IPSC part 10: hodgepodge

Sixth Breakout Session

The Patented Design

Sarah Burstein

What should the patented design cover?  Require the design to be applied to a particular product, and signal that in the name/title.  That better respects First Amendment concerns, notice function of patents, better fit with presumption of validity.  Better allocation of search costs generally.  There’s a new search service for searching designs, but there are still issues of search costs to figure out if things are infringed/valid/invalid.  Abstract protection puts the risk all on competitors in an inappropriate way.

Nominative uses of design: stories about iPhones should be able to depict the product.  Also “transformative” uses.  If someone takes the iPhone size and shape and creates a sketchpad allowing designers to sketch (allowing them to plan apps), that shouldn’t infringe the design patent on the actual phone—Apple doesn’t need to control that market for incentives.  Other creative adaptations: various designs can be adapted from other products; that should be encouraged rather than discouraged.

Scope of prior art would be immediately affected if she’s right. Case about batter dividers for cupcakes.  D came up with purported prior art, like a cookie cutter; a muffin on a stick; a cupcake shaped cupcake holder; a toy figure shaped like a cupcake with a six-pack, arms and legs; a cupcake. If she’s right none of these should be novelty destroying—cookie cutters couldn’t cover cupcake dividers, and vice versa.

What regime if any should protect product designs?  If she’s right, other regimes look less attractive, at least in this one respect.

McKenna: how do you assess nonobviousness? Understands novelty argument, but why doesn’t that destroy nonobviousness?

A: Argued about that in other work. There’s not a clear motivation, to the extent that survives, to move from cupcake container to cupcake divider.  Not close enough.

McK: what does close enough mean? What’s the conceptual space b/t prior art and claim design?

A: her first paper.  If it’s not so close that it’d be perceived as the same thing—primary reference.

Q: how do you distinguish trade dress from design patent?

A: you do get visual representations and the things she wants to leave out in the trade dress arena; however her proposal might undermine attempts to get trade dress protection insofar as someone could make a note pad or a chandelier in the shape of an iPhone, which she thinks would be fine.

Sheff: help explain why this is so challenging. If we think design, like utility, is progressive, that explains some problems; if we think it’s aesthetic, we may find other features difficult; if it’s about distinctiveness it’s just TM and doesn’t make any sense to think about doctrinal problems in this way.  Why is it so important that design patents not be ported out of the products for which they’re granted?

NPE II

Policing the Cease-and-Desist Letter

Leah Grinvald

Larger project on abusive enforcement. Thesis: there is a problem, and current regulations are ineffective.  Need multifaceted approach.  Antiabuse cause of action; look at bar involvement; more aggressive enforcement of consumer protection laws by state AGs.

Vast majority of disputes typically settle through C&Ds, but there are incentives to send abusive ones. Not saying C&Ds are per se bad, but some are. What’s abusive?  Threat of litigation and unnecessary legalese/unsubstantiated legal citations; demand for settlement in short time frame; demand for upfront payment of money including licensing fees/attorneys’ fees (I just saw this recently with an unbelievable—I wish I could say sanctionable—demand for attorney’s fees as if they were ordinary relief in a Lanham Act case); weak legal claims. 

They’re effective because of asymmetrical disputants: well resourced rights holder v. low resourced small business or individual. Low resourced entities have inability to gather information; vulnerable to emotional response/inducement in the abusive letter.  Finally, they are unable to follow through with litigation. Say they have business insurance that will cover trial—they might not be able to deal with an appeal, which forces them to settle.

Model Rules of Professional Conduct are not helpful.  State anti-patent troll laws?  She argues they don’t go far enough.  State AG actions are limited so far, but should be expanded.  Bar associations should issue formal opinions on ethical rules against abusive C&Ds.  “Civility campaign” by San Diego bar ass’n.

Gaia Bernstein: is there any evidence that abusive C&Ds are more effective than nonabusive ones?

A: hard to study. Some attys say nastygram is scarier and more effective.  (Why should we want the rates of effectiveness to be the same?)

Mary LaFrance: how do you decide what’s abusive, given TM owner’s burden of policing/avoiding being deemed to be weak mark?

A: hard at edges, but there are core cases.  Louis Vuitton v. Penn: it’s a famous mark, but it did not need to threaten.  (I think we overstate the burden of policing to excuse TM owners; courts are very forgiving especially when the uses are small or outside the TM owner’s products/services as with many expressive uses.)

Lisa Ramsey: qs about definition.

A: various issues, like timeframe: give a reasonable one to a small entity, which among other things might need to find an att’y. Demand to halt at once is a problem.  3 days to respond—even an IP clinic takes time.

Q: are there constitutional limits on laws against abusive letters?

A: Yes, but laws can be written. Anti patent trolls are drafted similarly.

Rosenblatt: Cal. Lawyer article from this month: Demand Letters as Extortion—about the Cal. Penal Code.

Gallagher: like multifacted approach, but why do you think anything will work?  Will AGs be effective?

A: AGs could work—did affect scanner patent troll, even with investigation alone. Helps w/small  entity’s inability to follow through w/litigation.

RT’s thoughts: I think AGs can be very effective!  People are very interested in complying w/the gov’t, and counsel start giving advice/practice seminars on how to comply when the AGs get involved.  Sort of random thought: I think the preemption questions about anti-troll laws are super interesting. Since the Lanham Act doesn’t displace state laws, what effect should that have on possible preemption analysis?

IP Theory II

The IP Constitution: Private Power and State Power in IP Law

Ariel Katz

[missed intro]  Older cases: Extending the monopoly in IP is illegitimate—but what counts as extension?  Chicago school criticized this approach in the 1960s. IP rights don’t necessarily create market power.  Even if they do so, not clear what extension would occur or mean. Many challenged practices, they argued, were efficient and should be subject to rule of reason.

Chicago critique barked up the wrong monopoly tree. Monopoly has an economic meaning of controlling a market, but it also has an overlapping but distinct legal/political meaning.  Courts concerned about IP monopolies are speaking in the legal/political sense.  Motion Picture Patents v. Universal Film (1917)—patents on projectors for film; conditions of patent license was you were only allowed to exhibit movies sold by the patentee.  Court says you can’t do that, despite argument that this was efficient b/c it allowed the sale of the machine at a low price.  Court isn’t ignorant of the Chicago argument, but Court views that as clearest possible condemnation, b/c it proves that the patentee tries to get its profit not from the thing patented, but from things wholly outside of the patent monopoly.  Extending the patent to fix the price of unpatented supplies. That’s not why we grant patents.

Monopoly = private regulatory power.  Remote control—control people without privity. That’s the legal meaning of monopoly (cf. monopoly on legitimate violence).  The struggle of regulatory power over the centuries—Statute of Monopolies, 1623 declaring crown monopolies ineffective; only Parliament can grant monopolies.  Exception for letters patent to true inventor. Also, Parliament’s use of the power is fine—democratic deliberative process would be our analogy today.

Statute of Monopolies is political-constitutional, not an economic regulation. Antidelegation principle: if police regulatory power can only be exercised/granted by state, it can’t be assumed by individual nonstate actors. Nondelegation doctrine, due process, and antitrust implement this.

Camilla Hrdy: today, patents don’t necessarily confer monopoly. How would this apply where patent holder doesn’t have much market power?  Statute of Monopolies: Parliament reserved the right to itself; isn’t it different in the US because the Constitution granted Congress the power and Congress decided to implement via a patent statute?

A: Problem begins when lawful monopolies begin to exert regulatory powers over what’s not their writings and discoveries and asks the court to enforce it.

RT: Isn’t your argument somewhat circular? Why not read the patent statute as Congress saying: We grant you whatever regulatory power comes from owning your particular patent? 

A: Holmes dissent says that patentee doesn’t have to license at all, and can set conditions.  Court majority says the Constitution isn’t about getting control beyond the scope of your patent.  May be a question of property v. regulation.  The basic distinction is still valid.

Q: Congress amended the Act to say explicitly that certain things don’t count as patent misuse, if you don’t have market power.  How does that tie into the constitutional issues?

A: The other cases are still good law.

Data Pools

Michael Mattioli

Looking at data pools, mostly in medicine/agriculture, e.g., CancerLinQ, Open Ag Data Alliance, Biomarker Consortium, etc. Trying to aggregate data to find research questions, etc.

Proposals for sui generis data protection—no law yet, but perennial topic for debate (10 bills considered since 1996).  Traditional IP gives only thin/no protection.  Big data is becoming more important.  Can data pools reveal new insights?  Do these groups privately craft incentives similar to those that sui generis data protection would offer? What challenges do they face/new opportunities for policymaking? Merges argued that patent pools amount to private rejiggering of patent law—could there be something similar here?

Q: antitrust is an important issue.  (Some discussion of that; I’m not an antitrust expert.)  Exclusivity may be the start of the problem.

Q: what about tying this to health law issues?  Purse strings: gov’t can use them to get data disgorged. 

A: was considering charitable tax deduction; interesting idea.

Q: there might be not so laudable uses of data—touches on privacy, but underlying this work seems to be normative view that big data is good.  But that’s not always true.

A: tends to be an optimist, but that’s an important consideration.