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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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CASE DEVELOPMENTS
Supreme Court Hears Oral Argument in Warhol Copyright Case
On October 12, the Supreme Court heard oral arguments in Andy Warhol Foundation v. Goldsmith, which concerns Goldsmith’s copyrighted photograph of musician Prince that visual artist Andy Warhol used as a reference for an unlicensed series of silkscreen prints. The district court held that Warhol’s prints were fair use, but the Second Circuit disagreed, holding that Warhol’s use was not transformative under the first fair use factor. At oral argument, Warhol’s counsel argued that the use was transformative since a different meaning or message could be “reasonably perceived” by the public. Counsel for Goldsmith countered that an overly broad application of transformativeness would threaten the exclusive right to prepare derivative works. The Office of the Solicitor General, siding with Goldsmith, encouraged the Supreme Court to consider the lack of an adequate justification to make use of Goldsmith’s work in creating the Prince series.
The SNIP: The Supreme Court heard oral arguments in Andy Warhol Foundation v. Goldsmith, a case that will shape transformative fair use for years to come.
Learn More:
READ: “Supreme Court Struggles with Warhol’s Transformative Use Theory,” Kevin Madigan, Copyright Alliance (October 13, 2022).
READ: “Justices Probe Fair Use in Warhol-Prince Copyright Argument,” Kyle Jahner, Bloomberg Law (October 12, 2022).
READ: “The Stakes in Andy Warhol Foundation v. Goldsmith,” Bruce E. Boyden, Marquette University Law Faculty Blog (October 3, 2022).
LISTEN: Oral Argument Audio, Andy Warhol Found., Inc. v. Goldsmith, Supreme Court of the United States (October 12, 2022).
LEGISLATION & POLICY DEVELOPMENTS
IEEE Changes Its Controversial Patent Policy
On September 20, the Institute of Electrical and Electronics Engineers (IEEE) approved amendments to its patent policy, revising the controversial provisions that it adopted in 2015. The updated policy repeals the clause that restricts patent owners from seeking an injunction against infringers unless the infringer failed to comply with the outcome of a court proceeding. Instead, the policy adopts a new provision that limits the use of such remedy against infringers that are willing to negotiate in good faith. It also no longer mandates the use of a specific royalty base for the determination of reasonable royalties, nor does it preclude the reliance on comparable licenses. The updates to the IEEE patent policy will be effective from January 1, 2023.
The SNIP: The IEEE approves amendments to its controversial 2015 patent policy, bringing it in line with policies adopted by other standard-setting bodies.
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New Bipartisan Group Focuses on Importance of IP for Innovation
On September 22, the Council for Innovation Promotion (C4IP)—a bipartisan organization focused on promoting and defending U.S. innovation through the IP system—was formally launched. Its founding members are former U.S. Patent and Trademark Office Directors Andrei Iancu and David Kappos, appointed by a Republican president and a Democratic president, respectively, as well as retired U.S. Court of Appeals for the Federal Circuit Judges Kathleen O’Malley and Paul Michel, also appointed by a Democratic president and a Republican president, respectively. Former vice president of U.S. policy at the U.S. Chamber of Commerce’s Global Innovation Policy Center, Frank Cullen, heads the organization as executive director. Senators Chris Coons and Thom Tillis were present at the inaugurating event for C4IP, taking the occasion to announce their co-sponsorship of the Patent Eligibility Restoration Act.
The SNIP: A new bipartisan organization launched to counter anti-IP narratives and promote U.S. innovation.
Learn More:
READ: “IP Leaders Join Forces to Counter Anti-IP Narratives,” Eileen McDermott, IPWatchdog (September 22, 2022).
READ: “Former USPTO Directors Launch Bipartisan Advocacy Organization Dedicated to Promoting and Defending U.S. Innovation,” Cision PR Newswire (September 22, 2022).
READ: “Coons Announces He Will Co-Sponsor Tillis’ Patent Eligibility Restoration Act,” Eileen McDermott, IPWatchdog (September 28, 2022).
Revised Version of Pride in Patent Ownership Act Introduced
On September 21, Senators Patrick Leahy and Thom Tillis introduced the Pride in Patent Ownership Act (PPOA), which requires all patent assignments or interests in a patent to be recorded within 90 days. Under the PPOA, parties would not be able to get “increased damages” for willful infringement under 35 U.S.C. § 284 unless the interest was recorded within 90 days. The bill’s proponents argue that the measure would assist small enterprises that wish to contact patent owners to seek a license. But critics of the bill have emphasized that introducing such an extreme penalty for missing an administrative deadline would encourage willful infringement.
The SNIP: Senators Patrick Leahy and Thom Tillis introduce a revised version of the PPOA that would change patent filing requirements.
Learn More:
OpenSky Earned Full Sanctions of USPTO
On October 4, Kathi Vidal, director of the U.S. Patent and Trademark Office (USPTO), sanctioned OpenSky for misusing the inter partes review (IPR) petition process by asking VLSI and Intel for monetary compensation in exchange for dropping its own procedure in front of the USPTO. In a public statement, Vidal said OpenSky’s conduct consisted of “discovery misconduct, violation of an express order, abuse of the IPR process, and unethical conduct,” which, when “taken together, . . . warrants sanctions to the fullest extent of [her] power.” Accordingly, Vidal banned OpenSky from participating in the Patent Trial and Appeal Board (PTAB) proceeding and ordered it to compensate VLSI unless it can convince the PTAB as to why it should not be ordered to pay compensatory damages.
The SNIP: USPTO Director Vidal sanctioned OpenSky “to the fullest extent” after finding it tried to elicit payments for dropping its PTAB case.
READ: “Vidal Sanctions OpenSky for Abuse in VLSI Patent Challenge,” Dani Kass, Law360 (October 4, 2022).
READ: “USPTO Director Sanctions Patent Challenger in $2.1 Bln Intel Dispute,” Blake Brittain, Reuters (October 5, 2022).
READ: “Vidal Bans OpenSky from Active Role in VLSI IPR in Precedential Director Review Decision,” Eileen McDermott, IPWatchdog (October 4, 2022).
