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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’s Senior Fellow Adam Mossoff Submits Final Comments to the ITC on COVID-19 Waiver
On May 5, 2023, Hudson Senior Fellow Adam Mossoff submitted his final set of comments to the International Trade Commission (ITC) in its investigation on whether the United States should support a proposed extension of the waiver for patents on COVID-19 diagnostics and drugs by the World Trade Organization under the Trade-Related Aspects of Intellectual Property Rights (TRIPS). The administration asked the ITC to study whether such an extension is justified. In his submission, Professor Mossoff responded to misrepresentations of U.S. law by advocates for an extension, who falsely claimed that the U.S. already engages in compulsory licensing of patents. Consistent with his prior testimony and submissions to the ITC, Professor Mossoff continued to urge the U.S. to follow evidence-based policymaking, especially when it comes to the patent system, which has been the driver of the U.S. innovation economy for over two centuries. For example, well over one-half of all new drugs are invented in the U.S. If the U.S. changes course and fails to provide reliable and effective patent protections for U.S. innovators, the U.S. will cede technology leadership in today’s global innovation economy, harming patients and empowering China as a competitive threat to the U.S.
The SNIP: Hudson’s Adam Mossoff again explains why the U.S. should not support an extension of the WTO’s COVID-19 patent waiver.
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CASE DEVELOPMENTS
Supreme Court Weighs In on Transformative Fair Use in Blockbuster Copyright Case
On May 18, 2023, the Supreme Court handed down its decision in Andy Warhol Foundation v. Goldsmith, a closely watched copyright case. The Court analyzed the Andy Warhol Foundation’s use of Lynn Goldsmith’s photograph of Prince under the fair use doctrine, which excuses certain uses of copyrighted works as noninfringing. More specifically, the Court focused on the first fair-use factor, which looks at the purpose and character of the use, including whether it is commercial. The majority, led by Justice Sonia Sotomayor, rejected the Foundation’s argument that Warhol’s new meaning and message were enough to sway the factor in its favor. The Court reaffirmed that the factor focuses on whether there is a further purpose or different character that justifies the copying. Because the Foundation’s use of Goldsmith’s photograph was for the same purpose—licensing images of Prince to magazines—and commercial, the Court held that the first fair use factor favored Goldsmith.
The SNIP: Andy Warhol Foundation’s use of Lynn Goldsmith’s photograph was not transformative because the works share similar purposes, and it was used commercially.
Learn More:
READ: Andy Warhol Foundation v. Goldsmith, Docket No. 21-869, U.S. Supreme Court (May 18, 2023).
READ: “Landmark Warhol Decision Reins in Transformative Fair Use,” Kevin Madigan, Copyright Alliance (May 19, 2023).
READ: “Justices Rule Against Andy Warhol Estate in Copyright Dispute,” Ronald Mann, SCOTUSblog (May 19, 2023).
READ: “AWF v. Goldsmith and Justification,” Terry Hart, Copyhype (June 21, 2023).
UK Patents Court Issues FRAND Decision in InterDigital v. Lenovo
On March 16, 2023, the United Kingdom Patents Court issued a decision in InterDigital v. Lenovo, ordering Lenovo to pay $138.7 million for the unlicensed use of InterDigital’s 3G, 4G, and 5G standard-essential patents (SEPs). The court ruled that the royalty Lenovo proposed to InterDigital was below the appropriate fair, reasonable, and nondiscriminatory (FRAND) range, thus making Lenovo an unwilling licensee. Although the court held that InterDigital rightfully rejected Lenovo’s proposed rate, it also found that InterDigital acted as an unwilling licensor for offering a rate that was above the FRAND range. The court reasoned that InterDigital failed to offer persuasive evidence of similar prior licensing agreements with other SEP implementers at its proposed rate. InterDigital said that it plans to appeal the case, emphasizing that the court’s view of InterDigital’s “opaque” licensing program is inaccurate.
The SNIP: UK Patents Court sets FRAND license and orders Lenovo to compensate InterDigital for using its standard-essential patents.
Learn More:
READ: InterDigital v. Lenovo,” Case No. HP-2019-000032, UK Patents Court (Mar. 16, 2023).
READ: “InterDigital v. Lenovo - High Court Sets Global FRAND License Terms,” Toby Sears et al., Lexology (Mar. 17, 2023).
READ: “UK Court Hands Down Key FRAND Ruling in InterDigital v. Lenovo,” Eileen McDermott, IPWatchdog (Mar. 19, 2023).
Supreme Court Rules on Genus Claims in Amgen v. Sanofi
On May 18, 2023, the Supreme Court issued a decision in Amgen v. Sanofi, holding that Sanofi did not infringe Amgen’s patents on newly discovered antibodies. In this case, the Court was asked to rule on the legitimacy of genus claims in patent law with Sanofi’s counsel explicitly telling the Court that it should prohibit them completely. A genus claim is essentially a broadly claimed invention, and it has been essential in patent law to securing the fruits of labors of inventors from the Industrial Revolution to the biotech revolution. The specific legal issue in the case was whether a genus claim, given its wide breadth of coverage of innumerable variations of the invention, properly “enabled” another person skilled in the art to make and use the patented invention. The unanimous Court reiterated longstanding and historical case law on enablement, which provides that another skilled person must not engage in painstaking or undue experimentation to create and use an invention after reading a patent. The Court concluded that Amgen’s genus claim failed this test, but it did not accept the invitation of Sanofi to eliminate genus claims entirely.
The SNIP: Supreme Court holds that Amgen’s genus claims in its patents are invalid because they failed the enablement requirement in patent law.
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LEGISLATION & POLICY DEVELOPMENTS
USPTO Issues Advance Notice of Proposed Rulemaking on PTAB Reform
On April 20, 2023, the U.S. Patent and Trademark Office (USPTO) issued an advance notice of proposed rulemaking (ANPRM) for potential reforms to the rules governing the operations of the Patent Trial and Appeal Board (PTAB). According to the extensive notice, the USPTO is considering numerous possible rules that it will propose in a formal notice of proposed rulemaking, including whether to restrict PTAB challenges filed by “for-profit, non-competitive entities,” to codify in a formal rule a revised version of the Fintiv discretionary denial test for petitions, to permit petitioners to pay additional fees for increased page limits on petitions, and to require disclosure of any third-party litigation financing, among many others. The USPTO accepted comments on the proposed rulemaking through June 20, 2023.
The SNIP: The USPTO issued an advanced notice of proposed rulemaking on AIA proceedings at the PTAB.
Learn More:
READ: “Changes Under Consideration to Discretionary Institution Practices, Petitioner Word-Count Limits, and Settlement Practices for America Invents Act Trial Proceedings Before the Patent Trial and Appeal Board,” 88 Fed. Reg. 24503-24518, U.S. Patent and Trademark Office (Apr. 21, 2023).
READ: “USPTO Issues Advance Notice of Proposed Rulemaking for America Invents Act (AIA) Proceedings Before the Patent Trial and Appeal Board,” U.S. Patent and Trademark Office (Apr. 20, 2023).
READ: “Comment on USPTO Advance Notice of Proposed Rulemaking on PTAB Rules,” Adam Mossoff, Hudson Institute (June 20, 2023).
