Intellectual Property

Impact of China’s Generics Push on Innovator Drug Companies

Sherrie Holdman, MJLST Staffer

With a population of 1.42 billion, China presents a large market for both innovator manufacturer and generic drug companies.  Currently, about 95% of marketed drugs are sold by generics. However, many patients in China opt to use more expensive, imported, brand-name drugs.  In an effort to address this problem, China’s State Council has announced its “Opinions Concerning Reforms of Policies to Improve the Supply and Utilization of Generics” to encourage the people of China to use generic drugs early this year.  As a regulatory document, the Opinion shed light on the future direction of China’s generic market.

The Opinion identifies three important suggestions to guide implementation. The first suggestion is to promote research and development of generic drugs in China.  The Opinion proposes a drug list to be compiled that identifies drugs for which generic counterparts don’t exist yet. The Opinion also encourages the government to develop key technologies in manufacturing generics.  The second suggestion aims to improve the quality and efficacy of generic drugs. Generics will only be approved if their quality and efficacy are equivalent to the original drugs.  To facilitate this goal, the State Council proposes speeding up the conformity assessment of quality and efficacy of generic drugs and improving the quality management of generic drugs.  The third suggestion is to provide policy incentives for generics development, including implementation of a tax policy for generic manufacturers. Under this policy, a generic manufacturer, once designated as a “high technology enterprise,” will have a preferential tax rate of 15%, compared to the 25% rate for other companies.  In order to be a “high technology enterprise,” the generic manufacturer will need to meet certain qualifications. Meanwhile, the Opinion encourages patentees to voluntarily grant compulsory licenses to Chinese generic manufacturers when there is “a serious threat to the public health.”  However, despite its long existence in Chinese patent law and regulation, the compulsory licenses are historically rare in practice, partly because of the difficulty in defining what constitutes a “serious threat to the public health.”    

In order to balance the interests of innovator and generic drug companies, the Opinion provides recommendations for strengthening the enforcement of intellectual property rights.  For example, the Opinion proposes establishing an “early warning patent system” to prevent generic manufacturers from infringing on valid patents and thus mitigating the risk of infringement.  Moreover, the State Council proposed to enhance accessibility of innovative drugs, especially imported oncology drugs, by applying no tariffs on imported new drugs. A five-year patent extension for new drugs was also proposed to enhance the intellectual property protection of innovator drugs.

Following the announcements promulgated in the Opinion, on April 25, 2018, China Food and Drug Administration (CFDA) released its “Public Comment Draft of Pharmaceutical Data Exclusivity Implementing Rules (provisional).” The Draft proposes that “innovative new drugs” will enjoy six years of data protection and “innovative therapeutic biologics” will enjoy 12 years of data protection.  By proposing data protection for new drugs, China encourages multinational corporations to include China in international multicenter clinical trials and to concurrently apply for market introduction in China.  Even if the new drug is introduced to China at a later time, the drug will still be entitled to a data protection period (e.g., from one to five years). The public comment period for the Draft was closed on May 31, 2018 and the final rule is expected soon.  

Facing China’s generics push, innovator drug makers can strengthen their IP strategy in numerous ways.  For example, companies should disclose information about the patents in the drug list in a timely manner, making the public and government aware of the patents.  Further, companies should also establish a multi-directional scheme for IP rights protection including not only patent, but also knowhow, trade secret, design, trademark and copyright.


The Music Modernization Act May Limit Big Name Recording Artists’ Leverage in Negotiations with Music Streaming Companies

By: Julia Lisi, MJLST Staffer

Encircled by several supportive recording artists, President Trump signed the Music Modernization Act (“MMA”) into law on October 11, 2018. Supporters laud the MMA as a long overdue update for U.S. copyright law. Federal law governs roughly 75% of recording artists’ compensation, according to some estimates. The federal regulatory scheme for music license fees dates back to 1909, before the advent of music streaming. Though the scheme has been tweaked since 1909, the MMA marks a major regulatory shift to accommodate the large market for music streaming services like Spotify and Apple Music.

Prior to the MMA, streaming services virtually had two options for acquiring music catalogs: (1) either acquire licenses for each individual song or, (2) provide music without licenses and prepare for infringement suits. Apple Music adopted the first strategy and as a result initially suffered from a much leaner music catalog. Spotify went with the second strategy, setting aside funds to weather litigation.

The MMA offers a preexisting mechanism, the mechanical license, on a broader scale. Once the MMA takes full effect, streaming services can receive blanket licenses to entire catalogs of music, all in one transaction. The MMA establishes the Mechanical Licensing Collective (the “Collective”), a board of industry participants, which will set license prices. The MMA is, in part, meant to ensure that more participants in the music industry will be paid for their work. For example, music producers and engineers can expect to receive more compensation under the MMA.

While the MMA may broaden the pool of industry participants who get compensation from streaming, the MMA could weaken big name artists’ bargaining positions with streaming services. Recording artists like Taylor Swift and Adele have struggled to keep their albums off streaming services like Spotify. Swift resisted music streaming based on her conviction that streaming services did not fairly compensate artists, writers, and producers. While Swift may have come to an agreement with Spotify and allowed her albums to be streamed, there are still holdouts. More than two years after its release, Beyoncé’s Lemonade still is not on Spotify.

With the Collective controlling royalty rates, big name artists might not have the holdout power that they wield now. If Swift’s music had been lumped into a collective mechanical license, she may not have had the authority to withdraw or withhold her albums from streaming services. The MMA’s mechanical licenses are compulsory, indicating the lower level of control copyright owners may have. Despite this potential loss of leverage, the MMA is widely supported by artists and industry executives alike. Only time will tell whether the Collective’s set prices will make compensation within the music industry fairer, as proponents suggest.


Counterfeit Products: A Growing Issue for Online Retailers

Caleb Holtz, MJLST Staffer

Two years ago, my girlfriend gave me an Amazon receipt showing she had ordered a really cool jersey from the German national soccer team. I was very excited. Not only had my girlfriend purchased for me a great jersey, but she had also found a reputable, accessible retailer for buying soccer jerseys in the United States. My excitement soon faded however. The jersey was delayed and delayed, and eventually Amazon cancelled the order and issued a refund. It turned out the jersey was sold by a popular counterfeiter hosting products on Amazon’s site through Amazon’s popular “Fulfilled by Amazon” program. Unaware that this existed prior to this experience, my girlfriend had been lured into a false sense of security that she was purchasing something from the world’s largest retailer, rather than from an obscure counterfeiter.

As it turns out, we were far from the only consumers to fall prey to counterfeit goods being sold on Amazon. Per a recent Engadget article discussing the issue, “the Counterfeit Report, an advocacy group that works with brands to detect fake goods, has found around 58,000 counterfeit products on Amazon since May 2016.” Amazon, recognizing that customers are more likely to trust counterfeits sold on its website, set a goal in 2017 to fight counterfeits.

Amazon is hardly the only retailer dealing with counterfeiting issues. The International Trademark Association said that trade in pirated and counterfeited intellectual property accounted for $461 billion in 2013. The Chinese retail giant Alibaba was at one point put on a U.S. anti-counterfeiting blacklist because of the large quantities of counterfeit goods sold on its website. Ebay, Walmart, Sears, and Newegg have also faced allegations of hosting counterfeited products. Importantly, however, for each of the retailers, there are few legal repercussions for merely hosting counterfeit goods. With the exception of a 2008 case against eBay, the aforementioned retailers have largely avoided being found liable for the counterfeit products they aided in selling.

Amazon provides the best blueprint for avoiding liability. Amazon has avoided liability by arguing that while it may host sellers, it is not a seller itself. Fortunately for Amazon, the Federal Circuit agrees that it is not a seller of the counterfeit goods, and therefore cannot be liable for copyright infringement, even if Amazon stored and shipped the products from its own warehouses. Milo & Gabby LLC v. Amazon.com, Inc., 693 Fed.Appx. 879 (Fed. Cir. 2017). As it is merely a marketplace, Amazon can continue avoiding liability so long as it appropriately responds to complaints of intellectual property infringement.

It will be interesting to see how the parties involved handle this counterfeiting issue going forward, especially as the government anticipates counterfeiting business to continue to grow. Online retailers are taking proactive steps to limit the sale of counterfeits on their websites, although those have been far from effective. Some have suggested artificial intelligence holds the key to solving this problem. Wronged intellectual property owners have not given up on forcing a remedy through the judicial system, as can be seen by the lawsuit filed by Daimler against Amazon recently. Finally, some, such as the judge in the Milo & Gabby case, see a legislative approach such as closing the marketplace loophole that allows online retailers to skate by relatively untouched. Unfortunately for consumers, it does not appear like there is an imminent solution to this problem, so it is best to be aware of how to avoid accidentally purchasing a counterfeit.


Copyright Suit Against Rita Ora and Estate of The Notorious B.I.G. Dismissed

Kaylee Kruschke, MJLST Staffer

 

A copyright law suit brought by Abiodun Oyewole, a member of The Last Poets, against Notorious B.I.G., born Christopher Wallace (Biggie), alleging that Biggie’s 1993 song “Party and Bullshit” took parts of Oyewole’s song “When The Revolution Comes,” was dismissed March 8 by Judge Alison J. Nathan, according to Billboard.

The suit was originally filed in 2016 and was also filed against Rita Ora for her use of parts of Biggie’s “Party and Bullshit” in her song “How We Do.” The suit also listed 12 other defendants who were songwriters, producers, and music publishing companies involved with the allegedly infringing songs, according to Billboard.

Oyewole claimed that the portion of his song that was taken was the following: “But until then you know and I know n*****s will party and bullshit and party and bullshit and party and bullshit and party and bullshit and party …,” according to Judge Nathan’s opinion. The lyrics to Biggie’s song at issue are the following: “Dumbing out, just me and my crew I Cause all we want to do is … I Party … and bullshit, and …” The chorus repeats the phrase “party … and bullshit, and … ” nine times, according to the opinion. The relevant lyrics in Ora’s song are: “And party and bullshit I And party and bullshit I And party and bullshit I And party, and party.” The opinion states that in addition to Oyewole claiming these lyrics were copied, Oyewole also alleges that the songs copy his sound hook.

Canoe states that Oyewole had originally planned to pursue a claim against Biggie before Biggie was murdered in 1997, and subsequently did not feel comfortable going after Biggie’s wife or mother.  But, according to Canoe, Oyewole decided to take action once Ora’s song came out in 2012.

According to Judge Nathan’s opinion, Oyewole failed to adequately serve a number of the defendants, and the ones he did adequately serve, their use fell under the fair use doctrine of copyright law.

There are four main factors the court considered when determining fair use:

 

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and ( 4) the effect of the use upon the potential market for or value of the copyrighted work.

 

As for the first factor, the opinion stated that the use of Oyewole’s song by Biggie and Ora was transformative in that the purpose for the phrase “party and bullshit” in Oyewole’s song was condemnation and the purpose in the allegedly infringing songs was glorification, and this factor weighed in favor of fair use.

With the second factor, the opinion stated that Oyewole’s song was a creative work, which means that this would weigh against fair use, but the song was published, which is a fact that weighs in favor of fair use. This factor ultimately weighed in favor of fair use.

For the third factor, the opinion states that the phrase “Party and bullshit” was not essential to the message Oyewole was conveying in his song, so this favor also weighed in favor of fair use.

With the last factor, the opinion states that the songs by Ora and Biggie are not likely to “usurp” the market for Oyewole’s song because the works are so different in purpose and character and have different audiences. This factor also weighed in favor of fair use, making all four factors favoring Biggie and Ora and leading to Judge Nathan dismissing the case.

According to Billboard, the attorneys for the Estate of The Notorious B.I.G. released the following statements the day after the opinion was filed, also the 21st anniversary of Biggie’s death: “This is a well-earned victory for the Estate, and it seems like a message from Christopher to receive it on the anniversary of his passing,” said Nixon Peabody attorney Julian Petty, who represented the B.I.G. estate. “We’re honored to represent a client who is willing to fight and defend such an important legacy.”


USPTO Denies Beyoncé’s Attempt to Trademark Her Daughter’s Name … Again

MJLST Staffer, Tiffany Saez

In January 2016, Beyoncé’s trademark holding company, BGK Trademark Holdings, filed an application to register the name of the singer’s first child, “BLUE IVY CARTER,” in 14 different trademark classes, covering everything from fragrances to postcards to online video games. In May 2017, however, a Boston-based event planning firm, also named Blue Ivy, filed a notice of opposition with the US Patent and Trademark Office (USPTO) Trademark Trial and Appeal Board (TTAB) to challenge BGK’s trademark application.

Blue Ivy alleges, among other things that, BGK Trademark Holdings has no bonafide intent to use the BLUE IVY CARTER mark in commerce and that BGK is attempting to commit fraud on the USPTO by registering a trademark which it doesn’t intend on ever using.

Although Blue Ivy’s founder, Veronica Morales, already owns U.S. Trademark Registration No. 4224833, covering the standard character mark BLUE IVY for event planning and management services, Morales’ rights to Blue Ivy does not necessarily prevent Beyoncé from securing trademark rights in or a federal registration for BLUE IVY CARTER for goods or services that are not related to those covered by Morales’ mark. Trademark rights are jurisdictional. That is, the owner of a trademark owns it in the geographic region in which it is in use. Trademarks also do not apply to all goods and services worldwide, and instead apply only to the specific goods or services on which it is being used in commerce. Therefore, Morales does not have rights to the BLUE IVY mark for all goods and services, just event planning services.

The Blue Ivy trademark saga, however, does not mark the first time that a celebrity has tried to trademark a name or phrase.

In the United States, one’s name and likeness is generally protected through doctrines that rise out of common law or statute, such as the right of publicity or privacy. However, there are cases in which celebrities or other public figures might seek to protect their names under trademark in order to protect the financial integrity and use of their personal name in commercial activities. The USPTO’s website also notes that, one who attempts to register a trademark that includes one’s name, portrait, or signature (that could reasonably be perceived as that of a particular living individual) would need written consent from the identified individual in order to register the mark.

There are several types of trademarks (e.g., slogans, words, logos, phrases), but the essential function of a trademark is to exclusively identify the commercial origin of goods and services. The use of personal names can be registered as a trademark if the individual can establish that their name contains “secondary meaning,” also known as “acquired distinctiveness.” Secondary meaning is required when your mark is “descriptive,” but not “inherently distinctive” or “generic.” Secondary meaning is very fact-specific. Whether the mark in question has secondary meaning would therefore hinge on whether it has become closely associated with a particular good or service. Thus, in the Blue Ivy case, one’s personal name can acquire trademark protection if the public at large has identified the name with certain products or services.

Even though proof of secondary meaning is not always required, one’s own celebrity status or public persona is generally not enough to confer trademark protection upon a name. The name itself actually has to be associated with certain goods or services. This requirement may be problematic for those who endorse a particular product or intend on developing their own brand of goods, such as clothing.

It is highly unlikely that the general public has identified and closely associated the name of Beyoncé’s six-year-old daughter with certain goods, such as radio pagers. Yet Beyoncé is seeking trademark to prevent others from exploiting and cashing in on little Blue Ivy’s name.


Fi-ARRR-e & Fury: Why Even Reading the Pirated Copy of Michael Wolff’s New Book Is Probably Copyright Infringement

By Tim Joyce, MJLST EIC-Emeritus

 

THE SITUATION

Lately I’ve seen several Facebook links to a pirated copy of Fire & Fury: Inside the Trump White House, the juicy Michael Wolff expose documenting the first nine months of the President’s tenure. The book reportedly gives deep, behind-the-scenes perspectives on many of Mr. Trump’s most controversial actions, including firing James Comey and accusing President Obama of wiretapping Trump Tower.

 

It was therefore not surprising when Trump lawyers slapped a cease & desist letter on Wolff and his publisher. While there are probably volumes yet to be written about the merits of those claims (in my humble opinion: “sorry, bros, that’s not how defamation of a public figure works”), this blog post deals with the copyright implications of sharing and reading the pirated copy of the book, and the ethical quandaries it creates. I’ll start with the straightforward part.

 

THE APPLICABLE LAW

First, it should almost go without saying that the person who initially created the PDF copy of the 300+ page book broke the law. (Full disclosure: I did click on the Google link, but only to verify that it was indeed the book and not just a cover page. It was. Even including the page with copyright information!) I’ll briefly connect the dots for any copyright-novices reading along:

 

    • Wolff is the “author” of the book, a “literary work” that constitutes an “original works of authorship fixed in any tangible medium of expression” [see 17 USC 102’].
    • As the author, one of his copyrights is to control … well … copying. The US Code calls that “reproduction” [see 17 USC 106].
    • He also gets exclusive right to “display” the literary work “by means of a film, slide, television image, or any other device or process” [see 17 USC 101]. Basically, he controls display in any medium like, say, via a Google Drive folder.
    • Unauthorized reproduction, display, and/or distribution is called “infringement” [see 17 USC 501]. There are several specific exceptions carved into the copyright code for different types of creative works, uses, audiences, and other situations. But this doesn’t fall into one of those exceptions.

 

  • So, the anonymous infringer has broken the law.

 

  • [It’s not clear, yet, whether this person is also a criminal under 17 USC 506, because I haven’t seen any evidence of fraudulent intent or acting “for purposes of commercial advantage or private financial gain.”]

 

Next, anyone who downloads a copy of the book onto their smartphone or laptop is also an infringer. The same analysis applies as above, only with a different starting point. The underlying material’s copyright is still held by Wolff as the author. Downloading creates a “reproduction,” which is still unauthorized by the copyright owner. Unauthorized exercise of rights held exclusively by the author + no applicable exceptions = infringement.

 

Third, I found myself stuck as to whether I, as a person who had intentionally clicked through into the Google Drive hosting the PDF file, had also technically violated copyright law. Here, I hadn’t downloaded, but merely clicked the link which launched the PDF in a new Chrome tab. The issue I got hung up on was whether that had created a “copy,” that is a “material objects … in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” [17 USC 101]

 

Computer reproductions are tricky, in part because US courts lately haven’t exactly given clear guidance on the matter. (Because I was curious — In Europe and the UK, it seems like there’s an exception for temporary virtual copies, but only when incidental to lawful uses.) There’s some debate as to whether it’s infringement if only the computer is reading the file, and for a purpose different than perceiving the artistic expression. (You may remember the Google Books cases…) However, when it’s humans doing the reading, that “purpose of the copying” argument seems to fall by the wayside.

 

Cases like  Cartoon Network v. CSC Holdings have attempted to solve the problem of temporary copies (as when a new browser window opens), but the outcome there (i.e., temporary copies = ok) was based in part on the fact that the streaming service being sued had the right to air the media in question. Their copy-making was merely for the purposes of increasing speed and reducing buffering for their paid subscribers. Here, where the right to distribute the work is decidedly absent, the outcome seems like it should be the opposite. There may be a case out there that deals squarely with this situation, but it’s been awhile since copyright class (yay, graduation!) and I don’t have free access to Westlaw anymore. It’s the best I could do in an afternoon.

 

Of course, an efficient solution here would be to first crack down on the entities and individuals that first make the infringement possible – ISPs and content distributors. The Digital Millennium Copyright Act already gives copyright owners a process to make Facebook take bootleg copies of their stuff down. But that only solves half the problem, in my opinion. We have to reconcile our individual ethics of infringement too.

 

ETHICAL ISSUES, FOR ARTISTS IN PARTICULAR

One of the more troubling aspects of this pirateering that I saw was that the link-shares came from people who make their living in the arts. These are the folks who–rightly, in my opinion–rail against potential “employers” offering “exposure” instead of cold hard cash when they agree to perform. To expect to be paid for your art, while at the same time sharing an illegal copy of someone else’s, is logically inconsistent to me.

 

As a former theater actor and director (read: professional almost-broke person) myself, I can understand the desire to save a few dollars by reading the pirated copy. The economics of making a living performing are tough – often you agree to take certain very-low-paying artistic jobs as loss-leaders toward future jobs. But I have only met a very few of us willing to perform for free, and even fewer who would tolerate rehearsing with the promise of pay only to be stiffed after the performance is done. That’s essentially what’s happening when folks share this bootleg copy of Michael Wolff’s book.

 

I’ve heard some relativistic views on the matter, saying that THIS book containing THIS information is so important NOW, that a little infringement shouldn’t matter. But you could argue that Hamilton, the hit musical about the founding of our nation and government, has equally urgent messages regarding democracy, totalitarianism, individual rights, etc. Should anyone, therefore, be allowed to just walk into the theater and see the show without paying? Should the cast be forced to continue performing even when there is no longer ticket revenue flowing to pay for their efforts? I say that in order to protect justice at all times, we have to protect justice this time.

 

tl;dr

Creating, downloading, and possibly even just viewing the bootleg copy of Michael Wolff’s book linking around Facebook is copyright infringement. We cannot violate this author’s rights now if we expect to have our artistic rights protected tomorrow.

 

Contact Me!

These were just some quick thoughts, and I’m sure there’s more to say on the matter. If you’d like to discuss any copyright issues further, I’m all ears.


Made in China: How IP Theft Became a Norm in China

Tiffany Saez, MJLST Staffer

 

While discussions regarding North Korea and trade have comprised much of President Trump’s tour around Asia insofar, the President has yet to arrive in China – China is the third stop of his Asia tour. This has left many speculating as to what will result from the President’s visit to Beijing. This may be since Trump advocated a stronger stance against China during his campaign and has taken no significant action with respect to China’s economic policies during his presidency.

 

In light of the President’s visit, however, some are already urging him to crack down on China’s human rights violations. Others are asking President Trump to confront China about North Korea’s nuclear threats. China’s rampant intellectual property theft is one issue that has long been overlooked by political agendas but deserves more attention. IP theft by China continues to present a serious threat to the US economy. Annual cost currently exceed $225 billion in counterfeit goods, pirated software, and theft of trade secrets; this figure is expected to reach $600 billion.

 

Chinese IP theft has slowly made its way into the spotlight following the release of the HiPhone in 2008. The HiPhone is a cheap Chinese knock-off of Apple’s iPhone. The HiPhone was just the beginning of a series of IP disputes between China and both American and European businesses. Many businesses have accused Chinese nationals of illegally reproducing their creations and then misleading consumers into thinking that they are purchasing authentic products.

 

With a weak IP regime that has done little to curb a growing copycat culture among Chinese businesses and individuals alike, it is no wonder that China has become the leading country for IP theft. The Chinese intellectual property and manufacturing policies in place are largely to blame for the increase in IP theft.

 

Boasting a population of 1.38 billion, China has become one of the world’s largest markets for companies looking to expand their marketplace. The country is not only full of potential consumers but it has also demonstrated its ability as a manufacturing powerhouse. Doing business in China, however, has proven to be rather problematic since a stake in one of China’s industries often entails a trade-off in terms of technology. That is because foreign firms that wish to do business in one of China’s industries are required to enter into joint ventures with local partners or share their technologies with the state’s regulatory agencies. Such partnerships often lead to IP theft by Chinese companies

 

The United States’ intellectual property disputes with China represent only a fraction of a much larger debate over IP rights in the global context. Proponents of IP rights insist that stronger rights are needed to foster innovation and encourage individuals to participate in research and development by ensuring they will be economically rewarded for their contributions. Meanwhile critics of stronger IP rights argue that such rights favor wealthier countries over developing ones. Even so, US companies, such as Apple and IBM, – who are often the first to be impacted by Chinese IP theft – are hoping that the Trump administration will capitalize on the trip to Beijing and finally take stronger measures against China’s lax IP laws.


Apple Faces Trademark Lawsuit Regarding its iPhone X Animoji Feature

Kaylee Kruschke, MJLST Staffer

 

The Japanese company, emonster k.k., sued Apple in the U.S. on Wednesday, Oct. 18, 2017, claiming that Apple infringed emoster’s Animoji trademark with the iPhone X Animoji feature.

 

But first, what even is an Animoji? According it a Time article, an Animoji is an animal emoji that you can control with your face, and send to your friends. You simply pick an emoji, point the camera at your face, and speak. The Animoji captures your facial expression and voice. However, this technology has yet to reach consumer hands. Apple’s website says that the iPhone X, with the Animoji feature, will be available for preorder on Oct. 27, and will be available for purchase Nov. 3.

 

So why is Apple being sued over this? Well, it’s not the actual technology that’s at issue. It’s the name Animoji. emonster’s complaint states that Enrique Bonansea created the Animoji app in 2014. This app allowed users to customize moving text and images and send them in messages. The United States Patent and Trademark Office registered Animoji to Bonansea on March 31, 2015, who later assigned the trademark to emoster in Aug. 2017, according to the complaint. Bonansea also claims that he received requests from companies, that he believes were fronts for Apple, to sell the trademark in Animoji. But these requests were denied, according to the complaint.

 

The complaint also provides more information that sheds light on the fact that Apple probably knew it was infringing emonster’s trademark in Animoji. The day before Apple announced its iPhone X and the Animoji feature, Apple filed a petition with the United States Patent and Trademark Office requesting that the office cancel the Animoji trademark because emonster, Inc. didn’t exist at the time of the application for the trademark. This was a simple mistake and the paperwork should have said emonster k.k. instead of emonster, Inc.; emonster was unable to fix the error because the cancellation proceeding was already pending. To be safe, emonster applied again for registration of the trademark Animoji in Sept. 2017, but this time under the correct name, emonster k.k..

 

Additionally, Apple knew about emonster’s app because it was available on the Apple App Store. Apple also helped emonster remove apps that infringed emonster’s trademark, the complaint stated. Nevertheless, Apple still went forward with using Animoji as the name for it’s new technology.

 

The complaint also alleges that emonster did send Apple a cease-and-desist letter, but Apple continued to use name Animoji for its new technology. emonster requests that Apple be enjoined from using the name Animoji, and claims that it is also entitled to recover Apple’s profits from using the name, any ascertainable damages emonster has, and the costs emonster incurs from the suit.

 

It’s unclear what this means for Apple and the release of the iPhone X, which is in the very near future. At this time, Apple has yet to comment on the lawsuit.


Tribal Sovereign Immunity May Shield Pharmaceutical Patent Owner from PTAB Inter Partes Review

Brenden Hoffman, MJLST Staffer

 

The Eleventh Amendment to the United States Constitution provides for State Sovereign Immunity, stating: “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”   Earlier this year, the Patent Trial and Appeals Board dismissed three Inter Partes Review proceedings against the University of Florida, based on their claim of State Sovereign Immunity. See Covidien LP v. University of Florida Research Foundation Inc., Case Nos. IPR 2016-01274; -01275, and -01276 (PTAB January 25, 2017).

Early last month, the pharmaceutical company Allergan announced that it had transferred its patent rights for the blockbuster drug Restasis to the Saint Regis Mohawk Tribe. Restasis is Allergan’s second most profitable drug (Botox is the first), netting $336.4 million in the second quarter of 2017.  Under this agreement, this tribe was paid $13.75 Million initially and will receive $15 Million in annual royalties for every year that the patents remain valid. Bob Bailey, Allergan’s Executive VP and Chief Legal Officer, indicated that they were approached by the St. Regis tribe and believe that tribal sovereign immunity should shield the patents from pending IPRs, stating “The Saint Regis Mohawk Tribe and its counsel approached Allergan with a sophisticated opportunity to strengthen the defense of our RESTASIS® intellectual property in the upcoming inter partes review proceedings before the Patent Trial and Appeal Board… Allergan evaluated this approach closely, with expert counsel in patent and sovereign immunity law. This included a thorough review of recent case law such as Covidien LP v. University of Florida Research Foundation Inc. and Neochord, Inc. v. University of Maryland, in which the PTAB dismissed IPR proceedings against the universities based upon their claims of sovereign immunity.”

IPRs are highly controversial.  The United States Supreme Court recently granted cert. in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC  to determine “whether inter partes review, an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents, violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.” Until this issue is resolved, IPRs will continue to be by companies such as Allergan seeking to protect their patent rights.  Over the past few years, hedge fund manager Kyle Bass made headlines as a “reverse troll,” by filing IPRs against pharmaceutical companies while simultaneously shorting their stocks. Bailey has stated that “the IPR process has been a thorn in our side…We get a call from reverse trolls on a regular basis. Now we have an alternative.” This move has been well regarded by many critical of IPRs, including an October 9, 2017 post on ipwatchdog.com titled “Native Americans Set to Save the Patent System.”  In addition, the St. Regis Mohawk tribe has indicated that these types of arrangements can help the tribe generate much-needed capital for housing, education, healthcare and welfare, without requiring the tribe to give up any land or money.

However, this arrangement between Allergan and the St. Regis Mohawk tribe has attracted strong criticism from others.  Mylan Pharmaceuticals, a party in the IPR proceedings challenging multiple Allergan patents on Restasis, has called this transfer a “sham” and made comparisons to racketeering cases with lending fraud.  “Allergan Pulls a Fast One” on the Science Translational Medicine Blog states, “‘The validity of your patents is subject to review, unless you pay off some Indian tribe’ does not seem like a good way to run an intellectual property system,” this is a “slimy legal trick,” and “this deal smells.” He suggests that “legal loopholes” like this sully the whole pharmaceutical industry look bad and that this will force Congress to take action.  

In fact, U.S. Senator Claire McCaskill, the top-ranking Democrat on the Homeland Security and Governmental Affairs Committee, has already written a letter to the Pharmaceutical Research and Manufacturers of America urging  them to review “whether the recent actions Allergan has taken are consistent with the mission of your organization.”  She believes that “This is one of the most brazen and absurd loopholes I’ve ever seen, and it should be illegal…PhRMA can and should play a role in telling its members that this action isn’t appropriate, and I hope they do that.”  On October 5, 2017, McCaskill introduced a bill to the Senate “To abrogate the sovereign immunity of Indian tribes as a defense in inter partes review of patents.”


Mechanical Curation: Spotify, Archillect, Algorithms, and AI

Jon Watkins, MJLST Staffer

 

A great deal of attention has been paid recently to artificial intelligence. This CGPGrey YouTube video is typical of much modern thought on artificial intelligence. The technology is incredibly exciting- until it threatens your job. This train of thought has led many, including the video above, to search for kinds of jobs which are unavoidably “human,” and thereby safe.

 

However, any feeling of safety that lends may be illusory. AI programs like Emily Howell, which composes sheet music, and Botnik, which writes jokes and articles, are widespread at this point. What these programs produce is increasingly indistinguishable from human-created content- not to mention increasingly innovative. Take, as another example, Harold Cohen’s comment on his AARON drawing program: “[AARON] generates objects that hold their own more than adequately, in human terms, in any gathering of similar, but human-produced, objects. . . It constitutes an existence proof of the power of machines to do some of the things we had assumed required thought. . . and creativity, and self-awareness.”

 

Thinking about what these machines create brings up more questions than answers. At what point is a program independent from its creator? Is any given “AI” actually creating works by itself, or is the author of the AI creating works through a proxy? The answer to these questions are enormously important, and any satisfying answer must have both legal and technical components.

 

To make the scope of these questions more manageable, let’s limit ourselves to one specific subset of creative work- a subset which is absolutely filled with “AI” at the moment- curation. Curation is the process of sorting through masses of art, music, or writing for the content that might be worth something to you. Curators have likely been around as long as humans have been collecting things, but up until recently they’ve been human. In the digital era, most people likely carry a dozen curators in their pocket. From Spotify and Pandora’s predictions of the music you might like, to Archillect’s AI mood board, to Facebook’s “People You May Know”, content curation is huge.

 

First, the legal issues. Curated collections are eligible for copyright protection, as long as they exhibit some “minimal degree of creativity.” Feist v. Rural Telephone Co., 499 U.S. 340, 345 (1991). However, as a recent monkey debacle clarified, only human authors are protected by copyright. This is implied by § 102 of the Copyright Act, which states in part that copyright protection subsists “in original works of authorship.” Works of authorship are created by authors, and authors are human. Therefore, at least legally, the author of the AI may be creating works through a proxy. However, as in the monkey case above, some courts may find there is no copyright-eligible author at all. If neither a monkey, nor a human who provides the monkey with creative tools is an author, is a human who provides a computer with creative tools an author? Goldstein v. California, a 1973 Supreme Court case, has been interpreted as standing for the proposition that computer-generated work must include “significant input from an author or user” to be copyright eligible. Does that decision need to be updated for a different era of computers?

 

The answer to this question is where a technical discussion may be helpful, because the answer may involve a simple spectrum of independence.

 

On one end of the spectrum is algorithmic curation which is deeply connected to decisions made by the algorithm’s programmer. If a programmer at Spotify writes a program which recommends I listen to certain songs, because those songs are written by artists I have a history of listening to, the end result (the recommendation) is only separated by two or three steps from the programmer. The programmer creates a rigid set of rules, which the computer implements. This seems to be no less a human work of authorship than a book written on a typewriter. Just as a programmer is separated from the end result by the program, a writer may be separated from the end result by various machinery within the typewriter. The wishes of both the programmer and the writer are carried out fairly directly, and the end results are undoubtedly human works of authorship.

 

More complex AI, however, is often more independent. Take for example Archillect, whose creator stated in an interview “It’s not reflecting my taste anymore . . .I’d say 60 percent of the things [she posts] are not things that I would like and share.” The process involved in Archillect, as described in the same interview, is much more complex than the simple Spotify program outlined above- “Deploying a network of bots that crawl Tumblr, Flickr, 500px, and other image-heavy sites, Archillect hunts for keywords and metadata that she likes, and posts the most promising results. . .  her whole method of curation is based on the relative popularity of her different posts.”

 

While its author undoubtedly influenced Archillect through various programming decisions (which sites to set up bots for, frequency of posts, broad themes), much of what Archillect does is what we would characterize as judgement calls if a human were doing the work. Deeply artistic questions like “does this fit into the theme I’m shooting for?” or “is this the type of content that will be well-received by my target audience?” are being asked and answered solely by Archillect, and are answered- as seen above- differently from how Archillect’s creator would answer them.

Even closer to the “independent” end of the spectrum, however, even more complex attempts at machine curation exist. This set of programs includes some of Google’s experiments, which attempt to make a better curator by employing cutting-edge machine learning technology. This attempt comes from the same company which recently used machine learning to create an AI which taught itself to walk with very little programmer interaction. If the same approaches to AI are shared between the experiments, Google’s attempts at creating a curation AI might result in software more independent (and possibly more worthy of the title of author) than any software yet.