Management of trade secrets is fraught with competing interests. There is the tradeoff between security and inconvenience—for example, the annoying wait for a special code to allow “two-factor identification” when you already have your password handy. There is trusting your employees while knowing they might leave to join a competitor. And there is the tension between corporate secrecy and the public interest, such as when the fire department insists on knowing what toxic chemicals are used in your facility. And now we have the cloud (like “internet,” its ubiquity merits lower case), which offers unparalleled convenience and flexibility to outsource corporate data management to others. But moving IT functions outside the enterprise creates new vulnerabilities for that data, which happens to be the fastest growing and most valuable category of commercial assets. So understanding this environment has to be a high priority for business managers.
A hearing of the House Subcommittee on Antitrust, Commercial, and Administrative Law held yesterday examined whether big tech companies—Amazon, Google, Facebook, and Apple—are becoming too powerful and deterring innovation. In “Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship,” Subcommittee Chair, Representative David Cicilline (D-RI), said that Google controls search, Amazon controls nearly half of all online U.S. commerce, Facebook captures over 80% of global social media revenue, and Apple has total power over their customers’ devices. In his opening statement, Cicilline took issue with the 30% commission Apple charges on every developer sale in the first year, and 15% thereafter, pointing to this year’s Supreme Court decision in Apple v. Pepper which held that iPhone owners can sue Apple for monopolizing the retail market for the sale of apps, thereby raising prices for consumers. “A former Apple executive who oversaw app store approvals for seven years has also described Apple as having ‘complete and unprecedented power over their customers’ devices and using this power as a weapon against competitors,’” Cicilline said.
The United States is looking to antitrust law to break up big tech. Later today, for example, the House Subcommittee on Antitrust, Commercial, and Administrative Law will be meeting for a hearing on “Online Platforms and Market Power, Part 2: Innovation and Entrepreneurship.” Unfortunately, this may have become necessary, but it will not solve the problem of big tech monopolies. That can only be solved by understanding how big tech creates megamarkets and how they use shadow patent systems to regulate and perpetuate their monopolies—a power traditionally reserved for sovereigns. A patent is nothing but an exclusive right. All it can do is remove an infringer from the market. That incredible power enables startups to attract investment, commercialize new technologies, and challenge incumbents. The value of a patent is dependent on demand and market size. Since national borders establish the market size, the larger the country, the larger the market, and the more valuable a patent can become. But big tech markets are not restricted to national borders, so they get larger. Apple has 1.4 billion active devices reaching four times the 327 million population of the United States.
This week features a busy schedule of hearings on Capitol Hill involving technology, innovation and intellectual property topics. In the House of Representatives, the House Financial Services Committee will get their chance to vet Facebook’s Libra cryptocurrency, while other hearings focus on wireless spectrum policy, antitrust issues posed by Internet platforms, as well as issues facing the U.S. trademark system, including counterfeits and register cluttering. In the Senate, Google censorship, oversight of the U.S. Copyright Office and NASA’s plans to send a manned mission to Mars will be under the microscope. Elsewhere, the Information Technology and Innovation Foundation explores the current state of robotics and how they can help American productivity.
Coverage of the ongoing patent reform debate in the Senate Judiciary Committee by the popular press has been alarmist and largely incorrect. For example, even just yesterday—five days after the final hearing on patent eligibility reform concluded—the top story in Google’s patent alert results was “Corporations shouldn’t be able to patent your DNA,” which leads with the sentence, “The practice of patenting genes, once banned by the Supreme Court, may come back soon despite a measure of horror the very idea once inspired.” It would seem that those companies and entities that oppose reform to patent eligibility requirements are not going to meaningfully participate in the political process, and instead will wield their considerable PR machines in an effort to confuse, conflate and misdirect the public as part of their ongoing scheme to suppress innovation in America. Indeed, we know that the high-tech industry was invited to testify before the Senate Judiciary Committee, but refused, as Senator Thom Tillis (R-NC) explained at the second hearing. Why would the high-tech industry choose to ignore these Senate hearings, where many dozens of witnesses both for and against reform were invited to share their views?
Google’s U.S. patent application 20190124318—originally assigned to Lytro, an American developer of light-field cameras, before it went defunct in March 2018—was published in April 2019. Google is actively working on concepts constructing Virtual Reality (VR) and Augmented Reality (AR) and has spun out products like Daydream, ARCore, Cardboard, Jump, Tilt Brush and Blocks, all of which benefit from light field technology. CNET reported last year that a number of Lytro employees were heading to Google after Lytro folded, and that Google would likely acquire some Lytro patents as a result. Global market research and management consultation company, Global Market Insights, reports that the light field market will grow to $1.5 billion by 2024, rising from $650 million in 2017. The 2017 figures point to media and entertainment industries like gaming, theaters and amusement parks, making up 25% of the overall industry shares. The adoption of the technology in cameras is predicted to drive this growth.
The Internet Corporation for Assigned Names and Numbers (ICANN) is the California-based nonprofit public-benefit organization with authority over the global Internet’s system of unique identifiers, e.g. IP addresses and domain names, known as generic top-level domains (gTLDs). ICANN’s New gTLD Program has seen the addition of more than 1,200 top-level domains to the Internet’s Domain Name System. Each new gTLD is contractually obligated to provide a set of trademark Rights Protection Mechanisms (RPMs), including mainly the Trademark Claims Service, Sunrise, and the Uniform Rapid Suspension system, discussed more fully below. From the perspective of brand owners, new gTLDs—like the Internet itself—continue to create both opportunities and challenges for protecting intellectual property and serving consumers in the online marketplace.
This week in Other Barks & Bites: the Senate IP Subcommittee announces its roster of panels for its first two of three hearings on patent eligibility in America; the U.S. International Trade Commission institutes a Section 337 investigation of lithium ion batteries over trade secret claims; reports indicate that Amazon could buy Boost Mobile; Poland files a formal complaint over the European Union’s new copyright rules; Time settlement leaves open question of copyright infringement for photos embedded on social media posts; Finjan Holdings loses patent infringement claims against Juniper; VoIP-Pal.com announces positive results at the PTAB and U.S. district court; Japan’s IP court hands win to Nintendo in Mario Kart trademark case; and the Federal Circuit vacates district court over failure to consider joining relevant patentee.
This week in Other Barks & Bites: Chinese state political advisors suggest changes to the country’s copyright law, including stronger punitive measures for infringement; President Donald Trump bans Huawei telecommunications equipment from use on U.S. networks; Korean IP offices get ready to study inter-Korean IP cooperation; Huawei and Samsung reach a conclusion to their worldwide patent litigation; AbbVie okays a generic Humira treatment in 2023; Disney escapes Pirates of the Caribbean copyright suit unscathed; Guns N’ Roses files a trademark suit over a beer; Qualcomm enters into another worldwide patent license for 5G technology; and Procter & Gamble unveils its largest research and development center after $400 million upgrade to Ohio facility.
I am Emil Malak, CEO of VoIP-Pal.com Inc., and a named inventor on two U.S. patents–Mobile Gateway: US 8,630,234 & Electrostatic Desalinization and Water Purification: US 8,016,993. To date, our company owns 22 issued and or allowed patents, which we developed over the past 15 years. Against all odds, we have been 100% successful in defending eight Inter Partes Reviews (IPRs): four from Apple, three from AT&T, and one from Unified Patents. We are presently in litigation against Apple, Verizon, AT&T, Twitter and Amazon. My experience with Voip-Pal has made it painfully clear that the deck has been stacked against companies who own IP being used without license by large tech companies. The America Invents Act (AIA), orchestrated by Silicon Valley, was designed to destroy the very ladder they climbed to ascend to their lofty perch, and make certain that they could not be challenged.
In our first article examining the 2018 patent market, we provided an overview of the data and found that prices were stabilizing across listings, buying and selling programs were becoming more streamlined, and there were more transactions overall. This trend extends to “patent packages” as well. At 591 packages (502 last year), listings have increased by 17.7%. The only year in which we saw more listings was the 2016 market. If the assets from Provenance Asset Group were included in these numbers, the numbers would show an all-time high. The number of total assets and of U.S.-issued patents also increased (see Table 2). We have benchmarked our deal flow with that of other large corporations and defensive aggregators and have found that the number of brokered packages we received is generally similar, so we are confident that our numbers reflect the market. Compared to prior years, the total number of U.S.-issued assets listed in packages increased twice as fast as the number of packages listed. Notably though, the total number of assets listed increased even more than the U.S.-issued assets. This signifies the continued importance of international assets and an elevated level of focus on elements of a package other than U.S.-issued assets. But, U.S.-issued assets are still the focus in most listings (see Figure 4). While we limit the types of package included in this dataset to the more common types (e.g. quasi-public/brokered packages containing 200 or fewer assets), we also track larger bulk deals and private deals.
USPTO Director and Under Secretary of Commerce for Intellectual Property Andrei Iancu believes that “to a large extent … if they want to, the Federal Circuit can fix the problem” with patentable subject matter under Section 101. Speaking at the 27th Intellectual Property Law & Policy Conference at Fordham Law School on April 25, Mr. Iancu said the interpretation of Section 101 is “the most important issue of substantive patent law currently.” He added: “This issue must be addressed now in the United States.” The USPTO Director said there is consensus that the state of the law is unworkable: “Recent case law has created significant confusion in this regard.” But he added: “If you look at the Supreme Court cases by themselves, those cases are not the ones necessarily that have caused the problem. In the way those cases have been interpreted in the lower courts or at the USPTO itself, we have deviated from the core message of the Supreme Court to some extent.”
On Monday, the U.S. Supreme Court invited the United States Solicitor General to file a brief expressing its views in the long-running case of Google LLC v. Oracle America Inc. The case highlights the complexities of protecting software via IP rights. As with patents, the courts often struggle to apply copyright concepts to software, leaving companies bleeding time and resources. Determining what can be protected and what can’t be is complex—even for appellate courts.“ These software piracy cases are convoluted because there can be both literal and nonliteral copying, as shown by the Google v. Oracle case,” said Brian Darville, chair of the trademark and copyright practice group at Oblon. “It’s critical for companies to legally safeguard their software and ensure they’re not infringing on their competitors.”
This morning’s edition of the Wall Street Journal carried a front-page article describing how the once mighty and untouchable online-advertising operation at Google has begun to struggle thanks to increased competition. With a disappointing revenue report that shows Google ad revenue slowing, and an inability or refusal to answer questions yesterday on the earnings call, Alphabet stock is currently heading for its worst trading day. Google accounts for over 99.5% of Alphabet revenue, so a slowdown in advertising revenue should be and is alarming. Online advertising revenue is where Google, and therefore Alphabet, derives its revenue.
This week in Other Barks & Bites, governments and intellectual property offices around the world celebrate World IP Day; the U.S. Trade Representative releases its most recent Notorious Markets List; TiVo subsidiary Rovi files another patent suit against licensing holdout Comcast; Amazon ramps up program for connecting sellers with lawyers for patent infringement issues; the USPTO seeks public comments on gathering data for SUCCESS Act study; music industry groups submit letter to Copyright Office regarding Mechanical Licensing Collective membership; and weak China data center sales sends Intel stock tumbling by 7.5 percent.