Tuesday, December 11, 2012

IPO PTO Day: Copyright infringement via patent application

Ethics: Copyright Charges Brought for Making Photocopies of Files

Rebecca Tushnet

Three cases filed by John Wiley & Sons as a publisher of scientific periodicals, alleging infringement of copyright in scientific articles in the course of patent prosecution; one of these cases was recently dismissed, from E.D. Texas.  There are discovery disputes ongoing in N.D. Ill. and Minnesota related to the scope of the copyright infringement claims. 

USPTO issued a policy statement and moved to intervene in the Minnesota case: because by law a person filing a patent application must disclose all known information that will assist a patent examiner in determining whether to grant a patent, copying in the course of doing so is fair use.  In addition, the PTO takes the position that it is fair use to provide unlicensed non-patent literature to applicants and full file histories to practitioners.  However, the PTO takes no position on whether making additional copies during the course of prosecution—for a client, other attorneys, inventor, or for future reference—qualifies as fair use.  In its opinion on the matter, the PTO also pointed out that applicants are responsible for ensuring that any license they sign isn’t inconsistent with fair use/gives them rights to copy.

The PTO sought a declaratory judgment as to the claim that submissions to the PTO are fair use and sought a fee award.  There are interesting procedural and standing issues about whether the PTO should get a fee award—but the practical effect was to induce John Wiley to substantially change and limit its claims.

Briefly, the argument is that uses in patent prosecution are transformative, and thus favored by fair use: they are for a socially productive purpose that can be distinguished from the ordinary purpose of scientific publications.  They are also noncommercial, a separate factor favoring fair use—though the ultimate output of a patent might be a commercial product, the intermediate use is not commercial and the PTO’s own uses certainly aren’t commercial.

The nature of the works copied are scientific articles, and copyright protection is thinner for factual works, especially when they are being copied because of the factual information them rather than because of their expressive content; likewise, the PTO accepts partial submissions but wants as much context as is necessary to evaluate the prior art, so copying entire articles can be justified when it helps fulfill a transformative purpose.

Finally, the PTO argued, there was no effect on the market, the final factor in a fair use determination. When a use is noncommercial, the Sony case from 1984 specifies that the plaintiff has the burden of showing market harm, and John Wiley couldn’t. 

One notable feature of the PTO’s fair use argument is its treatment of the well-known circularity problem: interfering with a licensing market weighs against fair use, but whether or not you need to license depends on whether a use is fair.  Here, the PTO argued, the only identifiable market for these works that might be affected is the market for use of the works in patent examination itself, which doesn’t count as a market to which the plaintiffs had rights.  As always, one needs a normative limit on the concept of a legitimate market for copyright owners.

In response to the PTO’s motion to intervene, the plaintiffs withdrew any infringement claims based on (i) making copies for transmission to the Patent Office; (ii) transmitting copies to the Patent Office; or (iii) making one archival copy of what was transmitted to the Patent Office.

They persist, however, in arguing that other copies are infringing, including apparently a copy that is made on an individual hard drive before being put into the firm’s document management system or a copy emailed from one attorney to another—that is, perfectly standard practices that are practically necessary in the digital age.  I think the precedent on this gives a very clear signal: if you need to make a bunch of intermediate digital copies to end up with an ultimate fair use, say by backing up your hard drive or by emailing a copy to someone working on the same matter, then those intermediate copies are fair use too; there’s no point in making two different attorneys use the same laptop to avoid making one extra digital copy in-house.

However, John Wiley has not given up: it now argues that law firms infringe by conducting “research on behalf of themselves and their clients” for example by using articles in the course of

(i) evaluating potential inventions that clients present, only to determine that they are not patentable, (ii) advising clients how to lawfully avoid infringement by designing around existing patents, (iii) assessing the validity of patents, (iv) giving opinions as to whether an existing product infringes a patent, and (v) determining whether the client's interests would be best served by maintaining otherwise patentable subject matter as a trade secret. 

As a procedural matter, they have no specific factual allegations that the defendants are doing these things.  Texas judge has called this a fishing expedition and suggested that plaintiffs are at some risk, whether that’s of sanctions or at least of a fee award, going forward. 

From my perspective, pleading issues aside, these are all fair uses too: like submitting the articles to the PTO (or deciding not to submit them after review because they are not sufficiently relevant) they do not implicate the expressive elements of the articles, but are uses of the unprotectable facts therein. The purpose is transformative—the articles weren’t created as factors in a legal analysis but in order to advance scientific knowledge. The use is internal and intermediate, rather than public and directly for profit.  And there is no traditional or reasonable market in taking a license every time you send an email with an attachment or any other activity incidental to an ultimately fair use.

Lessons: Growth of licensing—PTO emphasizes it does a lot of licensing, but that doesn’t mean that its unlicensed copies are infringing—the fair use analysis isn’t that circular when a use is actually transformative

Risk to a plaintiff of making aggressive claims: copyright makes a fee shift possible, and when you take on an entity whose challenged practices are central to its business model, that’s a risk that a plaintiff should consider.

Prof. David Hricik, Mercer Law

Mostly discussed patent ethics, focusing on the ethics of copying text from one application to an application from a different client.  He briefly suggested that this might create work for hire issues, but I doubt that: the firm is highly unlikely to count as an employee and even more unlikely to have agreed in a signed writing that the application would be a work for hire, even assuming it fit within the statutory categories.  Like patent, copyright law’s lines aren’t always intuitive—and copyright law these days can be argued to apply to ordinary activities like carrying out work for clients.

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