WIPIP: Opening plenary

WIPIP Plenary

[Standard disclaimer: these are just my notes; I miss stuff or it’s about patents and I don’t necessarily get it; I also have to pick and choose from many attractive panels and this year I’m only at the first day, which makes me sad.]

Colleen Chien, Innovation, Inequality, Innovators: 4 hypothesis: Two-pie hypothesis: distribution of patented innovation supports two stories, increasing abundance and increasing scarcity; innovation  can increase or decrease equality and IP can play a role (both and); quality of innovation depends on inclusion across the innovation pipeline (inclusive innovation); to measure inclusion we can look at inequality and small entities.

1894, Animal trap patent, William Hooker of Illinois—at the time, Midwest was 2d top region for patenting. Mechanical patent, individual innovator.  1976, different representative patent: Goretex, Delaware, chemical patent, innovator working with his father.  2015, Larry Ellison, California patent on database automation; 8 other inventors named, many South Asian immigrants.  California has been the top patent origin for a while now, mostly just the Bay Area.  Moved away from mechanica, instruments, chemistry to electrical engineering—now 50% of patents.  Individual inventors are a small percentage now.  CS grad students: Temporary visa holders are now over 60%; white Americans going down, Hispanics, African-Americans, Asian-Americans holding tiny.  Foreign company patenting going up.

Bigger pie: digital abundance, involving diversity and high skilled immigration, Silicon Valley leads the world and provides consumer surplus. But: less innovation in mfg; increasing domination by foreign innovators; domestic brain drain.  So what is the relationship between innovation, IP, and inequality?  Inequality of production and consumption can differ. 

Innovation drives sorting, segregation, agglomeration and concentration—best institutions get bigger market share, tournament rewards for individuals who manage to make it to Google/Stanford. Patenting and 1% inequality are correlated including geographically.  Rigged system (in left and right wings); privileged patenting and tax avoidance.  Patent and copyright rents (left wing critique); tech companies buying up academics and lobbyists and capturing all the gains (right wing critique)—IP lobbying top clients include Alphabet, Comcast, iHeart Media, Microsoft whereas in 1998 it was the RIAA, BSA, MPAA while only the BSA is left in the top ten.  Golden rule: he who makes the gold makes the rules.  Privileged patenting: later patent rates for those w/top 3d grade math test scores is highly associated with parental income.

Inequality in consumption: overinvestment in markets where rents are possible--$400 juicer in Silicon Valley while tropical diseases go understudied.  Rent-seeking prices, not just b/c of patents, but painkillers that once cost $138 now cost $2979.

Innovation and decreasing inequality in production: innovation can foster growth and social mobility. Consumption: price of electronic goods has gone down a lot, except for cable service; Larry Ellison’s surplus creation is at least partly shared.  Top 10% patenting entities took home 26% of patents in 1900s, now over 60%.  There are industry effects; 83% of electrical engineering patents are held by the top 1% of holders.  Except for chemicals, there’s increasing concentration in other fields as well.  No evidence that first to file disadvantages small inventors, but further disaggregation of the data (to screen out university entities) is needed.  Small entity share declines over the patent lifecycle—filing, actual issuance, first, second, and third maintenance fees.  Are they dropping out or becoming larger? Seems to be dropping out. Give us pause: we encourage filing at the front end, but people in small entities don’t seem to be getting as much value from them, so are we encouraging them to waste their money?

Michael Meurer: isn’t this IT and inequality as much as it is IP and inequality?  Increasingly hard time showing up in your data for startups; perhaps it’s increased investment required in sufficient scale of IT that is a big part of that.

A: There are significant industry effects, true. But tech is not destiny.  Automation in textiles: low skilled textile workers gained, but high skilled artisans lost their jobs.  There are other non-IT specific mechanisms such as capture of institutions; education system; pharma lobbying to set the rules.

Michael Madison: Local/regional aspects—Cleveland, different than/overlapping with Silicon Valley. Encourage you to push on that part of the argument.  Industrial, economic, social history differs in different places.

RT: Having just finished Ta-Nehisi Coates’ recent book, I wonder whether this isn’t all the result of the specific history of suppression of African-Americans over centuries.  The IP professoriate too tracks the results of this suppression.  IP and IT may demonstrate the results but are they places to look for solutions?

A: Inequality in patenting is one way of tracking inclusion; it’s one way of rigorously tracking the pipeline.  There are some “valleys of death” in the pipeline; IP policy may not be the place for a fix, but it is one way to measure what we are losing.  Institional history of patent system in specific: patenting was initially limited to citizens, no slaves or nonwhite foreigners; married women’s patents were also questionable until the late 1880s.  Article on the invention of the slave: cotton gin etc. had many contributions from slaves but masters took the credit.

Mark Lemley: This maps to all US history: all the trends you describe look like trends in the economy generally/patents aren’t actually different than the economy but move in lockstep with it, e.g. Gini coefficient.

A: Yes, as an empiricist wanted to see what was going on w/innovation system and its self-image as egalitarian and meritocratic.

Saurabh Vishnubhakat, Rethinking Patent Law's Validity Power

Power used to reside ex ante in the PTO, ex post primarily in the courts; ex post power has been progressively reallocated from courts to PTO: Bayh-Dole Act, 1980, American Inventors Protection Act, 1999, America Invents Act, 2011—largely a story about expertise. Neglected story: a desire for political input. A certain industry/tech, business methods, has been singled out for special treatment, which isn’t just an expertise story.

How it’s been used in practice is part of the politicization of the patent process, particularly the validity power: Adjudicatory process has been used by PTO to do both things Congress intended and things it didn’t/stakeholders were worried about.  PTAB panels have been packed w/admin judges who are picked by those on high. Judicial oversight: resisting review of case selection (PTO uses nonreviewable decisions as shield from Fed Cir review); evading review of statutory boundaries; evading review of adjudicatory duties.

Panel stacking: 3 APJs per panel usually, but can be expanded, which is not random. Supposed to include field experts.  Members are chosen by agency leadership and can include leadership.  One senior and one junior person at least—to ensure that new people are acculturated.  The effect is to control outcomes, especially on rehearing: rehearing may be granted with a different, larger panel.  Colloquoy b/t judge and PTO counsel: “the Director is trying to ensure that her policy position is being enforced by the panels.” Consistency & uniformity are desirable, but there are rule of law concerns.  Target v. Destination Maternity: original panel was 3 APJs; were about to decide an issue in a way leadership would have disagreed w; before decision expanded sua sponte to 5 including 2 lead APJs, but still got 3-2 decision holding firm; panel was expanded again, to 7 with 2 more senior APJs, and finally got the “right” outcome, 4-3 the other way.

Judicial oversight: more subtle, more defensible but still ultimately problematic. Past: a finding that no substantial Q of patentability existed was nonreviewable.  Should a decision to proceed also be nonreviewable, meaning no interlocutory review?  Preliminary decision to proceed would merge into final merits decision, if any. Cuozzo majority disagreed; best argument was the canon against surplusage, given what the APA says.  But then what does the statute mean for a decision to proceed in order to be “final and nonappealable”?  The high standard for presumption of judicial review to be overturned from the APA was not met, in SV’s opinion.  Cuozzo was a strong victory for the PTO, allowing additional claims to unreviewable discretion. Why is this so potent a vehicle for policy autonomy?  The validity power is exercised separately—power to screen cases for likely merit, and separate power to adjudicate cases actually chosen. Decision to screen is directed to Director by statute, which is subdelegated to the PTAB which has power to adjudicate, but there’s no statutory command and it may be problematic to have the same panel do both. Screening is unreviewable, and adjudication power is reviewable.  That reviewability is a key factor in the argument that the scheme is constitutional and appropriate. Natural agency incentive: make things look more like screening than adjudication, and it’s not that hard to do b/c screening std is whether there’s likely success on the merits.

Stacking has some justification in uniformity; SV thinks that there’s even an argument for Chevron deference when the Director is sufficiently clear.

Costs: injury to stable property rights; injury to credible commitments of Congress and agency; self-reinforcing injury to oversight—can you trust the Directors who come after not to exercise their political power against us?

Solutions: make it more judicial.  Have some decisions be precedential if you like them; make decisions precedential and train APJs to follow them.  Done for ex ante clarity.  Also: separate screening from adjudicating, raising the cost for the agency to evade review.

Betsy Rosenblatt, Copyright’s One-Way Appropriation Ratchet

Rolling Stone review: Beck incorporates a “cross pollination” of styles which shows him to be one of the most innovative and forward-looking artists—he used hip hop, soul, etc.

Courts sent a very different message from Rolling Stone when hip hop artists sample—start with scare quotes around “rap music” and intoned “thou shall not steal.”  Similar message to NWA from 6^th Circuit: get a license or do not sample; this doesn’t stifle creativity at all.

In 2016, the 9^th Circuit disagreed w/6^th Circuit for de minimis copying; the infringer in the 6^th was the NWA, whereas in the 9^th the noninfringing defendant was Madonna, and the plaintiff was a group of African-American musicians, even though Madonna adopted the cachet of a subculture not her own.

If you make slides for class of music cases, though there are exceptions like He’s So Fine, mostly white artists appropriate with impunity and are often lauded, but minorities who appropriate find legal challenge and often moral condemnation.  This is a social as well as legal product, reflecting societal and judicial bias but it’s also systematically baked in to the discourse of value in © law and practice.

© presents as facially neutral but inherently/discursively assigns value to some expression over others. Doctrine combine with judicial attitudes and risk imbalance to reflect and reinforce racial bias.

Responses are often to give more ownership to oppressed peoples, and there is sense to this, especially if we’re interested in profit maximization.  Merges/Hughes proposal.  If one’s goal is to create a few especially wealthy members of minority groups, expanding substantial similarity is a tool, but that is unlikely to promote equality broadly and ignores the wider effects on creativity by favoring artificial concept of originality.  That proposal also doesn’t help those who don’t have resources already or who want to talk back to inequality.  Don’t double down on a flawed system; adjustment has to come by making it thinner in a way that recognizes the dialogic nature of expression.

The traditional is reduced to the primitive; the doctrine freezes works and attributes ownership to anyone who fixed them.  Devalues improvisation and creates a “right” version of the work. Derivers from “unauthored” works get to own the whole thing; this lets them create the narratives/colonize the work of minority cultures, taking from but not giving back—Deep Forest can stop others from similarly using the work of Solomon Islanders. Makes it seem that they have more value than those they’ve built upon—assigns value to things that might just be practical limits on ©’s grant of exclusivity.

Have to use dominant works to critique dominant narratives, but cramming this into fair use distorts the activity—makes Alice Randall call The Wind Done Gone a parody.  Makes the use for critique more risky.  Semiotic disobedience would be even harder w/thicker ©.  People who don’t trust the system are more likely to withdraw/refrain under conditions of uncertainty.

Minorities are less likely to register, to own (as opposed to transferring—Spike Lee in Malcom X; George Clinton’s works are owned by an unrelated party).

Takeaway: more of the same isn’t better. Not interested in tearing down copyright.  More recognition that all communication is in some way derivative.  A deriver should be understood to own only what’s contributed to the “prior art”—allow more derivation and appropriation by all. 

Vishnubhakat: you seem to posit crowding out of © space; doesn’t that mean that if you allowed closer imitations the “more” innovative minority voices would be crowded out?

A: Doesn’t posit crowding out; doesn’t mind appropriation as long as the appropriators don’t get as much out of it as they do now.  Doesn’t see it as a zero sum game: there’s an infinite capacity for creative expression.

Lunney: Note that the most wealthy African-Americans come disproportionately from the © space compared to whites; should that change the analysis?

A: No: many of them are actually from negative spaces like fashion, cuisine, talk shows, the famously constrained hip hop. Also making a few people rich is not a social justice strategy.

Q: One way downward ratchet?  Some examples of cases are minority v. minority. Should we relax the standard for fixation? 

A: gut instinct is that relaxing fixation would benefit improvisers in particular, which might be good. But it has all sorts of practical difficulties.  A lot of these doctrines exist for good, practical facially neutral reasons. We should think about mitigating their disparate impact.  Termination of transfers also has its place.