Issue 1: Summer 2023
Arising Under: A Review of Notable Jurisdictional Disputes of the Federal Circuit
Elizabeth C. Elrod
When Freedom of Speech Becomes Unfair Competition: Vidal v. Elster and the Need to Protect § 1052(c)
Kent A. Pederson
A Detailed Study of Court Decisions on Admissibility of Intellectual Property Damages Experts
Deepa Sundararaman & Cleve B. Tyler
Issue 2: January 2024
Why Pharmaceutical Patent Thickets Are Unique
Michael A. Carrier & S. Sean Tu
Destruction, Proportionality, and Sustainability: A Law-and-Economics Analysis
Thomas F. Cotter & Chung-Lun Shen
Utility, Copyright, and Fair Use after Warhol
Keith N. Hylton
(Dis)trust in the Process: U.S. Foreign Policy as an Obstacle to an Efficient International Intellectual Property Regime
Gillian R. Schutt
Issue 3: June 2024 (forthcoming)
Summer 2023
Arising Under: A Review of Notable Jurisdictional Disputes of the Federal Circuit
Citation: 32 Tex. Intell. Prop. L.J. 1 (2023)
Author: Elizabeth C. Elrod
About: Elizabeth Elrod is a student at the University of Texas School of Law, expected to graduate in May 2024.
Abstract: Since its establishment in 1982, the Federal Circuit’s jurisdiction has been the subject of substantial litigation. In Christianson v. Colt Industries, the Supreme Court intervened in a jurisdictional dispute that arose a mere six years after the establishment of the Federal Circuit, ruling that cases falling under the Federal Circuit’s jurisdiction must require resolution of patent law issues to be considered “arising under” patent law. This decision ushered in a wave of cases involving underlying patent law issues that, technically, required resolution in order for the case to be properly decided. These cases, however, involved underlying patent law issues—and the Supreme Court’s guidance in Christianson did not help the Federal Circuit or other circuit courts create a uniform rule. Consequently, cases with a patent law “case-within-a-case” bounced between the Federal Circuit and regional circuit courts.
The Supreme Court and Congress have not clarified the Federal Circuit’s muddied jurisdiction jurisprudence—leaving the problem to be addressed by the Federal Circuit reviewing the issue through a new lens. This Note presents potential solutions to this problem, solutions that encourage the Federal Circuit to become the gap-filler originally envisioned by legislators when they drafted the Federal Courts Improvement Act of 1982.
When Freedom of Speech Becomes Unfair Competition: Vidal v. Elster and the Need to Protect § 1052(c)
Citation: 32 Tex. Intell. Prop. L.J. 23 (2023)
Author: Kent A. Pederson
About: Juris Doctor, Liberty University School of Law (2023); Senior Staff, Liberty University Law Review, Volume 17; Bachelor of Arts, Honours, Political Science, Carleton University (2018).
Abstract: Before the case of In re Elster, everyone in the United States had the right to place offensive phrases on t-shirts regarding former President Trump and sell them if they chose to do so. After the Federal Circuit’s holding in Elster, no one in the nation may ever be able to put “TRUMP TOO SMALL” on clothing or else they might get sued for trademark infringement. Over the past few years, trademarks have become the subject of Supreme Court redlining: first through the elimination of the disparagement clause in § 1052(a) in Matal v. Tam and next through the immoral or scandalous clause of § 1052(a) in Iancu v. Brunetti. Denial of federal trademarks under the Lanham Act because of viewpoint has come under immense scrutiny and judicial review as a violation of the free speech clause of the First Amendment. However, this line of cases speaks to proper viewpoint discrimination jurisprudence, and the Federal Circuit’s opinion in Elster—overturning the denial of the proposed word mark “TRUMP TOO SMALL” on t-shirts as a violation of § 1052(c)—misapplies the law and stretches the policy of Matal and Brunetti incorrectly against content-based restrictions. Under the Federal Circuit’s logic, the proposed mark could not be denied by the USPTO because that would constitute impermissible content-based restrictions on speech that served no compelling governmental interest. Under the court’s logic, the First Amendment concerns about criticizing the government outweighed the government’s concerns in limiting the speech. However, the court missed a critical fact: no speech was ever silenced. The salient question in a trademark application is whether to confer federal monopoly rights to one person. In this case, the salient question is whether the entire country should have the right to put “TRUMP TOO SMALL” on t-shirts, or whether only one trademark holder should have that right. Before the Federal Circuit’s holding, Trump himself could have put that phrase on a t-shirt and placed it into the stream of commerce, along with everyone else. Now, both Trump and the rest of the country might be barred from using that phrase on t-shirts—else they will create a likelihood of confusion—even though Trump owns the rights to his name, image, and likeness, and the point of the Federal Circuit’s opinion was to encourage more speech, not silence the rest of the country.
A Detailed Study of Court Decisions on Admissibility of Intellectual Property Damages Experts
Citation: 32 Tex. Intell. Prop. L.J. 45 (2023)
Author: Deepa Sundararaman & Cleve B. Tyler
Abstract: Damages experts’ opinions in intellectual property litigation are routinely challenged for failing to reach standards set forth in the Supreme Court’s 1993 Daubert decision. Our study is the first of its kind, in performing a systematic and in-depth review of court decisions, including an analysis of the substantive reasons for challenge. We studied more than 400 Daubert orders covering nearly 1,300 decisions over a six-year period from 2015 through 2020.
Patent cases make up a significant majority of our dataset. Overall, we find an exclusion rate of 24%. While plaintiff experts are challenged more frequently than defendant experts, their exclusion rates are not significantly different. However, the type of analysis challenged appears to matter—in particular, lost profits analyses are excluded at lower rates than other types of analyses, and experts described as offering legal opinions are excluded at higher rates. Exclusion rates vary by district, with the Northern District of California (NDCA) having higher exclusion rates and the Eastern District of Texas (EDTX) having lower exclusion rates than the rest of the country. We study the impact of the Supreme Court’s Heartland decision on exclusion rates, which has reduced a plaintiff’s ability to engage in “venue shopping.” Overall, rates of exclusion in EDTX and Delaware declined following the decision, with a moderate increase in exclusion rates in NDCA.
Finally, we find substantial disparities in exclusion rates among judges. Among the top ten judges ranked by number of decisions, five have relatively “low” exclusion rates of less than 15% and four have relatively “high” exclusion rates greater than 30%. Variations such as these, along with differences by jurisdiction, raise questions about courts’ consistency in application of the Daubert standard—questions that are left for future researchers and policymakers to address.
January 2024
Why Pharmaceutical Patent Thickets Are Unique
Citation: 32 Tex. Intell. Prop. L.J. 79 (2024)
Author: Michael A. Carrier & S. Sean Tu
About: Michael A. Carrier is the Board of Governors Professor at Rutgers Law School. S. Sean Tu is a Professor of Law at West Virginia University College of Law. Both authors contributed equally.
Abstract: Companies have protected their products with large portfolios of patents. The drug company AbbVie, for example, has collected more than 100 patents on its blockbuster drug Humira. Many have raised concerns about such “patent thickets” in the pharmaceutical industry, which have become a pressing concern given the increasing frequency of thickets and effects on patients’ lives. In response, some have downplayed concern by pointing to large patent portfolios in other industries, in particular, high technology. This Essay offers the first refutation of this argument, explaining why it fails on two basic levels.
First, pharmaceutical companies have all of the patents they need to enter the market. As a result, they do not need to license, instead accumulating patents to block rivals. In contrast, because of the presence of patents from multiple owners in products, high-technology firms need to engage in “cross licensing,” which leads them to amass patents. Exclusion is exacerbated by the pharmaceutical industry’s higher regulatory barriers and firm concentration.
Second, we offer original empirical evidence supporting our hypothesis that pharmaceutical firms use duplicative patents to block market entry. We learn useful information from an analysis of “continuation patents,” which cannot disclose any new matter. We find that continuations have recently increased in the pharmaceutical industry, especially as compared to the high-technology industry. We also find that the pharmaceutical industry litigates continuation patents at a much higher rate than the high-technology industries, which is consistent with keeping rivals off the market. We show similar results for “method-of-use patents,” which drug firms have used to delay generic entry, and for the Humira patent thicket.
Destruction, Proportionality, and Sustainability: A Law-and-Economics Analysis
Citation: 32 Tex. Intell. Prop. L.J. 111 (2024)
Author: Thomas F. Cotter & Chung-Lun Shen
About: Thomas F. Cotter is an Associate Dean for Research and Planning and a Taft Stettinius & Hollister Professor of Law at the University of Minnesota Law School. Chung-Lun Shen is an Associate Dean and Distinguished Professor at National Chengchi University College of Law in Taiwan (Republic of China).
Abstract: This Paper undertakes a law-and-economics analysis of the remedy of destruction (and, subsidiarily, the related remedies of recall and removal) of products that infringe intellectual property (IP) rights. We begin with a brief survey of international, regional, and domestic law and practice, observing that (1) courts generally are believed to be more likely to order the destruction of copyright- and trademark-infringing goods than of patent-infringing goods, and (2) the frequency with which courts order the destruction of patent-infringing goods varies from one country to another. Our observations lead us to present two principal theses.
The first is that a comparative reluctance to order the destruction of patent- infringing goods, as opposed to copyright- or trademark-infringing goods, would be consistent with economic considerations. From an economic standpoint, destruction can be viewed both as a complement to injunctive relief and as a substitute (albeit an imperfect one) for ongoing monitoring of an infringer’s compliance with the terms of an injunction. The social benefits arising from substituting destruction for monitoring, however, are likely to be lower—on average, and perhaps subject to regional variation—for patent-infringing goods than for products that infringe other IP rights. In addition, although observers have long noted that the private and social costs of destruction provide a rationale for withholding that remedy when it would cause disproportionate harm to the defendant or third parties, these costs may be unusually high in patent cases—particularly that subset of cases in which the risk of patent holdup is substantial. In view of these factors, the social costs of ordering the destruction of patent-infringing goods are likely to outweigh the social benefits in a comparatively broader swath of cases.
Our second thesis can be best understood if we first pose a question: given that courts generally have authority to consider proportionality when deciding whether to order the destruction of infringing goods, why are legislatures and courts (other than in the United States and, to some degree, other common-law countries) so unwilling to consider proportionality when deciding whether to grant injunctive relief? One obvious reason is that a stay or denial of injunctive relief imposes greater costs on the judiciary, insofar as a court that stays or denies an injunction must be prepared to set the terms of an interim or ongoing royalty; in addition, a stay or denial may introduce additional error costs to the extent courts impose over- or under-compensatory royalties. We propose, nonetheless, that the factors that sometimes persuade courts to deny requests for destruction should render them at least marginally more receptive than they currently are to staying or denying injunctions, particularly when there is a substantial risk of holdup. In addition, environmental costs may be reduced if, in appropriate cases, courts were more willing to stay injunctions pending the sell-off or design-around of infringing products rather than requiring their destruction or long-term storage.
Utility, Copyright, and Fair Use after Warhol
Citation: 32 Tex. Intell. Prop. L.J. 135 (2024)
Author: Keith N. Hylton
About: Keith Hylton is a William Fairfield Warren Distinguished Professor of Boston University and Professor of Law at Boston University School of Law and can be reached at knhylton@bu.edu. For helpful comments on an earlier draft, he thanks Henry Smith, Michael Meurer, Gary Lawson, Jack Beermann, Kristelia Garcia, Christopher Robertson, David Seipp, and David Walker. I also thank participants in workshops at Boston University, Georgetown University, Harvard University, and University of California at Berkeley for their comments and questions.
Abstract:This Paper is a reaction to AWF v. Goldsmith (Warhol), which found that Warhol’s adaptation of a photograph of Prince, taken by photographer Lynn Goldsmith, is not protected from copyright liability by the fair use defense. The Warhol dissent accuses the majority of being overly concerned with the commercial character of Warhol’s use, while the dissent emphasizes the artistically transformative quality of Warhol’s adaptation. These different approaches provide strong evidence that the theory of fair use remains unclear to the Court. There is a need for a simple positive theory of the fair use doctrine. That need was largely met by Gordon’s article in 1982. I aim to develop the economic theory of fair use further, especially in light of case law since 1982. A theory of fair use is at the same time a theory of the scope of copyright. I clarify the economic basis for fair use, taking advantage of basic concepts in welfare economics. As a general matter, the optimal scope of copyright minimizes the sum of dynamic (having to do with incentives over time) and static (having to do with allocation at a given time) welfare costs. One proposition advanced is that the concepts of economic complementarity, substitutability, and preference correlation provide crucial analytical tools in resolving fair use disputes. This proposition may seem narrow, but it stands the approach taken in the cases on its head. I explain how the approach urged here works by applying it to several cases, including Warhol and Google v. Oracle.
(Dis)trust in the Process: U.S. Foreign Policy as an Obstacle to an Efficient International Intellectual Property Regime
Citation: 32 Tex. Intell. Prop. L.J. 187 (2024)
Author: Gillian R. Schutt
About: Gillian R. Schutt; B.A. Neuroscience, Colgate University, 2020; J.D. Candidate, Boston University School of Law, 2024. The author wishes to thank Boston University Professor Robert D. Sloane for his guidance in preparing this article.
Abstract: The United States has a reputation as a global hub of innovation and strives to maintain this identity on a global scale through the promotion of its intellectual property (IP) policies. While the U.S. advocates for increased cooperation and compromise to facilitate stronger and more efficient IP protection worldwide, progress thus far conforms to terms set by the United States requiring significant changes to foreign laws. However, the United States consistently opposes compromises requiring changes to American law. Despite technological progress that could facilitate communication between patent offices, there has been little change in the governing structures of international IP law. Consequently, inefficiencies during patent examination are causing significant backlog and monetary loss. In considering the current state of affairs in the international IP sphere, this Paper will analyze the history and original goals of international IP law, assess the deleterious effect of innovation nationalism on cooperation, and propose a mechanism using existing structures to build a sustainable globalized IP regime.