputes have shaped how modern courts resolve SEP licensing issues. Emerging cross-industry SEP disputes, however, present new reasons to question the assumptions made by courts and scholars during the era of intra-industry SEP disputes. This Article examines cross-industry SEP disputes between telecommunications companies and Internet of Things (IoT) implementers to demonstrate how SEP owners use the “exhaustion-avoidance licensing model” to capture more value than they are entitled to receive under U.S. patent damages law. This IoT fact pattern will force U.S. courts to choose one of two paths. Courts could choose to protect established licensing practices by deemphasizing the apportionment rule; this path, however, would erode a bedrock legal doctrine responsible for keeping patent damages tethered to reality. Instead, this Article recommends rigorously enforcing the patent apportionment and misuse doctrines in SEP disputes, even if such enforcement disrupts established SEP licensing practices. No matter which path courts choose, patent licensing will never be the same.

Real Parties in Interest: The Problem with RPIs in IPRs

Citation: 30 Tex. Intell. Prop. L.J. 315 (2022)

Author: Jordan Garsson

About: Jordan Garsson received her J.D. from the University of Texas School of Law in May 2022. She contributed this article to the Journal while serving as its Executive Articles Editor.

Abstract:

Petitioners and patentees currently play a game of cat-and-mouse at the United States Patent and Trademark Office—through the process of obtaining an inter partes review (“IPR”). While petitioners rush to invalidate patents through efficient IPR proceedings, patentees work to get the petition denied on the basis of failing to name a real party in interest (“RPI”). Despite the notably low threshold for obtaining an IPR, the AIA implemented two distinct limitations: a one-year time bar applied to all parties and the requirement to name all RPIs. The limitations go hand-in-hand since the time bar applies not only to petitioners but also to any RPI. Further, any estoppel effects apply to all named parties, including RPIs. As such, strict harms arise from naming—or failure to name—an RPI in a petition for IPR. Consequently, with increasing frequency, petitioners “hide” the RPIs through practices such as third-party petitioning.

Although petitioners originally hid RPIs to protect themselves from a total denial of an IPR and the associated repercussions of such a denial, petitioners now leverage the practice to get a “second bite at the apple” of litigation. Thus, petitioners and patentees experience a harm-shifting effect during the petition for an IPR proceeding. While the Federal Circuit has issued decisions to lessen this problem, the decisions have not amounted to an actual remedy for the harm faced by either side in the IPR proceeding. This paper analyzes the current standard for including RPIs in IPR petitions and advocates for a new, functionalist approach in contrast to the formalist approaches adopted by PTAB and Federal Circuit today.