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IP Protection For Schedule I Substances: Trade Secret Law Supplements In The Cannabis Industry

IP Protection For Schedule I Substances: Trade Secret Law Supplements In The Cannabis Industry

By: Cinder Cancilla

The protection of intellectual creations afforded by the law of Intellectual Property is comprised of the following four categories: patents, copyrights, trademarks, and trade secrets.[1] IP law aims to encourage a creative and innovative climate by balancing public interests with those of the innovators.[2] However, this balancing of interests becomes problematic when an inventor or producer is in the industry of Cannabis, where it is legal under State law but remains illegal under Federal law.[3] Fortunately, State-governed trade secret laws provide an alternative route of access to protection for those innovators’s intellectual creations in the Cannabis industry.

Under trade secret law, almost anything may qualify for protection as long as it has the potential to yield commercial value,[4] regardless of novelty.[5] Coca-Cola’s claim to “the world’s most guarded secret” is a famous example of where protection under trade secret law is favored over patent law; had Coca-Cola patented their recipe rather than keeping it a secret, exclusive use would be limited to merely twenty years.[6]

Categorically, trade secrets are fundamentally distinct because liability does not arise from mere appropriation like it does with patent, copyright, and trademark law.[7] Instead, liability under trade secret law requires the misappropriating party wrongfully acquire, disclose, or use an innovation that is, in fact, a secret.[8]  Secrecy need not be absolute, as disclosure may be necessary to exploit the innovation for commercial value.[9] However, reasonable precautions of preventing disclosure are necessary.[10] In the context of trade secret law, the term ‘wrongful’ may include a breach of contract (such as an employment contract), theft, bribery, misrepresentation, or a violation of some other confidential relationship.[11]

If we apply the principles of trade secret law to the cannabis industry, keeping in mind that it is an industry that is and has been largely criminalized for some time, it becomes clear that one’s good will and pedigree are critical to promoting new products or services, and to distinguishing between existing products or services.[12] In a landscape of vast products and services constantly emerging and evolving, intellectual property that the creators and inventors might seek to protect include: methods of treatment or application of cannabis products to one’s person; recipes for cannabis infused edible products; THC, CBD, and other chemical extraction techniques; consumption methods; indoor/outdoor growing processes[13]; customer lists; preferred vendors; business plans; or a variety of other proprietary information.[14] These products or services may be protected under state trade secret law where other categories of IP law can’t under the Controlled Substances Act,[15] so long as they are kept secret, through means such as: employment contracts for those involved in the production or services; non-disclosure agreements with specific vendors or retailers; or perhaps concealing access to greenhouses. Creators and inventors in the cannabis industry might also consider connecting their secret information with other materials, such as marketing collateral, apparel and accessories, etc., as additional means of placing intellectual products into commerce[16] to potentially bolster their ability to enforce protection of their products or services.

At the heart of trade secret laws are relationally specific duties.[17] As long as precautions preventing disclosure are reasonable under the circumstances, creators and innovators, i.e. those in the Cannabis industry, may protect their intellectual products from unauthorized use under trade secret laws. Accordingly, it is critical for those in the Cannabis industry to determine whether protecting their intellectual products under trade secret law is a practical alternative to the other categories of intellectual property that cannot provide adequate protection.

 

[1] https://www.law.cornell.edu/wex/intellectual_property.

[2] https://www.wipo.int/about-ip/en/.

[3] 21 U.S.C.A. § 841(a)(1) (West through P.L. 115-231).

[4] Cal. Civ. Code § 3426.1 (West current with all laws through Ch. 1016 of 2018 Reg. Sess., and all propositions on 2018 ballot).

[5] Robert G. Bone, A New Look at Trade Secret Law: Doctrine in Search of Justification, 68 Calif. L. Rev. 241 (1998) [hereinafter A New Look] (introduction to trade secrets).

[6] Alison Malsbury, Now is the Time to Identify and Protect Your Cannabis Trade Secrets, Canna Law Blog (June 12, 2018), https://www.cannalawblog.com/now-is-the-time-to-identify-and-protect-your-cannabis-trade-secrets/.

[7] A New Look, supra.

[8] Cal. Civ. Code § 3426.1 (West current with all laws through Ch. 1016 of 2018 Reg. Sess., and all propositions on 2018 ballot).

[9] A New Look, supra.

[10] Cal. Civ. Code § 3426.1 (West current with all laws through Ch. 1016 of 2018 Reg. Sess., and all propositions on 2018 ballot).

[11] A New Look, supra.

[12] Nicole Grimm, George Lyons III, and Brett Scott, Protect Your IP, Cannabis Business Times (July 11, 2018), https://www.cannabisbusinesstimes.com/article/protect-your-ip/.

[13] Nicole Grimm, George Lyons III, and Brett Scott, Protect Your IP, Cannabis Business Times (July 11, 2018), https://www.cannabisbusinesstimes.com/article/protect-your-ip/.

[14] Larry Sandell, What Cannabis Entrepreneurs Need To Know About Intellectual Property, Marijuana Moment (June 14, 2018), https://www.marijuanamoment.net/what-cannabis-entrepreneurs-need-to-know-about-intellectual-property/#your-business-secrets.

[15] 21 U.S.C.A. § 841(a)(1) (West through P.L. 115-231).

[16] Larry Sandell, What Cannabis Entrepreneurs Need To Know About Intellectual Property, Marijuana Moment (June 14, 2018), https://www.marijuanamoment.net/what-cannabis-entrepreneurs-need-to-know-about-intellectual-property/#your-business-secrets.

[17] A New Look, supra.

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Non-Appropriation in Space: A Surprisingly Old Dilemma with Patent Law

Non-Appropriation in Space: A Surprisingly Old Dilemma with Patent Law

A brief history on the need for patent reform as more nations and private entities enter space

By: Jessica Ramsey

            On January 27, 2017, the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies (the “Outer Space Treaty”) celebrated its fiftieth anniversary.[1] Arguably the most important body of space law with 89 signatory states[2], it is both shocking and predictable that the Treaty has never been amended.[3]

Why?

History explains. In October 1957, the U.S.S.R. successfully launched the first artificial satellite, Sputnik I, effectively initiating the Space Race.[4] The following July, the United States founded the National Aeronautics and Space Administration (“NASA”).[5] Less than a year later, the United Nations created the Committee on the Peaceful Uses of Outer Space (COPUOS).[6]

In 1967, COPOUS created the Outer Space Treaty, which was signed by over 50 nations amid the Cold War and global fear of nuclear weapons positioned in space.[7]  The Treaty is seventeen Articles of broad, cautionary language, warding against extending the arms race beyond the atmosphere.[8] Yet, because of its breadth, it has proven significantly more difficult to amend than to sign.

But here is where questions regarding patents in space likely began. Article II of the Outer Space Treaty explicitly states that space, including celestial bodies, “is not subject to national appropriation” by any means.[9]

Put bluntly, this is the precise opposite objective of a patent. Patents are territorial rights and almost every country has its own patent laws.[10] There are cooperative international systems like the Patent Cooperation Treaty (WIPO patents),[11] but these still do not remove the territorial nature of patents.[12]

Thus, the dilemma is revealed: patent law only provides protection in the territory of the country the patent is filed within. Even international patent laws require the territory be under control of a party state.[13] If no one country can control any territory in space, how is the appropriate patent law in space determined?

In 2004, this question was considered in “Intellectual Property and Space Activities,” a WIPO issue paper.[14] The document explains reconciling patent and space law is important mostly because space activities are becoming increasingly privatized.[15] These non-governmental entities tend to be “more conscious of their ‘property,’” including intellectual property.[16] This, paired with increasing international cooperation and immense private investments required in space activities, heightened the need for “simple, uniform and reliable” IP laws.[17]

Yet, the Outer Space Treaty and both national and international IP laws remain largely unchanged.[18] The only United States code specifically regarding IP in space was enacted in 1990 and merely overlaid current patent laws onto the territory of outer space.[19] This rather cookie-cutter approach is not in alignment with the Outer Space Treaty’s stance on “no national appropriation” in space.[20]

As of 2019, it has been 61 years since the first artificial satellite launched into space and 51 years since the signing of the Outer Space Treaty.[21] COPUOS membership has risen from 18 to 92 member states.[22] The Cold War has ended, the Internet was created, and the world has reached new heights of globalization.

Yet, the dilemma remains. The faster people enter space; the faster inventions will be produced as problems are experienced and subsequently solved through technology. The more technology created in space, the higher the need for uniform patent laws.

How will territorial patent laws and non-appropriative space law be reconciled?

[1] Jonathan Lim, The Future of the Outer Space Treaty – Peace and Security in the 21st Century, Global Politics Review 4, Oct. 2018, http://www.globalpoliticsreview.com/publications/2464-9929_v04_i02_p072.pdf (last visited Feb. 17, 2019).

[2] Id.

[3] 18 U.S.T. 2410.

[4] Steve Garber, Sputnik and The Dawn of the Space Age, NASA, Oct. 10, 2007, https://history.nasa.gov/sputnik/ (last visited Feb. 17, 2019).

[5] Steven J. Dick, The Birth of NASA, NASA, Mar. 28, 2008, https://www.nasa.gov/exploration/whyweexplore/Why_We_29.html (last visited Feb. 17, 2019).

[6] Committee on the Peaceful Uses of Outer Space, United Nations Office for Outer Space Affairs,

http://www.unoosa.org/oosa/en/ourwork/copuos/index.html (last visited Feb. 17, 2019).

[7] 18 U.S.T. 2410.

[8] Id.

[9] Id.

[10] Protecting intellectual property rights (IPR) overseas, United States Patent and Trademark Office, Jul. 4, 2009, https://www.uspto.gov/patents-getting-started/international-protection/protecting-intellectual-property-rights-ipr (last visited Feb. 17, 2019).

[11] Inside WIPO: What is WIPO?, World Intellectual Property Organization, https://www.wipo.int/about-wipo/en/ (last visited Feb. 17, 2019)

[12] PCT FAQs: Protecting your Inventions Abroad: Frequently Asked Questions About the Patent Cooperation Treaty (PCT) (status on October 2017), World Intellectual Property Organization, https://www.wipo.int/pct/en/faqs/faqs.html (last visited Feb. 17, 2019).

[13] Id.

[14] Intellectual Property and Space Activities: Issue paper prepared by the International Bureau of WIPO, World Intellectual Property Organization, Apr. 2004, https://www.wipo.int/export/sites/www/patent-law/en/developments/pdf/ip_space.pdf (last visited Feb. 17, 2019).

[15] Id.

[16] Id.

[17] Id.

[18] 18 U.S.T. 2410; World Intellectual Property Organization, supra note 12.

[19] 35 U.S.C § 105 (1990).

[20] 18 U.S.T. 2410.

[21] Garber, supra note 4; 18 U.S.T. 2410.

[22] Committee on the Peaceful Uses of Outer Space: Membership Evolution, United Nations Office for Outer Space Affairs, http://www.unoosa.org/oosa/en/ourwork/copuos/members/evolution.html (last visited Feb. 17, 2019).

 

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Mind what you “like” on Facebook

Mind what you “like” on Facebook

By: Ali Mousavi

The connection between a person’s browsing history and his or her own state of health is too tenuous to support plaintiffs’ contention that the disclosure requirements of HIPAA or California Civil Code section 1798.91 apply in the Smith case.[1]

Facebook has been capturing and selling the details of users who browse third-party health sites.[2] Plaintiffs, Winston Smith and two Jane Does, alleged that Facebook violated numerous federal and state laws by collecting and using their browsing data from various healthcare related websites.[3] The suit names Facebook and seven cancer institutions as defendants.[4]

The suit alleges that Facebook’s use of tracking cookies means that any site with a “like” button can potentially send browsing data to Facebook. That includes the site they have visited, any pages within that site, and anything they might enter into the search bar.[5] Plaintiff Smith alleges that Facebook captured the information about his “likes” and sold the information without his consent.[6]

In determining consent, courts determine “whether the circumstances, considered as a whole, demonstrate that a reasonable person understood that an action would be carried out so that their acquiescence demonstrates knowing authorization.”[7] The court cited an excerpt of Facebook’s disclosure that explains its collection and use of information of a person who visits or uses a third-party website that in turn uses Facebook’s services, for example, the “like” button.[8] The Ninth Circuit’s reading of the disclosure is that a reasonable person viewing the pertinent part of the disclosure would understand that Facebook maintains the practices of “(a) collecting its user’s data from third-party sites and (b) later using the data for advertising purposes.”[9] Consequently, the court held that knowing authorization of these practices constitutes the plaintiff’s consent.[10] Therefore, the Ninth Circuit held that the district court properly dismissed the action due to the fact that knowledge is a consent.

Plaintiff also argued that the collected data is subject to more stringent disclosure requirement under the Health Information Portability and Accountability Act of 1996 (“HIPAA”).[11] The court rejected this argument stating that the connection between a person’s browsing history and his or her own state of health is too “tenuous” to be protected under HIPPA.[12] The court reasoning was that the information available on publicly accessible websites “stands in stark contrast” to the personally identifiable patient record and medical histories protected by the statute.[13]

What is left as an option for Smith and other Facebook users is to be mindful of what they “like” on Facebook.

 

[1]Smith v. Facebook, Inc., 745 F. App’x 8 at 9 (9th Cir. 2018).

[2] Emma Woollacott, Man Called Winston Smith Files Lawsuit Against ‘Big Brother’ Facebook, Forbes, Mar. 19, 2016, https://www.forbes.com/sites/emmawoollacott/2016/03/19/man-called-winston-smith-files-lawsuit-against-big-brother-facebook/#1217059c7e28 (last visited Mar. 10, 2019).

[3] Smith, 745 F. App’x 8 at 8.

[4] Woollacott, supra note 2.

[5] Woollacott, supra note 2.

[6] Woollacott, supra note 2.

[7] Smith, 745 F. App’x 8 at 8.

[8] Id.

[9] Id. at 8-9.

[10]Id. at 9.

[11] Id.

[12] Id.

[13] Id.

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Many Cannabis Entrepreneurs “Caught In The Weeds” When Trying To Protect IP

Many Cannabis Entrepreneurs “Caught In The Weeds” When Trying To Protect IP

Written by: Danielle Keller 2L

The legal growth, distribution, and commercial sales of cannabis has created an opportunity for many entrepreneurs. However, experts in the industry note several barriers to obtaining protection along with some possible solutions. While it is not impossible to secure IP rights on cannabis-related inventions, there are a “number of factors to consider and a number of complexities.”[1] Some issues the industry is currently running into include:

  • Regulatory complexities: Many state laws that legalize the production and sale of cannabis products conflict with federal law which lists cannabis as a “Schedule 1” drug under the Controlled Substances Act, making possession of cannabis illegal.[2]
  • Troubles with Trademarking: Federal trademark protection is not achievable with the requirement that the thing sought to be trademarked must have a “lawful use in commerce” Under the Federal Trademark Act.[3]
  • Undeveloped Industry: The cannabis industry has been likened to the “wild west”[4] as the industry grows and businesses are working to establish broad protection of their products and processes in gaining a competitive advantage.
  • Patenting a Plant: As with any patent, the inventor bears the burden of proving that their cannabis plant is not a naturally occurring substance as is– rather, they have altered a natural substance so that the invention is new and novel. This is an added level of complexity as developer in this instance must show that the plant can be asexually reproduced.[5]

While this list is not exhaustive, there are certainly a number of factors to consider and a number of complexities to be aware of. Experts urge entrepreneurs to hire an IP attorney early on to navigate these complexities, and to assist in the development of an IP strategy. Businesses should also act fast to submit applications to the USPTO, “I always recommend applying for federal or state trademark registration at the outset of starting a cannabis business,” Jeffrey D. Welsh (founder of Frontera Law Group, a boutique law firm specializing in the legal cannabis industry). [6]

 

 

[1] Klein, Carly. “The Complicated Relationship Between IP Law & Cannabis.” IPWatchdog. Nov. 10, 2018. https://www.ipwatchdog.com/2018/11/10/complicated-relationship-ip-law-cannabis/id=102941/

[2] Klein, Carly. “The Complicated Relationship Between IP Law & Cannabis.”

[3] Malsbury, Alison. “The Anatomy of a Cannabis Trademark TTAB Decision.” Cannalawblog. June 16, 2018. https://www.cannalawblog.com/the-anatomy-of-a-cannabis-trademark-ttab-decision/

[4] Hasse, Javier. “Protecting Your IP Is (No Surprise) Even Harder in the Cannabis Business.” GreenEntrepreneur. Jan. 2, 2019. https://www.greenentrepreneur.com/article/324845

[5] Klein, Carly. “The Complicated Relationship Between IP Law & Cannabis.”

[6] Hasse, Javier. “Protecting Your IP Is (No Surprise) Even Harder in the Cannabis Business.”

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Supreme Court Considers When a Copyright Has Been Legally Registered

Supreme Court Considers When a Copyright Has Been Legally Registered

By: Shreya Tewari

            The Supreme Court heard oral argument on January 8, 2019 for Fourth Estate Public Benefit Corp. v. Wall-Street.com. This case asks The Court to decide when the “registration of [a] copyright claim has been made in accordance with [the United States Copyright Code outlined in Title 17].”[1] Copyright owners are allowed under the statute to bring an infringement claim once their copyright claim has been registered. There has long been a circuit split on whether that registration has occurred when the copyright holder has submitted the application, deposit, and fees to the Copyright Office (as the 5th and 9th Circuits have held), or whether it has occurred once the Copyright Office approves or rejects the copyright holder’s application (as held by the 10th and 11th Circuits).[2]

 

The petitioner in the case, Fourth Estate, is a membership-based organization that promotes free press and licenses journalistic work that is posted to different online sites.[3] The licensing agreement requires websites that post their materials and articles to remove them upon canceling their subscription with the organization.[4] Wallstreet.com had posted articles from Fourth Estate to their website during the course of their membership and failed to remove the articles upon cancellation.[5] Fourth Estate filed applications to register the copyrights of hundreds of their articles and shortly after, filed a copyright infringement claim against Wallstreet for the articles not taken down.[6] The district court dismissed this claim on the grounds that the copyrights were not registered within the meaning of the statute because they had not been approved before the claim was filed.[7] The 11th Circuit affirmed this decision.[8]

 

The Supreme Court is now called to settle the conflict in the competing interpretations of the statute. The oral advocate for the petitioners made the case that the purpose of the statute is to encourage the registration of copyrights and should thus be read to protect the rights of those who have gone through the procedure of registration.[9] If Congress’ goal was to promote official registration of copyrights, that goal has been met with the filing of the application.[10] The argument focused on the burdens copyright holders would face if they had to wait for their application to be processed before being able to seek any remedy for infringement, given that the processing can take months.[11] The United States and the advocate for Wallstreet argued that there were statutory exceptions designed to address the issue of a delay in infringement removal so the meaning of the statute itself had to be something that would account for those exceptions.[12]

 

In anticipation of the Supreme Court’s opinion on this case, it is worth considering the implications of either decisional possibility. If the Supreme Court decides that the copyright application must be processed in order to file an infringement suit, the effect on copyright holders will be massive. There will either be more pressure to try and pay for an expedited application process, disadvantaging copyright owners who cannot pay higher fees, or there will be increased litigation about which copyrights fall within the statutory exceptions designed for infringement enforcement without delay. If the Court decides that the only the application must be filed, the potential for infringement liability will continue to grow as the speed of innovations, inventions, and developments in the technical world continues to grow as well, potentially opening the door to future issues about how infringement liability will interact with the integration of artificial intelligence and other new technologies into more and more aspects of mainstream life. There will always be a potential issue as to whether the increased scope for infringement liability, given the case that a copyright does not have to rejected or approved to file for infringement, is suppressing open development and technological progress and whether that will impede on other rights or aspects of life.

 

————————————————————-

Update (March 11, 2019):

 

On March 4, 2019, Justice Ginsburg delivered the unanimous opinion of Fourth Estate affirming that a copyright owner cannot file suit until the Copyright Office has finished registering the application. The Court relied on the reasoning that other sections of the governing statute, § 411, would be unnecessary if the word “register” only meant filing the application and not waiting for the Copyright Office to actually finish registering it. The statute, in relevant part, outlines an exception that allows a copyright suit after the registration of a copyright has been refused which would be unnecessary if a copyright owner could sue right after filing. Therefore, copyright owners must now wait for action by the Copyright Office before bringing suit.

 

 

[1] 17 U.S.C.A. § 411(a) (Westlaw through through P.L. 115-281. Also includes P.L. 115-283 to 115-333, and 115-335 to 115-338. Title 26 current through P.L. 115-442.

[2] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[3] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[4] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[5] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[6] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[7] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[8] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

[9] Jessica Litman, Argument analysis: Justices wade deep into the copyright weeds, SCOTUSblog (Jan. 9, 2019, 10:14 AM), https://www.scotusblog.com/2019/01/argument-analysis-justices-wade-deep-into-the-copyright-weeds/

[10] Jessica Litman, Argument analysis: Justices wade deep into the copyright weeds, SCOTUSblog (Jan. 9, 2019, 10:14 AM), https://www.scotusblog.com/2019/01/argument-analysis-justices-wade-deep-into-the-copyright-weeds/

[11] Jessica Litman, Argument analysis: Justices wade deep into the copyright weeds, SCOTUSblog (Jan. 9, 2019, 10:14 AM), https://www.scotusblog.com/2019/01/argument-analysis-justices-wade-deep-into-the-copyright-weeds/

[12] Jessica Litman, Argument preview: When has registration of a copyright claim “been made”?, SCOTUSblog (Jan. 3, 2019, 10:10 AM), https://www.scotusblog.com/2019/01/argument-preview-when-has-registration-of-a-copyright-claim-been-made/

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9th Circuit Decision to Overturn Jury Verdict in “Stairway to Heaven” Case

9th Circuit Decision to Overturn Jury Verdict in “Stairway to Heaven” Case

Written by: Abbie Lueken 2L

The 9th circuit has reversed a jury verdict in favor of Led Zeppelin for their alleged copyright infringement of the song “Taurus” by the band Spirit. According to copyright lawyer Rick Sanders, the reason for the reversal was the lack of a jury instruction that the parties agree should have been included.[1]

The jury instruction should have included a part about what to do with a work that is comprised of unprotectable elements.[2] According to the 9th circuit, “a combination of unprotectable elements is eligible for copyright protection only if those elements are numerous enough and their selection and arrangement original enough that their combination constitutes an original work of authorship.”[3]

On the issue of selection and arrangement, Led Zeppelin argued that the only similarities between “Stairway to Heaven” and “Taurus” were elements that are unprotectable. The plaintiffs argued that even if the elements of the song are unprotectable, the selection and arrangement of them is original and “Stairway to Heaven” infringed on that original arrangement.[4]

The jury returned a verdict for Led Zeppelin, and Sanders believes the outcome would have been the same even with the jury instruction.[5] The jury found that the two songs “were not substantially similar under the extrinsic test.”[6] Copyright infringement requires copying and improper appropriation. The plaintiff attempted to prove access and similarity, but the jury ultimately found the proof to be insufficient. Given the complexity and subjectivity of copyright law, the lack of jury instruction seems to be reasonable grounds for a reversal, especially given the fact that both parties agreed that the instruction should have been included. However, the cost of litigating these cases makes the reversal a bit frustrating. It will be interesting to see what happens next in the case.

______________________________________________________________________________

[1] Sanders, Rick. “Can’t Wish Away The Mistakes In The Original ‘Stairway to Heaven’ Verdict.” TechDirt. October 16, 2018. https://www.techdirt.com/articles/20181012/17372140824/cant-wish-away-mistakes-original-stairway-to-heaven-verdict.shtml.

[2] Id.

[3] Satava v. Lowry, 323 F.3d 805, 811 (9th Cir. 2003).

[4] Sanders, Cant’ Wish Away.

[5] Id.

[6] Skidmore v. Led Zeppelin, No. 2:15-cv-03462-RGK-AGR (C.D.C.A Sep. 28, 2018).

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Inconsistency in the Application of Patent Law

Inconsistency in the Application of Patent Law

Written by: McKenzie Thomsen, 2L

Consistency is one of the founding principles of the United States’ system of law. The rule of law requires “law be applied equally, without unjustifiable differentiation.”1 The Patent and Trademark Office [PTO] and Patent Trial and Appeals Board [PTAB] use guidelines and precedent as standards for granting and reviewing validity of patents. The guidelines however, should be under some scrutiny for their inconsistent application. This inconsistency has heightened in the past few months.
Most recently, on Tuesday October 9, 2018, SSL Services LLC [SSL] asked the Supreme Court to review section 325(d) of the Patent Act, the Multiple Proceedings rule.2 The Multiple Proceedings Rule states that the PTAB “may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.”3
SSL’s patent for a system establishing virtual private networks previously survived nine validity challenges, but lost the tenth challenge brought by Cisco Systems, Inc. [Cisco]. Cisco challenged the patent’s validity using references that were used in previous re-examinations. SSL argued that under the Multiple Proceedings rule, the challenge should be rejected because the prior art references were used in previous validity challenges. However, the court allowed the challenge using these references reasoning that Cisco was not part of the previous examinations and Cisco was challenging claims that were previously unchallenged. Upset with the outcome, SSL petitioned for writ of certiorari stating, “The board’s multifactor standard for applying section 325(d) has resulted in no workable standard at all, thus producing inconsistent outcomes.”4

The Multiple Proceedings rule is applied discretionarily and thus easily applied inconsistently as SSL argues happened in its lawsuit.
Further, on September 24, 2018, the Federal Circuit found against inventor, Hyatt, and upheld the section of the Manual of Patent Examining Procedure [MPEP] that allows the patent office to reopen prosecution after an appeal and reject claims.5 Hyatt filed an appeal to the PTAB when the PTO decided to reopen prosecution. It was rejected, and Hyatt filed suit against the PTO asking for the repeal of said section of MPEP, stating “An examiner’s decision not to reopen prosecution is another condition that must be satisfied before an appeal reaches the board…

These conditions on the PTAB reaching the merits of an appeal do not conflict with the requirement that the PTAB reviews rejections.”6

When a patent is reopened the appeal ends and the case returns to the patent examiner and the prosecution phase. The rate at which prosecutions are reopened varies and is “highly dependent on individual examiners.”7 The ability to reopen prosecutions indefinitely can wear down an inventor, especially considering that getting a patent costs tens of thousands of dollars and so being drawn back into prosecution can be a worst-case scenario for many inventors and even end the pursuit of getting a patent.

Again, the application of the law of patent’s is inconsistent because it is too discretionary.
These are but two examples of allegations against the PTO and PTAB alleging inconsistent application of patent law. Unless the patent law system can justify the inconsistent application of its law, these cases show that the system is in danger of not being in line with the longstanding public policy of consistency that shields citizens from an unfair system of law.

__________________________________________________________________________
1 Karen Steyn, Consistency – A Principle of Public Law?, Judicial Review (May 1, 2015), https://doi.org/10.1080/10854681.1997.11426924
2 Matthew Bultman, Justices Urged to Mull Repeat Patent Challenges Under AIA, Law360 (Oct. 10, 2018), https://www.law360.com/ip/articles/1090719/justices-urged-to-mull-repeat-patent-challenges-under- aia?nl_pk=d73da8e3-976b-4657-afe0- 0dd35cb81961&utm_source=newsletter&utm_medium=email&utm_campaign=ip
3 35 USC § 325(d) (2012).
4 Matthew Bultman, Justices Urged to Mull Repeat Patent Challenges Under AIA, Law360 (Oct. 10, 2018), https://www.law360.com/ip/articles/1090719/justices-urged-to-mull-repeat-patent-challenges-under- aia?nl_pk=d73da8e3-976b-4657-afe0- 0dd35cb81961&utm_source=newsletter&utm_medium=email&utm_campaign=ip
5 Matthew Bultman, Fed. Circ. Preserves Rule Inventors Say Can Be A Burder, Law360 (Oct. 5, 2018),
https://www.law360.com/articles/1089917/fed-circ-preserves-rule-inventors-say-can-be-a-burden?nl_pk=d73da8e3- 976b-4657-afe0-0dd35cb81961&utm_source=newsletter&utm_medium=email&utm_campaign=special
6 Id.
7 Id.

Merging Man and Machine

Written By: Sachin Patel

The intersection of man and machine is a reoccurring theme in sci-fi films, but one may wonder if these stories are tales written to entice curious minds about the great unknown, or is it actually futuristic foreshadowing? Tesla CEO Elon Musk is a believer in the latter. Over the past few years Musk has discussed the idea of humans “merging” with machines in the near future as a way to ensure that humans are not rendered obsolete.[1] Unlike the creative minds of Hollywood whose scientific feat stops at their pen, Musk has been devising ways to make his idea reality. To do this, Musk plans to use a “neural lace” which integrates AI in the human brain. This would allow users to communicate their thoughts to computers at incredibly fast speeds.[2] If this can in fact be achieved, it would lead humans farther along the spectrum of innovation and advancement to a place where we can compete with AI on a more leveled plane. Continue Reading

What’s Really Being Watched When You Turn on Your TV

Written By: Jennifer V. Nguyen

In 2015, ProPublica, an independent newsroom that produces investigative journalism in the public’s interest, published an article regarding TV manufacturer Vizio’s data collecting practices. [1] The Federal Trade Commission (“FTC”) brought a suit against Vizio, which settled last week (February 6, 2017) for $3.7 million ($1.5 to the FTC and $2.2 million to New Jersey). [2] Continue Reading

A Gene-Editing Patent Dispute – What Does It Mean?

Written By: Charles Cheng

Is this just another ordinary patent dispute? Time will tell. A high profile patent dispute between the University of California, Berkeley and the Broad Institute of MIT and Harvard has just concluded a year-long proceeding called interference proceeding at US Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB).[1] On February 15, 2017, PTAB announced its decision after both parties presented their oral arguments before a three-judge panel in December 2016.[2] The proceeding was to determine which party has actually “invented” a gene-editing technology called CRISPR-cas9.[3] Continue Reading