Category: Patents & Technology

By: Aarthi S. Anand Before striking down laws increasing copyright’s domain, judges and legislators are asking for evidence that information products will be created even if copyright protection is not provided. The future of Internet technology depends on locating this evidence in time to limit expansive copyright. United States law, however, already protects information products under copyright. Hence, this counterfactual evidence that judges request cannot be generated in the United States. In response to the demand for data, American legal scholars have attempted to mine evidence from open software and other non-commercial endeavors on the Internet. However, these endeavors have been dismissed as exceptions or “cults,” unrelated to mainstream industry needs. This Article, for the first time, provides evidence of growth in the commercial software industry without intellectual property protection. Between 1993 and 2010, the software industry in India emerged as the fastest growing in the world, accounting for $76 billion in revenues by 2010. In the same time period, the software industry in India remained unaffected by changes in intellectual property protection for software. By demonstrating industry growth without strong intellectual property protections, the Indian data fills the critical gap in American literature. Moreover, the comparative data from India

By: James Boyle This Article explores the difficulties that high technology markets pose for patent law and, in particular, for patent injunctions. It then outlines the ways in which “open source innovation” is unusually vulnerable to patent injunctions. It argues that courts can recognize this vulnerability, and respond to the particular competitive and innovative benefits of open source innovation, by flexibly applying the Supreme Court’s ruling in eBay v. MercExchange. Having dealt with the lamentable failure of the International Trade Commission to exercise a similar flexibility in its own patent jurisprudence, despite statutory and constitutional provisions that counsel otherwise, the Article concludes with some recommendations for reform. Download Full Article (PDF) Cite: 11 Duke L. & Tech. Rev. 30

By: Roy J. Epstein The 2011 decision by the Federal Circuit in Uniloc v. Microsoft properly condemned the “25% Rule,” which bases a reasonable royalty on 25% of an infringer’s profits. Nonetheless, at least one proponent of the Rule continues to argue that the Rule is fundamentally valid and should remain in use. This article analyzes the historical development of the Rule, its conceptual basis, its application in actual cases, and relevant insights from other recent Federal Circuit cases. Each analysis shows fundamental problems and contradictions that demonstrate the Rule can never be a reliable patent damages methodology. There is no reason to change the conclusion in Uniloc. Download Full Article (PDF) Cite: 2012 Duke L. & Tech. Rev. 001

By: David M. Longo Ph.D. & Ryan P. O’Quinn Ph.D. A classic property rights question looms large in the field of patent law: where do the rights of inventors end and the rights of the public begin? The right of inventors to modify the scope of their claimed inventions, even after the patent issues, is in direct tension with the concepts of public notice and the public domain. The Patent Act currently permits broadening of claims so long as a reissue application demonstrating intent to broaden is filed within two years of the original patent issue. Over the years, however, this relatively straightforward statutory provision has sparked numerous disputes over its meaning and application. On September 8, 2011, the Court of Appeals for the Federal Circuit heard oral arguments or In re Staats. In this case, Apple Computer, Inc. appeals the rejection of a continuation reissue patent application. The U.S. Patent & Trademark Office and the Board of Patent Appeals and Interferences rejected the application on the grounds that Apple attempted to broaden the scope of its patent claims in a manner not “foreseeable” more than eight years after the patent first issued. Apple contends that the language of the

By: Robert Goldscheider Fifty years ago, Robert Goldscheider helped pioneer the use of a methodology known as “the 25% Rule,” a tool for determining reasonable royalties in intellectual property licensing negotiations. The Rule holds that licensees of intellectual property normally deserve the lion’s share of the profit because they usually bear the bulk of the business risk associated with bringing the intellectual property to market. Experts familiar with the art of intellectual property licensing frequently rely on the 25% Rule to rationally determine reasonable royalties in litigation and transactional settings. The Rule’s prominence has been accompanied by unfortunate misunderstandings about its form and substance. It is not, as some suggest, intended to be a simple shortcut to determine patent royalties. Rather, it was developed as, and remains, a meticulous methodology inspired by significant private transactions and ultimately refined by brilliant judicial interpretation. As such, it is inappropriate to condescendingly diminish it to a mere “rule of thumb.” When properly understood and applied, the Classic 25% Rule is an effective discipline that achieves the high standards of reliability demanded by the U.S. Supreme Court in the Daubert. Download Full Article (PDF) Cite: 2011 Duke L. & Tech. Rev. 006

By: Hillary Greene The ability of intellectual property owners to earn monopoly rents and the inability of horizontal competitors to price fix legally are two propositions that are often taken as givens.  This iBrief challenges the wholesale adoption of either proposition within the context of buyer price-fixing in intellectual property markets.  More specifically, it examines antitrust law’s role in protecting patent holders’ rents through its condemnation of otherwise ostensibly efficient buyer price fixing. Using basic economic analysis, this iBrief refines the legal standards applicable at this point of intersection between antitrust and patent law.  In particular, the author recommends the limited abandonment of per se condemnation of buyer price-fixing within pure intellectual property contexts.  As an alternative, a coarse screen which accounts for both price and innovation effects is proposed. This recommendation represents one example of how antitrust law can better account for the complicated and imperfectly understood effects of the patent system on social welfare. Download Full Article (PDF) Cite: 2011 Duke L. & Tech. Rev. 004

By: Jonathan Hillel “Patent ambush” describes certain rent-seeking behavior by the owner of patent rights to a technology that is essential to an industry standard. Two cases, Qualcomm and Rambus, represent attempts of the Third and D.C. Circuits, respectively, to address patent ambushes using federal antitrust statutes. In both cases, antitrust law proves inadequate to the task. Under Qualcomm, licensees gain too much power to extort undervalued royalty rates from patent holders who have disclosed their rights during standard-setting. Under Rambus, coupled with the dearth of other options to combat patent ambushes, non-disclosing patent holders are given free reign over standardized markets, to the detriment of end-users. This iBrief argues that the flaws in each rule inhere from a fundamental inadequacy of antitrust law to address patent ambush. Download Full Article (PDF) Cite: 2010 Duke L. & Tech. Rev. 017

By: Marc L. Roark Apple’s success with the Apple iPhone has brought with it certain problems. Its success has engendered a community that has attempted to circumvent Apple’s exclusive service agreement with AT&T. Unfortunately for Apple (and similarly situated manufacturers), intellectual property law allows consumers to alter their products so as to circumvent relationships that manufacturers may have with others. The patent and copyright law first sale doctrine allows consumers to manipulate a product after it is purchased. As a result, manufacturers are increasingly turning to alternatives to intellectual property to secure control over the device after the sale. One such alternative is the exclusion of warranty under Article 2 of the Uniform Commercial Code. This iBrief considers whether limitation of warranties have the deterrence effect manufacturers desire. Said differently, it considers whether manufacturers can use warranty limitations to prevent consumers from using their products in an unauthorized manner. The iBrief presents a behavioral model based on the Triandis model of planned behavior and enhances the model by accounting for likely and unlikely benefits and detriments. The model suggests that participants weigh the probability and magnitude of the detriment against the probability and magnitude of the beneficial impact when making

By: Eric Lane The recent rise of non-practicing patentees (NPPs) in the clean technology space comes at a time when the international community is debating the role of intellectual property rights in the deployment and implementation of technologies to combat climate change. While the impact of intellectual property rights on the deployment of clean technology has been studied, less attention has been given to the role intellectual property regimes play in maintaining the operation of those technologies already deployed in the fight against global warming. This iBrief focuses on clean technologies that have already achieved substantial market penetration and observes that recent trends in patent law are, to a large extent, allowing those technologies to continue working to reduce carbon emissions. Specifically, the course correction in the law of patent injunctions brought about by eBay v. MercExchange and the endorsement of court-imposed ongoing royalty payments in Paice v. Toyota demonstrate an important shift in patent law that is tempering the impact of clean tech NPPs in Title 35 infringement actions in federal courts. However, these trends have caused a tactical adjustment by clean tech NPPs—namely, filing suits in the U.S. International Trade Commission (ITC), where the remedy of an exclusion

By: Matthew Moore In order for a hopeful applicant to be granted a patent over his invention, his application must satisfy several procedural and substantive requirements. Among the substantive hurdles that an applicant must clear is the mandate that patents only be issued to applications claiming statutory subject matter within the meaning of §101 of the Patent Act. However, the Court of Appeals for the Federal Circuit (Federal Circuit) has not construed that Section consistently over the years. Since that court’s formation in 1982, it has espoused two tests for statutory subject matter, and each time has substantially abrogated, if not overruled, the prior formulation. Most recently, the Federal Circuit has handed down the “machine-or-transformation” test in an attempt to redraft the limits of patent eligibility based on subject matter. This iBrief will explore the significant changes that this new test has brought to the patentability doctrine. Download Full Article (PDF) Cite: 2010 Duke L. & Tech. Rev. 005