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Happy New Year and 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 Institute Hosts Panel Discussion on Compensating Creators
In recent years, the emerging content ecosystem and creator economy have reached new heights, generating billions of dollars in revenue each year as new opportunities to create, distribute, and monetize copyrighted content have emerged. This has proven beneficial for some, particularly the top 1 percent of creators and their commercial partners. However, the remaining 99 percent often miss the opportunity to reap the benefits from the commercial or other uses of their works.
On December 16, 2021, Hudson Institute Legal Fellow Devlin Hartline led a discussion with creators about new initiatives to ensure that creators are compensated properly for the fruits of their creative labors. This panel explored alternative avenues to allow creators and commercial owners of copyrighted works to retain control of and to be compensated in this changing environment.
The SNIP: Hudson panel addresses new initiatives that allow creators to be compensated fairly for their copyrighted works.
CASE DEVELOPMENTS
Association of American Publishers Sues Maryland for Law on Library E-books Licensing
On December 9, 2021, the Association of American Publishers (AAP) sued the Maryland Attorney General to enjoin and overturn a Maryland law that compels publishers to distribute e-books, audiobooks, and other digital literary works to public libraries in Maryland. The AAP argues that the law, which came into effect on January 1, 2022, is unconstitutional and conflicts with the federal Copyright Act. Other states—including Rhode Island and Massachusetts—are considering the adoption of a similar legislation. Conversely, New York State Governor Kathy Hochul recently vetoed a bill that would force authors, publishers, and other copyright owners to grant similar digital licenses to New York public libraries.
THE SNIP: AAP seeks to enjoin and overturn Maryland law mandating that owners of literary works make their publications available to public libraries in digital formats.
Learn More:
READ: AAP Complaint, Association of American Publishers v. Frosh (No. 1:21-cv-03133-DLB) (D. Md. Dec. 9, 2021).
READ: “The Association of American Publishers Files Suit Against the State of Maryland over Unprecedented Encroachment into Federally Protected Copyrights,” AAP (Dec. 9, 2021).
READ: “Comment from Maria A. Pallante, President and CEO, Association of American Publishers on New York State Governor Kathy Hochul’s Decision to Veto Unconstitutional eBooks Bill,” AAP (Dec. 30, 2021).
Shopify Sued for Selling Unauthorized School Textbooks
On December 1, 2021, five educational publishers—Pearson Education, McGraw Hill, Macmillan Learning, Cengage Learning, and Elsevier—sued Shopify for copyright and trademark infringement, seeking damages of up to $550 million. Shopify is a website that allows users to set up their own online stores to sell goods and services. Similar to prior lawsuits filed over the years by the creative industries against internet intermediaries, the publishers accuse Shopify of knowingly hosting pirated copies of their textbooks. Specifically, they accuse Shopify of failing to take the necessary actions to remove and to prevent this digital piracy from occurring on its website.
The SNIP: Five major educational publishers sue Shopify for enabling its website users to sell pirated copies of textbooks.
Learn More:
LEGISLATION & POLICY DEVELOPMENTS
Senate Judiciary Committee Holds Confirmation Hearing for Kathi Vidal
On December 1, 2021, the Senate Judiciary Committee held a confirmation hearing for Kathi Vidal, President Biden’s nominee for Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. During the hearing, Vidal emphasized the importance of “strengthening the value of IP” and called for “more clarity when it comes to patent eligibility.” Additionally, she stated that she will seek to increase patent quality and the integrity of the trademark registry to advance innovation in the United States.
The SNIP: During her confirmation hearing, Kathi Vidal pledged to strengthen IP law and provide more clarity for patent eligibility as new director of the USPTO.
Learn More:
READ: “Vidal Looks All Set to Lead the USPTO after Confident Senate Hearing,” Angela Morris et al, IAM Media (Dec. 2, 2021).
READ: “Vidal Confirmation Hearing Should Provide a Hint at What’s Ahead for Patent Owners," Gene Quinn, IPWatchdog (Nov. 29, 2021).
READ: Katherine Vidal Nomination, PN1326, US Congress (Dec. 1, 2021).
U.K. and U.S. Agencies Launch Policy Initiatives on Standard Essential Patents
Governmental agencies in both the U.S. and the U.K. have launched new policy initiatives concerning the licensing and litigation of standard‑essential patents (SEPs). On December 6, 2021, the Antitrust Division of the U.S. Department of Justice (DOJ) invited comments on a new draft policy statement regarding licensing negotiations and remedies for SEPs. Similarly, on December 7, 2021, the UK Intellectual Property Office (IPO) launched a consultation on the licensing of SEPs, asking interested parties to comment on whether the current framework “strikes the right balance for all entities involved.” The DOJ and the IPO are accepting comments until February 4, 2022 and March 1, 2022 respectively.
The SNIP: The IPO and the DOJ invite the public to comment on the framework for licensing and litigating SEPs.
Learn More:
READ: “Public Comments Welcome on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments,” U.S. Department of Justice (Dec. 6, 2021).
READ: “Open Consultation: Standard Essential Patents and Innovation,” U.K. Intellectual Property Office (Dec. 7, 2021).
READ: “Deadline Extended for Submitting Comments on Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments,” U.S. Department of Justice (Dec. 13, 2021).
