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Welcome to The SNIP, a monthly newsletter by Urška Petrovčič, Adam Mossoff, and Devlin Hartline of Hudson Institute's Forum for Intellectual Property. The SNIP offers a brief breakdown of the latest policy issues and case developments in intellectual property.
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THE LATEST FROM HUDSON
Hudson Hosts Panel Discussion on Publishing Industry Copyright Challenges
On March 30, Hudson Institute hosted a panel discussion on the new legal and policy challenges in the publishing industry. The publishing industry has undergone significant changes over the past few decades to keep pace with technological changes and related changes in consumer demand and expectations. Consumers today have more opportunities than ever before to access digital works online, both legally and illegally. Beyond the challenges of new business models and ever-present piracy, there are many new legal and policy concerns that threaten to weaken or eliminate the exclusive rights undergirding the creative ecosystem. The panel of experts discussed hot-button issues, including digital first sale, controlled digital lending, state compulsory licensing, and ancillary rights.
The SNIP: Expert panelists discuss recent copyright challenges that have profound implications for the publishing industry in the digital age.
Learn More:
- WATCH: “New Copyright Challenges in the Publishing Industry,” Hudson Institute (March 30, 2022).
CASE DEVELOPMENTS
Fifth Circuit Finds No Injury for Automotive Car Suppliers in Standard-Essential Patents Disputes
The U.S. Court of Appeals for the Fifth Circuit held that automotive parts suppliers do not have standing to sue standard-essential patent (SEP) owners to compel them to license their SEPs to these suppliers. Continental, a supplier of parts to automobile companies, sued Avanci, an SEP licensing company, arguing that Avanci’s decision to license directly car manufacturers was a violation of both Avanci’s commitment to license its SEPs on fair, reasonable, and non-discriminatory (FRAND) terms and the antitrust laws. Continental sought an order by the court that Avanci must license to companies like Continental that are upstream in the supply chain. Since Continental’s customers were licensed by Avanci, the court ruled that Continental failed to show that Avanci’s licensing practice caused an actual harm and therefore it had no standing to bring the legal action.
The SNIP: The Fifth Circuit rules that automotive parts suppliers may not bring antitrust lawsuits against standard-essential patent owners for their refusal to license SEPs.
Learn More:
READ: Continental Automotive Systems Inc. v. Avanci LLC, No. 20-11032 (5th Cir. 2022).
READ: “Fifth Circuit Says Auto Parts Suppliers Have No Article III Standing to Bring Antitrust Claims Against SEP Holders,” Eileen McDermott, IPWatchdog (March 2, 2022).
READ: “Supplier Can’t Complain When SEP Holder Refuses to License,” Amol Parikh, The National Law Review (March 3, 2022).
Katy Perry Wins “Dark Horse” Copyright Infringement Appeal
On March 10, the U.S. Court of Appeals for the Ninth Circuit upheld the district court’s order vacating a $2.8 million jury award against Katheryn Hudson (a/k/a Katy Perry). In Gray v. Hudson, Christian hip-hop artists claimed that an eight-note repeating musical rhythm (an ostinato) in Perry’s song “Dark Horse” infringed the copyright in their song “Joyful Noise.” However, the court found that the ostinato consisted of “commonplace musical elements” that are not copyrightable because they lack originality. The court further stated that allowing this basic musical arrangement to receive copyright protection would give Gray an “improper monopoly” over simple sequences “or even the minor scale itself.”
The SNIP: Katy Perry wins copyright infringement appeal over her song “Dark Horse” because the allegedly infringed musical elements were unoriginal and unprotectable.
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LEGISLATION & POLICY DEVELOPMENTS
I-MAK Responds to Senator Tillis’ Request for Information on Methodology
On January 31, Senator Thom Tillis sent a letter to the Initiative for Medicines, Access & Knowledge (I-MAK) requesting that the organization disclose its private dataset and explain clearly its methodology that it used to reach the drug patent numbers it publishes in its well-publicized reports. Senator Tillis’ letter was prompted by a policy memo authored by Hudson Institute Senior Fellow Adam Mossoff that pointed to discrepancies between I-MAK’s patent numbers and those contained in official government sources, such as the FDA’s Orange Book and court opinions. In its response letter of March 9, I-MAK neither disclosed its dataset nor explained its methodology, claiming that the “patent landscape” is easily searchable, and it repeated its allegations that pharmaceutical companies engage in “opaque” practices in extending patent protections to exclude competition. On April 1, Senator Tillis sent a letter to the FDA and PTO, noting that I-MAK had not responded to his requests and further detailing additional misstatements of law and fact in I-MAK’s response letter of March 9.
The SNIP: In its response to Senator Tillis’ letter, I-MAK defends its dataset and asks for more transparency in the pharmaceutical industry.
Learn More:
READ: “I-MAK Defends Integrity of Its Patent Data in Response to Tillis Letter,” Eileen McDermott, IPWatchdog (March 9, 2022).
READ: “A Battle is Brewing Between a Senator and a Nonprofit over Pharma Patenting Practices,” Ed Silverman, STAT (March 16, 2022).
READ: Letter from Senator Thom Tillis to Dr. Califf and Mr. Hirshfeld (April 1, 2022).
Russia Allows Intellectual Property Theft from “Unfriendly Countries”
On March 7, as a response to the sanctions on Russia for its invasion of Ukraine, Prime Minister Mikhail Mishustin of Russia signed a decree that authorizes Russian citizens to use intellectual property from creators and innovators of countries that the Russian government deems to be “unfriendly.” Under the decree, Russian businesses can use any intellectual property without authorization and without having to pay compensation to the intellectual property owners. Russian courts have also stopped enforcing all intellectual property rights owned by innovators and creators in the “unfriendly countries” identified in the March 7 decree.
The SNIP: Russia authorizes piracy of intellectual property owned by innovators and creators in countries deemed “unfriendly” to Russia.
Learn More:
READ: “Russia Says its Businesses Can Steal Patents from Anyone in ‘Unfriendly’ Countries,” Hannah Knowles & Zina Pozen, Washington Post (March 9, 2022).
READ: “What it Means that Russian Businesses Can Now Legally Steal Intellectual Property from ‘Unfriendly Countries,’” Raj S. Davé and Shaomeng Hou, IPWatchdog (March 16, 2022).
READ: “Russia OKs Use of Peppa Pig TM as Sanctions Retaliation,” Dani Kass, Law360 (March 11, 2022).
Annual Report on Entertainment Market Shows Recovery After Pandemic Shutdowns
The Motion Picture Association’s annual report of the theatrical and home/mobile entertainment market shows a recovery in 2021. Though movie ticket sales and revenue have declined since the start of the pandemic in March 2020, the market is steadily improving, with global ticket sales increasing by 81 percent in 2021 compared to 2020. Theatrical and home/mobile entertainment, including streaming, has grown the most, with total revenue of $99.7 billion, passing 2019’s record high of $98.1 billion. The entertainment industry is starting to recover after navigating “a century’s worth of challenges” over the past two years.
The SNIP: The theatrical and home/mobile entertainment market has begun to recover from the downturn caused by the start of the pandemic in 2020.
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