Original news and analysis on international IP policy
The US government shutdown is now in its second week, causing more and more of the country’s intellectual property regime to grind to a halt. The shutdown’s effects also are rippling overseas, hindering US efforts to negotiate two major international trade deals containing significant IP provisions.
Patent assertion entities in the United States have done well from software patents. These companies, which some call “patent trolls,” have garnered a clear majority of their revenues by licensing software patents and suing those who refuse to purchase licences. But these companies’ reliance on software patents may be coming to an end. In recent years, these companies are increasingly exploiting business method patents, and by doing so are targeting a much larger range of businesses, according to a recently released study.
The United States is in a muddle over standard-essential patents. The nation’s courts and its executive agencies all agree that these patents play vital roles in the economy, but they disagree about what remedies are available when these patents are infringed. A recent decision by the US International Trade Commission has added to the confusion.
Last Thursday, the United States Supreme Court overturned more than 30 years of precedents and ruled that isolated genes cannot be patented. They are products of nature and thus not patent-eligible subject matter, the court unanimously held in Assoc. for Molecular Pathology v. Myriad Genetics, Inc. This ruling puts the US at odds with most other nations, which allow genes to be patented. But because other major nations grant narrower gene patents, the net effect of Myriad will be to shift the US position on gene patents closer to that of other nations.
What inventions are eligible for patent protection? That question has roiled the US legal system for the last decade. But the Federal Circuit Court of Appeals (often called the nation’s patent court) was supposedly riding to the rescue. The court’s eagerly-awaited en banc decision in CLS Bank Int’l v. Alice Corp. [pdf] was widely expected to clarify the patentability of computer-related inventions, which play a vital role in the US economy. Unfortunately, instead of clarifying the law, the court’s 10 May ruling increased the confusion, casting doubt on more than 300,000 patents - including one-fifth of all patents issued last year.
Prior to 15 April, most experts had expected the United States Supreme Court to rule in Association for Molecular Pathology v. Myriad Genetics that genes cannot be patented. The oral argument on that date strengthened this consensus opinion, but also suggested that the court would issue a narrow decision which would allow many types of gene-related patents. Should this happen, the US would move significantly closer to other countries’ rules for gene patents, but the US would continue to have problems limiting patent rights in order to protect the public interest.
Today, the United States Supreme Court handed US copyright owners a stinging defeat. The decision in Kirtsaeng v. John Wiley & Sons dramatically slashes the ability of US copyright owners to control copies of their works. And in so doing, the 6-3 decision blows a huge hole in the global marketing strategy of movie, TV, book and software companies.
On 25 February, the US opened a new front in its war against online copyright infringement. Five of the nation’s biggest internet service providers (ISPs) joined with the movie and music industries to launch the Copyright Alert System, a new means of attacking unauthorised file-sharing. This ISP-based enforcement system is similar to efforts in at least seven other industrialised countries. Some of these efforts have apparently slashed unauthorised file-sharing, which suggests the US system will be similarly successful. It is unclear, however, if the US system (or any of the other countries’ systems) will succeed in their ultimate goal - boosting revenues for the movie and music industries.
It has become routine for companies to outsource many business functions. Human resources, customer service, accounting, manufacturing of components - all have been outsourced. Now, however, a growing number of US businesses are outsourcing something new: patent licensing. And this outsourcing may hurt both the US economy and its patent system.
Intellectual property owners in the United States may be happy to see the end of 2012. Among the notable setbacks they suffered last year: Congress refused to expand remedies against online infringement, the Supreme Court raised the bar for patentable inventions, and lower courts repeatedly denied injunctions against patent infringement. It is unclear, however, if IP owners will fare better in 2013.