This report recommends improvements to two areas of patent law policies affecting how well a patent gives notice to the public of what technology is protected and remedies for patent infringement. The report provides valuable insights on how courts can reform the patent system to best serve consumers. It recognizes that patents play a critical role in encouraging innovation, but it also observes that some strategies by patent holders risk distorting competition and deterring innovation. This is especially true for activity driven by poor patent notice, and by remedies that do not align the compensation received by patent holders for infringement with the economic value of their patented inventions. This is a print on demand report.
Innovation benefits consumers through the development of new products, processes and services that improve lives and address unmet needs. It is key to meeting society's greatest challenges in areas as diverse as energy production, communications and health care, and it is essential to sustained economic growth and global competitiveness. But innovation is a complex process. It involves a series of steps from idea to invention through development to commercialization, each of which can be expensive, risky, and unpredictable. The goal of the patent system is to promote innovation in the face of that expense and risk. This book begins by examining the role of technology markets and patent markets in innovation today. Chapter 1 discusses collaboration and technology transfer which have become increasingly important pathways to innovation with significant benefits for consumers. Chapter 2 describes the increasing activity and complexity of business models in markets for patents that do not involve technology transfer, and Chapters 3-8 make recommendations for adjustments to the legal rules and practices governing notice and remedies to better align them with competition policy without undermining patent law's support for innovation.
In its recent report entitled “The Evolving IP Marketplace,” the Federal Trade Commission (FTC) advances a far-reaching regulatory approach (Proposal) whose likely effect would be to distort the operation of the intellectual property (IP) marketplace in ways that will hamper the innovation and commercialization of new technologies. The gist of the FTC Proposal is to rely on highly non-standard and misguided definitions of economic terms of art such as “ex ante” and “hold-up,” while urging new inefficient rules for calculating damages for patent infringement. Stripped of the technicalities, the FTC Proposal would so reduce the costs of infringement by downstream users that the rate of infringement would unduly increase, as potential infringers find it in their interest to abandon the voluntary market in favor of a more attractive system of judicial pricing. As the number of nonmarket transactions increases, the courts will play an ever larger role in deciding the terms on which the patents of one party may be used by another party. The adverse effects of this new trend will do more than reduce the incentives for innovation; it will upset the current set of well-functioning private coordination activities in the IP marketplace that are needed to accomplish the commercialization of new technologies. Such a trend would seriously undermine capital formation, job growth, competition, and the consumer welfare the FTC seeks to promote. In this paper, we examine how these consequences play out in the context of standard-setting organizations (SSOs), whose activities are key to bringing standardized technologies to market. If the FTC's proposed definitions of “reasonable royalties” and “incremental damages” become the rules for calculating damages in patent infringement cases, the stage will be set to allow the FTC and private actors to attack, after the fact, all standard pricing methods through some combination of antitrust litigation or direct regulation on the ground that such time-honored royalty arrangements involve the use of monopoly power by patent licensors. In consequence, the FTC's Proposal, if adopted, could well encourage potential licensees to adopt the very holdout strategies the FTC purports to address and that well-organized SSOs routinely counteract today. Simply put, the FTC's proposal for regulating IP by limiting the freedom of SSOs to set their own terms would replace private coordination with government hold-up. The FTC should instead abandon its preliminary recommendations and support the current set of licensing tools that have fueled effective innovation and dissemination in the IP marketplace. FTC forbearance from its unwise Proposal will improve bargaining incentives, reduce administrative costs, and remove unnecessary elements of legal uncertainty in the IP system, thereby allowing effective marketplace transactions to advance consumer welfare.
This book provides a thoughtful and balanced treatment of key legal developments in the courts, agencies, and legislatures in every area of IP law. The 2009 edition reports on nearly 200 top IP legal developments, including: In re Volkswagen of America, Inc.; In re TS Tech USA Corp.;Tafas v. Doll;Broadcom v. Qualcomm;In re Bose Corp.;Elsevier v. Muchnick; and Salinger v. Colting
In private enforcement systems such as the one for patents, remedies perform the “public” function of determining the optimal amount of protection and deterrence. If every patent were properly granted and had just the right scope to incentivize innovation, then strict enforcement and harsh penalties for infringement would be a good idea. But in a world where too many patents are granted, their boundaries are often ambiguous and scope excessive, things are not so simple. The expected likelihood and magnitude of the penalty determines the number of infringement suits and the litigation resources that will be poured into them. As a result, patent remedies are an important policy lever for determining the correct amount of innovation, which is the underlying goal of the patent system. The Federal Trade Commission's new Report entitled "The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition," issued in March, 2011, highlights the importance of fixing the patent notice system. Patents are property rights. An effective property rights regime requires a timely, reliable, cost-effective system for providing notice, as well as the right incentives for responding to notice once it is given. Notice serves essentially the same purpose in the patent system as in our system of land ownership. It is socially wasteful for developers to build, only to find out later that the land belongs to someone else, who is now in a position to extract a very large penalty. Prior to building the developer may have had a competitive choice of parcels, but once construction is completed this market has gone from competitive to bilateral monopoly. For the same reasons it is socially wasteful for entrepreneurs to develop new processes or products, only to find out later that they have fallen within the claims of someone else's patent. While the problem of patent overbreadth and ambiguity are not easily repaired, the law could do much to improve the notice situation, in particular by increasing private burdens to provide adequate and timely notice to reasonably anticipated infringers, just as the real property system does. In the law of real property parties are required to supplement deficiencies in the public notice system by providing more direct types of notice reasonable for the situation. For both infringement injunctions and patent damages the problems of implementing such a requirement are far more manageable than repairing other elements of the patent system. Further, most of the changes could be placed into effect by the courts without new legislation.
"Keeping up to date with changing IP laws adds to the complexities for effective due diligence. This...guide assists the intellectual property attorney in conducting a thorough review of all aspects of intellectual property and technology, accurately assessing and analyzing the risks and benefits associated with those intangible assets, and determining how they impact transactions and the business at large."--
This is the 17th Annual volume in the series collecting the presentations and discussion from the Annual Fordham IP Conference. The contributions, by leading world experts, analyse the most pressing issues in copyright, trademark and patent law as seen from the perspectives of the USA, the EU, Asia and WIPO. This volume, in common with its predecessors, makes a valuable and lasting contribution to the discourse in IP law, as well as trade and competition law. The contents, while always informative, are also critical and questioning of new developments and policy concerns. Praise for the series: "This must be one of the most enjoyable and thought-provoking conferences in the IP field. The high quality of the speakers is matched by the intense, audience-led debates and challenges which follow." The Honourable Mr Justice Laddie, Royal Courts of Justice, London "Faculty for this conference are always well-known 'names', well respected leaders in their fields, speaking with a combination of candor and timeliness that is unrivaled by any other forum of its kind." Honorable Marybeth Peters, Register of Copyrights, United States Copyright Office.
Earning an income in our time often involves ownership of or control over creative assets. Employing the law and philosophy of economics, this illuminating book explores the legal controversies that emerge when authors, singers, filmmakers, and social media barons leverage their rights into major paydays. It explores how players in the entertainment and technology sectors articulate claims to an ever-increasing amount of copyright-protected media. It then analyzes efforts to reform copyright law, in the contexts of 1) increasing the rights of creators and sellers, and 2) allocating these rights after employment and labor disputes, constitutional challenges to intellectual property law, efforts to legalize online mashups and remixes, and changes to the amount of streaming royalties paid to actors and musicians. This work should be read by anyone interested in how copyright law - and its potential reform - shapes the ownership of ideas in the social media age.
