GW Law Review Symposium on Patentable Subject Matter

The George Washington Law Review has published its symposium on "Cracking the Code: Ongoing § 101 Patentability Concerns in Biotechnology and Computer Software." Here are the five contributions:

Paul R. Michel, The Supreme Court Saps Patent Certainty. Former Federal Circuit Chief Judge Michel argues that courts "have only made things worse." The Supreme Court doesn't understand patent law or science, but the biggest problem is that the courts "don't focus enough on the systemic effect." Justice Breyer's assertion that § 103 is insufficient is "just stated as an oracular truth." The "only way forward that is feasible . . . is the Federal Circuit," which can "limit and clarify some of the broader statements" in recent Supreme Court cases. The § 101 exceptions were created "out of the air" and "they're not very good categories" because "it's not clear what's in and what's out," they overlap, and they are "subjective" and "indeterminate." Some might not trust the Federal Circuit after the "train wreck" of CLS Bank, "but it's the least worst alternative." "[T]he most important people of all that the patent system is designed to motivate . . . are the people who make investment decisions" like venture capitalists, and what they want is certainty, which we don't have now with § 101. The Federal Circuit has "had to fix Supreme Court problems" at least twice before, after eBay and KSR, and it can do it again.

The Eternal Battle of Copyright Fair Use v. Licensing

In All of This Has Happened Before and All of This Will Happen Again: Innovation in Copyright Licensing, Rebecca Tushnet considers whether easier, cheaper (even free) licensing of copyrighted works should supplant fair use doctrine. (Spoiler alert: no!). The abstract:

Claims that copyright licensing can substitute for fair use have a long history. This article focuses on a new cycle of the copyright licensing debate, which has brought revised arguments in favor of universal copyright licensing. First, the new arrangements offered by large copyright owners often purport to sanction the large-scale creation of derivative works, rather than mere reproductions, which were the focus of earlier blanket licensing efforts. Second, the new licenses are often free. Rather than demanding royalties as in the past, copyright owners just want a piece of the action — along with the right to claim that unlicensed uses are infringing. In a world where licenses are readily and cheaply available, the argument will go, it is unfair not to get one. This development, copyright owners hope, will combat increasingly fair use — favorable case law.

This article describes three key examples of recent innovations in licensing-like arrangements in the noncommercial or formerly noncommercial spheres — Getty Images’ new free embedding of millions of its photos, YouTube’s Content ID, and Amazon’s Kindle Worlds — and discusses how uses of works under these arrangements differ from their unlicensed alternatives in ways both subtle and profound. These differences change the nature of the communications and communities at issue, illustrating why licensing can never substitute for transformative fair use even when licenses are routinely available. Ultimately, as courts have already recognized, the mere desire of copyright owners to extract value from a market — especially when they desire to extract it from third parties rather than licensees — should not affect the scope of fair use.

I have a couple comments after the jump.

Jessica Silbey's The Eureka Myth

Jessica Silbey (Suffolk Law) has posted an excerpt from the introduction of her new book, The Eureka Myth: Creators, Innovators, and Everyday Intellectual Property (Stanford University Press). Everything I have heard about this project has sounded incredibly interesting, and the introduction has further whetted my appetite to read the book.

She conducted "fifty face-to-face interviews . . . with a wide range of scientists, engineers, musicians and artists, their business associates, and intellectual property lawyers over the course of four years . . . . to learn more about the intersection of intellectual property law on the one hand, and creative and innovative work on the other." "Contrary to the dominant stories of monetary incentives and wealth maximiation, the interviews in this book elaborate intellectual property's diverse functions and sporadic manifestations in the lives and work of artists, scientists, and their business partners and managers."

Silbey has also posted a separate chapter (from the SAGE Handbook of Intellectual Property) based on the same set of qualitative interviews: Promoting Progress: A Qualitative Analysis of Creative and Innovative Production. The chapter "investigates the notion of 'progress' in terms of the motives the interviewees provide for engaging in creative and innovative behavior that is (or could be) protected as intellectual property. Across the interviews, there are common themes that tie together specific notions of progress as related to personal desires as well as public benefits."

Cloned, Cloned Horses, We’ll Ride Them Today (With Profuse Apologies to the Rolling Stones)

The American Quarter Horse is a breed that excels at sprinting over short distances—Quarter Horse races may range from 220 to 870 yards. It is the most popular breed in the United States, and the American Quarter Horse Association (AQHA), headquartered in Amarillo, TX, is the largest horse breed registry in the world. Because of the interest in this breed, Quarter Horses have become the subject of commercial efforts at reproductive cloning. One company, Viagen, has produced over 150 cloned foals. The cloning is achieved via somatic cell nuclear transfer (SCNT), the technique that famously created Dolly the Sheep. As some readers may be aware, Dolly was the focus of In re Roslin Institute (Edinburgh), 750 F.3d 1333 (2014), an important patentable subject matter eligibility case decided by the Federal Circuit last May.

Academic IP Conferences

Aspiring IP scholars sometimes ask me what conferences they should attend, so here is a quick overview of some of the many options. Obviously, no one can (or should) go to all of these—young scholars often face significant budget constraints in addition to needing to reserve lots of time to write. But sharing your writing with the broader community is an essential part of the life of a scholar, and most IP scholars I've met are welcoming and generous (as well as a lot of fun). So pick some conferences that work in terms of location, timing, and topic, and definitely don't overlook the smaller ones, which often lead to the best interactions. Some great websites for general conference updates include Madisonian, Legal Scholarship Blog, and UGA's Calling All Papers.

Labor Mobility and Patenting Propensity

Late last year, I moderated a conference panel in which Thomas Rønde (Copenhagen Business School) presented Does the Mobility of R&D Labor Increase Innovation? I'm glad to see that he and his co-authors, Ulrich Kaiser (Univ. of Zurich) and Hans Christian Kongsted (Copenhagen Business School) have now posted it to SSRN. Here is the abstract:

We investigate the effect of mobility of R&D workers on the total patenting activity of their employers. Our study documents how mobile workers affect the patenting activity of the firm they join and the firm they leave. The effect of labor mobility is strongest if workers join from patent-active firms. We also find evidence of a positive feedback effect on the former employer's patenting from workers who have left for another patent-active firm. Summing up the effects of joining and leaving workers, we show that labor mobility increases the total innovative activity of the new and the old employer. Our study which is based on the population of R&D active Danish firms observed between 1999 and 2004 thus provides firm-level support for the notion that labor mobility stimulates overall innovation of a country or region due to knowledge transfer.

The abstract doesn't really do the paper justice. My comments are after the jump.

Patenting Incentives in Universities

 Dirk Czarnitzki and four coauthors from a variety of institutions have posted Individual Versus Institutional Ownership of University-Discovered Inventions to SSRN. The abstract is short and to the point:

We examine how the ownership of intellectual property rights influences patenting of university-discovered inventions. In 2002, Germany transferred patent rights from faculty members to their universities. To identify the effect on the volume of patenting, we exploit the researcher-level exogeneity of the 2002 policy change using a novel researcher-level panel database that includes a control group not affected by the law change. For professors who had existing industry connections, the policy decreased patenting, but for those without prior industry connections, it increased patenting. Overall, fewer university inventions were patented following the shift from inventor to institutional ownership.

In other words, the authors have used a quasi-experimental event - a change in the law - to see what happens under different legal regimes. They have good data and use it to their benefit: actual patenting by individual researchers, a decent control group that did not experience a change in the law, and information about career and publications to correct for general productivity. I'll discuss the results a bit more after the jump.

Craswell on Shifting Control over Team Nicknames

Due to conference travel, I missed the Stanford Law Review's Festschrift for my wonderful colleague Dick Craswell: Who Knows?: Law in an Information Society. But on the plane I read his latest work, a fun essay titled When Nicknames Were Crowd-Sourced, or, How to Change a Team's Nickname. I recommend it not only for fans of sports history, but also for IP scholars interested in the expansion of what falls under the umbrella of trademark law and publicity rights.

To today's lawyers, it may seem obvious that the owner of a team like the Chicago Cubs has control over and a property interest in the team's nickname. But as Craswell documents, this idea was completely foreign a century ago. In the late 19th and early 20th centuries, teams often had multiple, competing nicknames, typically invented by sportswriters to add color to their stories. Sportswriters used nicknames interchangeably, sometimes in the same headline or sentence. The success of a nickname depended on its popularity with the crowds, not on the team's preference—indeed, many nicknames began as insults. Since that era, however, property rights over nicknames have expanded to include not only exclusive control, but also merchandising rights.

Selections From WIPIP: Remedies Post-Ebay, Public Enforcement of Patent Law, and a Constitutional Basis for the Subject Matter Bar

I spent the last two days enjoying my first visit to the Patent Office in Alexandria, VA and listening to a diverse array of presentations for the 2015 Works in Progress Intellectual Property Colloquium (WIPIP), hosted by the George Washington University Law School and the United States Patent and Trademark Office. Below are recaps and comments on a few talks that I found particularly important, interesting, or provocative. (These are all patent projects for no reason other than that, despite my best efforts, I did not manage to get to a single copyright session.)

What is the Value of the Public Domain?

Paul Heald (Illinois), Martin Kretschmer, and Kris Erickson (both Univ. of Glasgow) have posted The Valuation of Unprotected Works: A Case Study of Public Domain Photographs on Wikipedia. The article is an attempt to value a small slice of the public domain. Here is the abstract:

What is the value of works in the public domain? We study the biographical Wikipedia pages of a large data set of authors, composers, and lyricists to determine whether the public domain status of available images leads to a higher rate of inclusion of illustrated supplementary material and whether such inclusion increases visitorship to individual pages. We attempt to objectively place a value on the body of public domain photographs and illustrations which are used in this global resource. We find that the most historically remote subjects are more likely to have images on their web pages because their biographical life-spans pre-date the existence of in-copyright imagery. We find that the large majority of photos and illustrations used on subject pages were obtained from the public domain, and we estimate their value in terms of costs saved to Wikipedia page builders and in terms of increased traffic corresponding to the inclusion of an image. Then, extrapolating from the characteristics of a random sample of a further 300 Wikipedia pages, we estimate a total value of public domain photographs on Wikipedia of between $246 to $270 million dollars per year.

I think this is a fantastic study. My thoughts follow the jump.

Nguyen on IP as Collateral and the Fed. Cir.'s Overreach into Commercial Law

Xuan-Thao Nguyen (Indiana McKinney) has posted two just-published articles on the role of IP in secured transactions. The first is Financing Innovation: Legal Development of Intellectual Property as Security in Financing, 1845-2014, which describes the development of the use of IP in chattel mortgages, including recent Federal Circuit decisions on whether a secured party of IP collateral becomes the owner after default. She argues that despite new financing mechanisms, small businesses have been struggling to access financing for innovation, and that more attention to this issue is necessary to help the United States maintain its innovative edge. (As Daniel Hemel and I point out in Beyond the Patents-Prizes Debate, one of the main downsides of ex post rewards like patents and prizes over ex ante rewards like grants and R&D tax credits is that ex post rewards require innovators to obtain financing to cover early R&D costs.) In her conclusion, Nguyen notes that "China has embraced a competitive strategy to increase innovation by providing financing based on the intellectual property assets of the business," though she notes that the details of Chinese IP financing is beyond the scope of her current project.

Nguyen's second new article is In the Name of Patent Stewardship: The Federal Circuit's Overreach into Commercial Law, which has harsh words for the Federal Circuit's recent cases on secured transactions and other commercial law issues affecting IP. Here is the abstract:

While the U.S. Court of Appeals for the Federal Circuit has admirably commandeered its stewardship of patent law—Congress bestowed the Federal Circuit with exclusive jurisdiction over patent appeals since 1982—the court has unabashedly extended its reach, unwelcomed, into commercial law. Camouflaged in the name of patent stewardship, the Federal Circuit’s foray into commercial law has yielded unexpected and unjustifiable results. This Article argues that, paradoxically, to maintain its stewardship of patent law, the Federal Circuit should not invoke patent law to rationalize its decisions concerning commercial law, which have dramatically altered established commercial law. This encroachment into commercial law, which is within the provenance of state law, destabilizes federalism causing uncertainty in state law. The Federal Circuit must refrain from encroaching into commercial law as it has no authority to inject itself into state law making.

I haven't delved into these cases in any depth, but I'd be curious to hear the thoughts of other commercial law scholars on these issues.