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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 Senior Fellow Adam Mossoff Participates at Listening Session on USPTO-FDA Collaboration
Twenty speakers, including Hudson Senior Fellow Adam Mossoff, provided comments in a listening session hosted by the United States Patent and Trademark Office (USPTO) and Food and Drug Administration (FDA) in response to proposals to increase interagency collaboration and information sharing on drug patent applications. During the event, some commentators called into question the reliability of data that drives the debate on issues such as “patent thickets” and continuation practices. Professor Mossoff presented his policy brief, “Unreliable Data Have Infected the Policy Debates Over Patents,” which exposes how drug patent numbers from the Initiative for Medicines, Access & Knowledge (I-MAK) are unreliable given unexplained, vast discrepancies between I-MAK’s drug patent numbers and the patents reported in official, public sources at the FDA and in court opinions. Professor Mossoff and others emphasized that the FDA and USPTO need to engage in evidence-based policymaking, and not rely on policy-based evidence-making, especially with biomedical innovation.
The SNIP: Experts urge the USPTO and FDA to focus on evidence before introducing sweeping changes to the system.
Learn More:
WATCH: “USPTO-FDA Listening Session Part 1,” United States Patent and Trademark Office (January 19, 2023).
WATCH: “USPTO-FDA Listening Session Part 2,” United States Patent and Trademark Office (January 19, 2023).
READ: “USPTO-FDA Listening Session: Patient Advocates Want Access, Patent Advocates Want Evidence,” Eileen McDermott, IPWatchdog (January 19, 2023).
CASE DEVELOPMENTS
Multiple Suits Challenge AI Companies for Copyright Infringement
Popular artificial intelligence (AI) companies face a series of copyright infringement suits that challenge conduct ranging from reproducing open-source code to scraping images from the web without the consent of the original artists. Microsoft and its business partner OpenAI have been sued in a proposed class action alleging that the AI-powered coding assistant GitHub Copilot relies on “software piracy on an unprecedented scale.” Similarly, Getty Images has sued Stability AI for unlawfully copying and processing millions of images protected by copyrights without a license. These cases are only in their earliest stages of litigation, but they could have a huge effect on the broader world of AI and copyrights.
The SNIP: AI companies are engulfed in copyright infringement suits amid mounting concerns around the threats these technologies present to copyright creators and licensors.
Learn More:
READ: The Lawsuit That Could Rewrite the Rules of AI Copyright,” James Vincent, The Verge (November 8, 2022).
READ: “Microsoft, OpenAI, GitHub Face Copyright Suit Over Coding Tool,” Isaiah Poritz, Bloomberg Law (November 4, 2022).
READ: “Artists Attack AI: Why the New Lawsuit Goes Too Far,” Aaron Moss, Copyright Lately, (January 23, 2023).
Federal Circuit Affirms Decision to Wipe Out a $308.5 Million Patent Verdict Against Apple
On January 20, 2023, the Federal Circuit upheld a district court ruling that threw out a $308.5 million jury verdict against Apple for infringing patents owned by Personalized Media Communications (PMC). The district court found that the patents were unenforceable under the doctrine of prosecution laches, which provides that "unreasonable and unexplained" delays in the patent application process may preclude enforcement. The court reasoned that PMC acted unreasonably by delaying the patent application process from 1981 until the patent was issued in 2012, and the company continuously amended the patent to cover technology that was being developed by Apple. Judge Stark dissented, explaining that PMC's delays largely ended after the patent application was filed in 1995 and that Apple failed to prove that it had developed its products over the intervening years without any awareness of PMC’s potential patent rights.
The SNIP: Federal Circuit finds that PMC delayed the patent prosecution process, resulting in unenforceable patents.
Learn More:
READ: “Split Fed. Circ. Upholds Ax of $308M Apple Patent Verdict,” Ryan Davis, Law360 (July 7, 2022).
READ: “Apple Wins Ruling Voiding Patent in $308.5 Million Case,” Susan Decker, Bloomberg (Aug 6, 2021).
READ: Personalized Media Communications, LLC v. Apple, Inc., 552 F. Supp. 3d 664 (E.D. Tex. 2021).
Jury Sides with Hermès in Trademark Trial Over MetaBirkins NFTs
On February 8, 2023, a federal jury determined that MetaBirkins creator Mason Rothschild violated Hermès’ “Birkin” trademark by selling its “MetaBirkin” nonfungible tokens (NFT). MetaBirkins, which sold for about $450, are NFT-linked digital images that mimic the design of the Hermès Birkin bag. In January 2022, Hermès filed suit when it became concerned about consumer confusion after some media outlets incorrectly identified MetaBirkins as a Hermès product , a classic case of customer confusion that triggers liability for trademark infringement. Rothschild argued his MetaBirkin NFTs are “protected free speech under the First Amendment because the artworks and associated NFTs are art and commentary.” The jury found him liable for violating Hermès' trademark and awarded damages of $133,000. This trial was the first of its kind to explore how NFTs interact with intellectual property rights.
The SNIP: Hermès prevails in MetaBirkin case, a first-of-its-kind trial involving NFTs and intellectual property rights.
Learn More:
LEGISLATION & POLICY DEVELOPMENTS
USPTO Calls for Comments on New Rules to Ensure the Robustness and Reliability of Patent Rights
Last October, the United States Patent and Trademark Office (USPTO) issued a Request for Comments on “initiatives to ensure the robustness and reliability of patent rights.” The comments were initially due on February 1, 2023, but the comment period was extended for a second time to February 28. This initiative is a response to President Joe Biden’s executive order on "Promoting Competition in the American Economy," which directed the USPTO and Food and Drug Administration to suggest mechanisms to "ensure that our patent system properly and adequately protects innovation.” Hudson Institute Senior Fellow Adam Mossoff submitted comments in the initial submission period, explaining that the proposed rules, such as imposing more restrictions on continuation practice, were driven by rhetoric about the “evergreening” of drug patents. He also explained that the USPTO should adhere to evidence-based policymaking lest it cause harm to real innovators and to the innovation economy with new regulatory restrictions on the ability to obtain patents.
The SNIP: USPTO receives multiple comments urging the development of a reliable and flexible patent system to ensure the robustness and reliability of patent rights.
Learn More:
READ: “Request for Comments on USPTO Initiatives to Ensure the Robustness and Reliability of Patent Rights,” Federal Register (October 4, 2022).
READ: “Comments on USPTO Initiatives to Ensure the Robustness and Reliability of Patent Rights,” Adam Mossoff (February 1, 2023).
READ: “Why Does the USPTO Keep Extending the Deadline for Comments on Robust and Reliable Patents?,” Eileen McDermott, IPWatchdog (February 16, 2023).
READ: “The USPTO Claims it Wants to Ensure ‘Robust and Reliable’ Patents – But Its Questions Imply Another Assault on Patent Owners,” Russ Krajec, IPWatchdog (February 1, 2023).
