Before getting into all the exciting copyright and patent issues we’ll see this year, let’s do a brief review of five significant things that happened in the patent or patent-related world in 2017 (next week: copyright).
Confusion over USPTO leadership. In many ways, the year started out with mass confusion, including at the United States Patent and Trademark Office (USPTO). Many expected that the Director of USPTO under Obama, Michelle Lee, would exit when the Trump Administration took over in January 2017. Instead, reports surfaced in The Hill and Politico just before inauguration that Lee would remain in her position as director; IP Watchdog reported that Lee was refusing to resign or trying to revoke the letter of resignation that is customary for political appointees to issue after a Presidential election. In what can only be described as strange, the next several months resulted in mass confusion over exactly who was running things over at USPTO, with USPTO refusing to comment. Why on earth an agency would be unable to answer a simple, and important, question speaks to the utter confusion as well as lack of transparency that exists in the current Administration. Only after Freedom of Information Act (FOIA) requests were issued did USPTO actually acknowledge — nearly two months post-inauguration day — that Lee was still the Director of the agency. Oh, and then in a surprising turn of events, Lee then announced in June that she was resigning and in August, the Trump Administration nominated Andrei Iancu, who represented TiVo in patent litigation, to fill the top spot at USPTO.
Allergan pays Native American tribe to exploit sovereign immunity. I blogged about this back in September and am still shocked by the sheer craziness of Allergan’s actions here. Essentially, after having its patents challenged through the inter partes review system — a process where challengers can ask the United States Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) to invalidate bad patents — Allergan transferred its patents associated with the pharmaceutical drug, Restasis, to the St. Regis Mohawk Tribe and had the tribe exclusively license the patents back to Allergan. The pharmaceutical company paid the tribe $13.75 million dollars, and will continue to pay an addition $15 million each year of the patents’ validity. Why on earth would Allergan do this? Apparently, this is a new tactic to try to shield the patents from review by PTAB by exploiting the sovereign immunity granted to Native American tribes. While this action began in 2017, and resulted in the start of litigation and Congressional hearings, it is certainly an issue to watch in the coming year.
SCOTUS applies international exhaustion of patent rights. Back in 2013, SCOTUS heard a case about whether exhaustion of rights over copyrighted goods — the idea that the “first sale” of an object exhausts a rightholder’s rights to control or place further restrictions on the item — applies wherever the sale take place. In Kirtsaeng, SCOTUS ruled that publishers could not restrict the sale of textbooks sold in Thailand then imported into the United States for resale. In 2017, SCOTUS heard a similar case, this one applying in the patent context in Impression Products v. Lexmark Int’l. Again, SCOTUS found that international exhaustion of rights applied and the first sale of a patented product anywhere in the world exhausts the patent holder’s rights over that object. While this case is significant in itself from a patent perspective, dicta from this case may also have some impact on copyright issues, as well, in the context of technological protection measures, or “digital locks.”
SCOTUS changes venue rules. In TC Heartland v. Kraft Food Brands Group, SCOTUS unanimously (minus Justice Gorsuch, who took no part in the case) overturned a long-held practice that patent holders exploited with respect to filing infringement suits. Previously, patent holders had grown accustomed to forum shopping, filing infringement litigation in patent-friendly venues, most notably the District Court for the Eastern District of Texas. SCOTUS said “no more,” and held that patent cases must be brought where the accused infringer is incorporated or has a regular, established place of business.
Shake-up in the House Judiciary Committee Leadership. In November, Representative Bob Goodlatte (R-VA), Chair of the House Judiciary Committee, announced that he would not run for reelection in 2018. This announcement has led to much debate on who will be the next Chair of the committee that oversees intellectual property matters. Congressman Darrell Issa (R-CA) is a natural name that has come up due to his seniority on the committee and deep interest in addressing patent troll issues, but he barely held onto his seat in 2016 and could face difficulty in his 2018 reelection campaign. Meanwhile, on the other side of the aisle, former Congressman John Conyers (D-MI) and Ranking Member of the Judiciary Committee stepped down from his leadership role, then retired amidst sexual harassment allegations. As a result, the Democrats were forced to caucus and elect a new ranking member. While Representative Jerry Nadler (D-NY) was next in line, Representative Zoe Lofgren (D-CA) also threw her hat in the ring. Ultimately, the Democrats went with Nadler, who has issued previous statements about the impact of bad patents.