Patent and Copyright Reform Update

by

Michael Small

Congressman Bob Goodlatte, Chairman of the House Judiciary Committee, has announced that he will reveal a number of proposals to take place through the year during his speech at the 115th Congress that would reform intellectual property, targeting patent litigation cases and the Copyright Office.[1]  This reform is built upon his reflection of what is hindering American business.  In his perspective, he argues that the rising number of regulations and ‘red tape’ placed on businesses are causing a greater hindrance on entrepreneurs and companies with regard to innovation and competition.  Therefore, he will put his focus on making America competitive again by making the legal system fair and efficient.  In particular, he emphasized on making it more difficult for lawyers to ‘game’ the legal system by discouraging abusive patent litigation cases or ‘truly frivolous lawsuits,’ from occurring or accumulating high damage costs, often caused by aggressive ‘patent trolls.’[2]

One of the first proposals to reflect his speech in the 115th Congress[3] has already been submitted at the end of 2016, in which he targeted a total reform of the Copyright Office’s management of power.  The proposal stated that the Copyright Office should maintain its own autonomy over budget and needs for technology (while still being included as part of the Library of Congress).  In addition, he requested that the Copyright Office be reorganized to have the same nominational progress as government officials,[4] such as having the Register of Copyright elected, serving a 10-year term before re-elections, and being advised by a committee (Goodlatte, 2016).  He argues that these positions will allow the American population to provide input as to who will represent the copyright process.  Goodlatte also proposed for the Copyright Office to create and maintain a digital, searchable database of filed copyrighted work in the U.S.  Along with this establishment, he proposes that the Copyright Office make their database open for public use and browsing, with the option to charge users a fee for using its database or for letting copyright owners add extra metadata into their registered goods.  This proposal is a reference to the rapid advancement and popularity of technology in the 21st century and of how to accommodate this movement effectively without being ‘left behind.’  According to Goodlatte, this is just the beginning of many policy proposals he will make and support throughout the year in order to fully reform copyright law into the environment that is needed to make American businesses remain leaders in creativity and innovation.

Although so far Goodlatte’s proposal for changing the Copyright Office has been met with positive reception, efforts to enforce copyright reforms in the past have been met with numerous levels of backlash.  For instance, the last attempt at proposing bills that would have strengthened copyright protection, the Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA), has gathered very negative reception all throughout the U.S.  SOPA in particular would have allowed the government to seize foreign website domain names that aimed at online piracy.[5]  However, several loopholes were located within the Act, such as holding search engines liable for infringement and allowing internet service providers to remove infringing websites from their domain name system, preventing users from accessing the website[6] (Yoder, 2016).  This would have bypassed previous protections granted by the approval of the Digital Millennial Copyright Act[7] (DMCA), to the point that SOPA could have granted internet service providers the power of censorship.  Over 115,000 websites, including Google and Wikipedia, protested against the bill,[8] gathering support and persuading government officials to withdraw their support until the bill failed to pass the Senate.  The negative reception SOPA and PIPA gathered had also left an influence on the congressmen, who had not proposed any other law that would affect copyright up until Goodlatte’s agenda for the 115th Congress.  Whether a similar backlash will be present with any of Goodlatte’s future proposals involving copyright will be unknown until more are announced and made aware to the public.  The reorganization of the Copyright Office, if passed by Congress, may be a gauge into the possibility of future reforms and modifications of copyright law depending on its reception to the public.

This is not the first time Goodlatte has called for reforms of intellectual property.  Previously he had attempted to modify how patent cases were processed by proposing the Innovation Act of 2013.  In an attempt to target and reduce the power that ‘patent trolls’ had on defendants, the regulation set by the act would have increased the transparency taking place between the plaintiff and defendant regarding the infringed material.  This meant that plaintiffs would have had to specify what part of the patent was being infringed, notably the following:

Each claim of each patent allegedly infringed, including each accused process, machine, manufacture, or composition of matter … alleged to infringe the claim; for each claim of indirect infringement, the acts of the alleged indirect infringer that contribute to, or are inducing, a direct infringement; the principal business, if any, of the party alleging infringement; the authority of the party alleging infringement to assert each patent and the grounds for the court’s jurisdiction; each complaint filed that asserts any of the same patents; and whether a standard-setting body has specifically declared such patent to be essential, potentially essential, or having potential to become essential to that body, as well as whether the United States or a foreign government has imposed any specific licensing requirements.[9]

As a further extension to the specified requirements, it would also require plaintiffs to pay for the defendant’s court costs should they lose the case, going as far as to affect the parties involved with supporting the plaintiff should they be unable to afford the costs, including shell companies.[10]  However, the bill has received some criticism among the audience it aimed to protect, especially from small businesses and independent inventors.  They argue that the proposal “places an unfairly high burden on patent holders, making it too difficult for small businesses or individual inventors — rather than large companies — to protect their patents … make money from research … [and inventor’s point of view] was missing” (Robertson, 2013).  This would mean that only larger companies would be able to properly benefit from the Innovation Act, as they could afford the investment of resources required to prove the legitimacy of their patent(s) should their patents be legitimately infringed.  In addition, the decline of patent cases in 2014 has made support for the bill reach a stalemate, ultimately being rejected by the Senate in the 114th Congress.

A similar bill was announced in 2015 known as the Protecting American Talent and Entrepreneurship (PATENT) Act.  While it addresses similar issues brought up by the Innovation Act of 2013, it also adds protection to the values of patent and/or trade secret IP that would have eroded under the Innovation Act and provides some level of protection involved with parties that are supporting the plaintiff.  However, this bill faced opposition as the language for the customer stay is unclear.[11]  This uncertainty once again provided potential favorability towards larger corporations, thus receiving little support and not being able to move forward in congress.  It may be possible for Goodlatte to reintroduce the Innovation Act or the PATENT Act in some form as part of the promises he made in the 115th Congress, but to what extent will be up to discretion.

It is possible for other congressmen and senate members to introduce bills that would also reform patent and copyright to their preference.  However, there appears to be limited interest in Congress to move the bills forward for approval.  For instance, Senator Chris Coon made a proposal in response to America’s patenting system switching to the first-to-file system[12] known as the Support Technology and Research for Our Nation’s Growth (STRONG) Patents Act. This bill, if approved, would have allowed the Federal Trade Commission to target ‘patent trolls’ that make abusive demand letters and monitor the impact the patent system has on smaller businesses.  Michael Burgess’s Targeting Rogue and Opaque Letters (TROL) Act would have targeted demand letters made in bad faith in terms of representations, compensation requests, or omissions.  Jared Polis’s Demand Letter Transparency Act would have made an archive of all demand letters sent by ‘patent trolls,’ or (companies that sent many), with some exceptions such as original works or educational centers.  All of these bills have stalled in Congress, with few of them, if any, being reviewed in a timely manner.

In conclusion, should Goodlatte’s copyright reform proposal be put forward and approved by the senate, his speech at the 115th Congress may have provided the inspiration needed to resurge interest within congressmen to partake in the reformation of the copyright system and for members to compromise with each other to find the best solution to deal with ‘patent trolls’ while providing proper support for patent protection for individuals, small and large businesses.  With the majority of congress now held by a Republican majority after the elections of 2016, there may be a greater chance for congressmen to make a unified decision and/or consensus regarding the handling of copyright and patent reforms.

 

[1] See Gene Quinn, Goodlatte pledges to pursue patent litigation reform, copyright reform in 115th Congress, IPWatchdog, (2017), http://www.ipwatchdog.com/2017/02/01/goodlatte-patent-litigation-reform-copyright-reform/id=77879/

[2] A patent troll is defined by Chief Judge Rader as “any party that attempts to enforce a patent far beyond its actual value or contribution to the prior art.”  See Peter Calcara, Patent trolling: What it is and why it is important to CPAs, (Apr. 18, 2016), https://www.picpa.org/articles/cpa-now-blog/cpa-now/2016/04/18/patent-trolling-what-it-is-and-why-it-is-important-to-cpas

[3] See Bob Goodlatte, Goodlatte announces agenda for 115th Congress. House of Representatives: Judiciary Committee, (2017), https://judiciary.house.gov/press-release/goodlatte-announces-agenda-115th-congress/

[4] “The Copyright Office should also add several positions to advise the Register including a Chief Economist, Chief Technologist, and a Deputy Register.” See Bob Goodlatte, Reform of the U.S. Copyright Office, House of Representatives: Judiciary Committee, (2016), https://judiciary.house.gov/wp-content/uploads/2016/12/Copyright-Reform.pdf

[5] See H.R.3261

[6] “Some parts of the legislation, for example, would hold search engines that led their users to pirated content liable for infringement … permitted internet service providers (ISPs) to remove allegedly infringing websites from the domain name system.”  See Christain Yoder, A post- SOPA (Stop Online Piracy Act) shift in international intellectual property norm creation. Journal of World Intellectual Property, 15(5/6), (2012)

[7] See 17 U.S. Code § 512.

[8] See Jenny Wortham, Public outcry over antipiracy bills began as grass-roots grumbling, New York Times, (2012), http://www.nytimes.com/2012/01/20/technology/public-outcry-over-antipiracy-bills-began-as-grass-roots-grumbling.html?pagewanted=1&ref=technology

[9] See H.R. 3309.

[10] Shell companies are generally identified as “companies that don’t manufacture anything but hold a number of patents … sending threatening letters to companies claiming they have been violating one or more of their (often vaguely defined) patents.”  See Jonathan Griffin, Patent trolls’ hefty tolls: Lawmakers target shell companies that threaten small businesses with bogus claims of patent violations, State Legislatures, 10, (2014).

[11]  “… language in the proposed legislation does not so limit stays … The concern consistently raised by the Innovation Alliance is that anyone could be a customer, including large corporations.” See Gene Quinn, Mixed Reviews for the PATENT Act in the Senate, IPWatchdog, (2015), http://www.ipwatchdog.com/2015/05/04/mixed-reviews-for-the-patent-act-in-the-senate/id=57457/

[12] In 2011, Obama signed the Leahy-Smith America Invents Act, which shifted patent right permissions in the U.S. from a first-to-invent system to first-to-file.

 

References

Calcara, P. (2016). Patent trolling: What it is and why it is important to CPAs. Pennsylvania Institute of Certified Public Accountants. Retrieved from https://www.picpa.org/articles/cpa-now-blog/cpa-now/2016/04/18/patent-trolling-what-it-is-and-why-it-is-important-to-cpas

Congress. (2012). H.R.3261 – Stop Online Piracy Act. Retrieved from https://www.congress.gov/bill/112th-congress/house-bill/3261

Congress. (2014). H.R.3309 – Innovation Act. Retrieved from https://www.congress.gov/bill/113th-congress/house-bill/3309

Cornell University Law School. (2010). 17 U.S. Code § 512 – Limitations on liability relating to material online. Retrieved from https://www.law.cornell.edu/uscode/text/17/512

Goodlatte, B. (2016). Reform of the U.S. Copyright Office. House of Representatives: Judiciary Committee. Retrieved from https://judiciary.house.gov/wp-content/uploads/2016/12/Copyright-Reform.pdf

Goodlatte, B. (2017). Goodlatte announces agenda for 115th Congress. House of Representatives: Judiciary Committee. Retrieved from https://judiciary.house.gov/press-release/goodlatte-announces-agenda-115th-congress/

Griffin, J. (2014). Patent trolls’ hefty tolls: Lawmakers target shell companies that threaten small businesses with bogus claims of patent violations. State Legislatures, 10, 28-31.

Quinn, G. (2015). Mixed reviews for the PATENT act in the senate. IPWatchdog. Retrieved from http://www.ipwatchdog.com/2015/05/04/mixed-reviews-for-the-patent-act-in-the-senate/id=57457/

Robertson, A. (2013). House of Representatives passes widely supported bill to fight patent trolls. The Verge. Retrieved from http://www.theverge.com/2013/12/5/5177802/house-of-representatives-passes-goodlatte-patent-troll-act

Wortham, J. (2012). Public outcry over antipiracy bills began as grass-roots grumbling. New York Times. Retrieved from http://www.nytimes.com/2012/01/20/technology/public-outcry-over-antipiracy-bills-began-as-grass-roots-grumbling.html?pagewanted=1&ref=technology

Yoder, C. (2012). A Post- SOPA (Stop Online Piracy Act) shift in international intellectual property norm creation. Journal of World Intellectual Property15 (5/6), 379-388.

[1] See Gene Quinn, Goodlatte pledges to pursue patent litigation reform, copyright reform in 115th Congress, IPWatchdog, (2017), http://www.ipwatchdog.com/2017/02/01/goodlatte-patent-litigation-reform-copyright-reform/id=77879/

[2] A patent troll is defined by Chief Judge Rader as “any party that attempts to enforce a patent far beyond its actual value or contribution to the prior art.”  See Peter Calcara, Patent trolling: What it is and why it is important to CPAs, (Apr. 18, 2016), https://www.picpa.org/articles/cpa-now-blog/cpa-now/2016/04/18/patent-trolling-what-it-is-and-why-it-is-important-to-cpas

[3] See Bob Goodlatte, Goodlatte announces agenda for 115th Congress. House of Representatives: Judiciary Committee, (2017), https://judiciary.house.gov/press-release/goodlatte-announces-agenda-115th-congress/

[4] “The Copyright Office should also add several positions to advise the Register including a Chief Economist, Chief Technologist, and a Deputy Register.” See Bob Goodlatte, Reform of the U.S. Copyright Office, House of Representatives: Judiciary Committee, (2016), https://judiciary.house.gov/wp-content/uploads/2016/12/Copyright-Reform.pdf

[5] See H.R.3261

[6] “Some parts of the legislation, for example, would hold search engines that led their users to pirated content liable for infringement … permitted internet service providers (ISPs) to remove allegedly infringing websites from the domain name system.”  See Christain Yoder, A post- SOPA (Stop Online Piracy Act) shift in international intellectual property norm creation. Journal of World Intellectual Property, 15(5/6), (2012)

[7] See 17 U.S. Code § 512.

[8] See Jenny Wortham, Public outcry over antipiracy bills began as grass-roots grumbling, New York Times, (2012), http://www.nytimes.com/2012/01/20/technology/public-outcry-over-antipiracy-bills-began-as-grass-roots-grumbling.html?pagewanted=1&ref=technology

[9] See H.R. 3309.

[10] Shell companies are generally identified as “companies that don’t manufacture anything but hold a number of patents … sending threatening letters to companies claiming they have been violating one or more of their (often vaguely defined) patents.”  See Jonathan Griffin, Patent trolls’ hefty tolls: Lawmakers target shell companies that threaten small businesses with bogus claims of patent violations, State Legislatures, 10, (2014).

[11]  “… language in the proposed legislation does not so limit stays … The concern consistently raised by the Innovation Alliance is that anyone could be a customer, including large corporations.” See Gene Quinn, Mixed Reviews for the PATENT Act in the Senate, IPWatchdog, (2015), http://www.ipwatchdog.com/2015/05/04/mixed-reviews-for-the-patent-act-in-the-senate/id=57457/

[12] In 2011, Obama signed the Leahy-Smith America Invents Act, which shifted patent right permissions in the U.S. from a first-to-invent system to first-to-file.

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