Posts in Legislation

When Adam Smith spoke about an “invisible hand,” he was talking about a good thing – the way that free markets harness the laws of competition, supply and demand and self-interest to improve the economy. But he also could have been thinking of another law. The law of unintended consequences: that actions of people, and especially of governments, always have unanticipated effects. Sometimes these effects can be perverse, reflecting a profound failure of “second-order thinking” (in other words, thinking ahead about “how could this possibly go wrong?”). On January 5, 2023 – a day that may go down in IP infamy – we saw two bold actions. First, the “Protecting American IP Act” became law; and second, the Federal Trade Commission (FTC) proposed a new rule that would invalidate noncompete agreements across the United States. But wait, you might say, that actually sounds great! What’s the problem with protecting American IP, and making the rest of the country join California in unleashing talent to go where it likes? Well, don’t be too hasty. Stay with me on this, and you will see just how shortsighted our government can be.

In general, the adoption of artificial intelligence (AI) and machine learning technologies has the potential to impact society in many ways. These technologies can automate tasks and make them more efficient, which can lead to job displacement and other economic impacts. They can also be used to make decisions that affect people’s lives, such as in the criminal justice system or in hiring, which raises ethical concerns. Additionally, the development and use of AI and machine learning technologies can raise issues related to privacy and security. What could be a more fitting way to open a 2022 year-in-review article on AI and machine learning than by asking OpenAI’s newly beta-released ChatGPT tool to contribute? The above paragraph was generated using ChatGPT’s conversational, chat-based dialog input. The initial request of ChatGPT was the prompt: “Explain the social impacts of artificial intelligence and machine learning technologies over the past year.”

As the Senate Judiciary Committee gears up for an Executive Business Meeting Thursday where members will in part consider S.2774, the Pride in Patent Ownership Act, co-sponsored by Senators Thom Tillis (R-NC) and Patrick Leahy (D-VT), a number of patent advocacy organizations have sent a joint letter to the committee asking it to oppose the bill. The Pride in Patent Ownership Act (PPOA) is seemingly intended to ensure that the public has access to information about the true owner of a patent. But critics of the bill have noted that it focuses on ownership of patents, and does not seek to provide true transparency by identifying those funding and benefiting from Patent Trial and Appeal Board (PTAB) challenges, for instance. Senators Chris Coons (D-DE) and Mazie Hirono (D-HI) last year questioned the bill’s approach, which  would entail penalizing patent owners who fail to record accurate ownership information within 90 days after the issuance date.

At the very end of the movie “The Current War,” Benedict Cumberbatch, the actor who played Thomas Edison, bumps into Michael Shannon, the actor who played George Westinghouse. The two had battled for years over implementations of their respective electric current systems into society, with Westinghouse winning in the end. This particular meeting probably never took place, but the conversation in the movie was rather interesting. 

Last September, a bipartisan pair of Senators introduced the Pride in Patent Ownership Act, which, if passed, would add greatly-needed transparency to our patent system. The legislation would require patent owners to disclose their identity to the U.S. Patent and Trademark Office (USPTO) when a patent issues and whenever it changes hands so that members of the public have easy access to information about who the true owners of patents are. Right now, inventors, businesses, and other interested members of the public often have to undertake time consuming and expensive litigation to determine who owns a patent. As Senator Thom Tillis (R-NC) rightly pointed out when introducing the legislation, “Patents provide a limited term monopoly against the public, and it’s in the public’s interest and benefit to know who owns that monopoly.”

Over the last 15 years, the United States Supreme Court has mutated patent eligibility into an impossibly complex and confusing mess. The Court’s current eligibility test strays far from Congress’s original intent, erodes trust in predictability, and has left many remarking that innovation in the United States is falling behind due to uncertainty of patent eligibility law. Even more troubling, the resulting uncertainty of patent ineligibility for large swaths of innovation in critical technology areas, including artificial intelligence, poses significant risks to U.S. competitiveness, economic growth and national security. The Court has had opportunities to rectify its patent sinkhole but recently declined another chance to mend the chaos. When the Court denied certiorari in American Axle v. Neapco—despite the Solicitor General’s plea to hear the case—it became clear that Congress must step in to rescue U.S. innovation.

The right-to-repair movement has been making strides in recent years, as many states are now contemplating bills that would require electronic device manufacturers to make their parts, tools and know-how available to device owners and independent repair shops. While the goal of expanding repair opportunities for consumers is certainly laudable, repair advocates are pulling a fast one when it comes to the federal copyright law implications of their preferred state legislative solutions. As Professor Adam Mossoff and I explain in a new Hudson Institute policy memo, these proposed state right-to-repair bills are unconstitutional on their face because they directly conflict with the rights secured to authors under the federal Copyright Act. They are also the wrong policy since they would upset the legal and policy foundations that have led to the unprecedented success of today’s thriving digital marketplace. States should not waste valuable time and resources on harmful right-to-repair bills that will be struck down when they are inevitably challenged.

The current unreliability of patent-eligibility law, documented thus far here, here and here, has also created undue burdens on litigants and the courts. In this final installment, we detail how the current unreliability burdens litigants and the courts and how it is a fundamental threat to U.S. competitiveness and national security. Patent infringers now routinely raise Section 101 as a defense, often merely as a strategy to complicate and prolong the litigation, rather than as a good-faith defense with a likelihood of success. For example, one analysis found that, from 2012 to 2014 (when Alice was decided), Section 101 was raised in just two Rule 12(b)(6) motions across the country each year. In the year after Alice, that number rose to 36 motions, and by 2019, accused infringers were filing over 100 such motions each year.

Last week, the leadership of the Judiciary Committees and IP Subcommittees from both houses of Congress received letters seeking to address misinformation being presented by critics of the Patent Eligibility Restoration Act, a bill proposed by Senator Thom Tillis (R-NC) that would abrogate several U.S. Supreme Court rulings on patent eligibility under 35 U.S.C. § 101. Both the Council for Innovation Promotion (C4IP) and University of Akron Law Professor Emily Michiko Morris not only supported Congressional passage of Tillis’ patent eligibility bill but also pushed back on criticisms that the bill would enable biotech firms to patent genes as they exist in the human body.

The International Center for Law and Economics (ICLE) released a white paper on Thursday arguing that Section 512 of Title 17 of the Copyright Act has been a failure, and it should be reevaluated and overhauled. Congress passed Section 512 as part of the Digital Millennium Copyright Act (DMCA), and authors Kristian Stout and Geoffrey Manne argue the federal courts have written out key provisions in the law. Stout and Manne write that Section 512 has succeeded in allowing online service providers (OSPs) such as social media companies to grow and thrive by providing a safe harbor provision as long as they take down infringement promptly. However, the authors argue that the law has failed to provide proper incentives and systems to prevent digital piracy

Patent eligibility law in the United States is in a state of disarray that has led to inconsistent case decisions, deep uncertainty in the innovative, investment and legal communities, and unpredictable outcomes in patent prosecution and litigation. These facts have been extensively documented in multiple sources, including: the statements of all 12 active judges of the nation’s only patent court, the U.S. Court of Appeals for the Federal Circuit (confirmed prior to October 2021); the findings and reports of the Executive branch across all recent Administrations; the bi-partisan conclusions of Congressional committees; a robust body of academic studies; and at least forty separate witness statements at the 2019 hearings on this issue before the Senate Committee on the Judiciary Subcommittee on IP, including statements from advocates that oppose Section 101 reforms.

This morning, the full U.S. Senate Committee on the Judiciary convened an executive business meeting during which the committee advanced S. 673, the Journalism Competition and Preservation Act (JCPA). Though the bill was reported favorably with an amendment drawing support from the Republican members of the committee, others on the Senate Judiciary raised concerns that could presage further debate after it hits the floor of the Senate. The JCPA was first introduced into both houses of Congress last March, with Senators Amy Klobuchar (D-MN) and John Kennedy (R-LA) sponsoring the Senate version and Representatives David Cicilline (D-RI) and Ken Buck (R-NY) sponsoring the version introduced into the House of Representatives.