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T-Mobile-Sprint: Pro-competitive results despite a facially anticompetitive merger?

Written By: Chase Westin Laurent

With more than two-thirds of American households accessing the internet on mobile devices, wireless service providers are constantly looking for ways to remain competitive. [1] This has created a battle between major cell phone carriers to acquire competitors when feasible. Courts have blocked some of these previous merger attempts on the grounds that they violated Section 7 of the Clayton Act and decreased competition. [2] In contrast with previous rulings, on February 10, 2020, the United States District Court for the Southern District of New York approved the merger between two of the nation’s largest wireless carriers: T-Mobile and Sprint. [3]

Section 7 of the Clayton Act deems a merger anticompetitive and unlawful when it substantially lessens competition in “any line of commerce . . . in any section of the country.” [4] A prior case found a merger anticompetitive when it led to a market share exceeding thirty percent or when using an alternate measure of market concentration, a Herfindahl-Hirschman Index (“HHI”) increase of 200 points amounting to over 2,500 points. [5] Accordingly, thirteen states and the District of Columbia were able to establish a prima facie case, with T-Mobile expected to hold 37.8 percent of the market’s subscribers and increase its national HHI by 679 points to a total of 3186 points. [6] However, Sprint’s demise as a competitor, T-Mobile’s branding as the “disruptive Un-Carrier,” and DISH’s entry into the market led the court to rule in favor of the T-Mobile-Sprint combination. [6]

As a direct competitor, Sprint’s merger with T-Mobile would on its face decrease competition. [7] But, T-Mobile and Sprint’s management team, presented evidence that Sprint’s standing as a national competitor was soon to be gone. [8] Wireless carriers are constantly challenged with not only maintaining but also improving their network quality by way of either investments or cost-cutting. [9] Sprint’s history of eleven straight years of losses until 2017 and its current $37 billion dollars in debt disabled it from funding improvements by way of investments. [10] Thus, Sprint has turned to cost-cutting, leading to increased complaints regarding network quality, while AT&T, Verizon, and T-Mobile have shifted towards innovation and 5G. [11] This left Sprint with little chance at financial success in the future as customers  move towards the companies on top. [12]

In contrast, T-Mobile has seen almost a decade of successful rebranding and strategizing, which has attracted customers from its competitors. [13] Chief Executive Officer, John Legere, and his team implemented an innovative strategy: identifying and excluding features consumers disliked, such as two-year service contracts, fees for international roaming, and limits on data usage. [14] At prices lower than its competitors, T-Mobile began offering service plans without these undesirable features, greatly challenging AT&T and Verizon to similarly provide “pro-consumer packages.” [15] T-Mobile used the strategy as evidence that it seeks to further its image as the “Un-Carrier” with the merger and not to raise prices or curtail further innovation. [16]

Finally, T-Mobile argued that DISH’s entry into the market of wireless carriers, with nationwide 5G coverage expected by 2023, diminishes any effects of the 4-to-3 merger. [17] Merger Guidelines, though not binding upon the courts, require that a competitor’s entry into the market be timely, or “rapid enough to make unprofitable overall” anticompetitive practices, such as a merger. [18] The court ultimately found DISH’s entry into the market by 2023 timely when considering T-Mobile’s interest in remaining competitive during these three years by not raising prices for the sake of its brand and its consumers. [19]

As a result of the T-Mobile-Sprint merger, the “New T-Mobile” is set to compete with AT&T and Verizon. Whether consumers see the benefits of this merger in the coming years will likely depend on competitors enacting pro-consumer changes, DISH successfully entering the market, and T-Mobile continuing its successful brand strategy. Presuming these all take place, cell phone users will see increased network speeds and quality, more advanced technology, and ultimately lower prices in the near future. The merger’s approval, despite previous contentious rulings, might just work to benefit consumers and increase competition in contrast to its seemingly anticompetitive nature.

 

[1] Kurt Bauman, New Survey Questions Do a Better Job Capturing Mobile Use, UNITED STATES CENSUS (Aug. 8, 2018), https://www.census.gov/library/stories/2018/08/internet-access.html [https://perma.cc/DS43-DLNK].

[2] See, e.g., United States v. AT&T Inc., 541 F. Supp. 2d 2 (D.D.C. 2008); United States v. Phila. Nat’l Bank, 374 U.S. 321(1963).

[3] New York v. Deutsche Telekom AG, 2020 U.S. Dist. LEXIS 23716 (S.D.N.Y. Feb. 10, 2020).

[4] 15 U.S.C.S. § 18 (2019).

[5] Phila. Nat’l Bank, 374 U.S. at 364-66. See also Consol. Gold Fields PLC v. Minorco, S.A., 871 F.2d 252, 260 (2d Cir. 1989).

[6] Deutsche Telekom AG, 2020 U.S. Dist. LEXIS 23716 at *16-17.

[7] Id. at *60-61.

[8] Id. at *174.

[9] Id. at *99.

[10] Id. at *101-02.

[11] Id. at *99.

[12] Id. at *102.

[13] Id. at *29.

[14] Id. at *146.

[15] Id.

[16] Id. at *172-73.

[17] Id. at *145.

[18] Federal Trade Commission, Horizontal Merger Guidelines § 9.1 (Aug. 19, 2010).

[19] Deutsche Telekom AG, 2020 U.S. Dist. LEXIS 23716, at *136.

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Blackbox: Online voting in the 2020 elections

Written By: Michael Walsh

A Byte of Online Voting

Sorry, you cannot vote online in the primaries or in presidential elections this year. That is, unless you have been selected to participate in one of the few small-scale pilot programs, such as the DemocracyLive system in Seattle, Washington, the Voatz platform in West Virginia, or most recently, the Shadow voting tool used for the 2020 Iowa caucuses just a few weeks ago. [1] These voting tools use blockchain technology to generate a unique hash for each vote. [2] To mitigate the risk of election tampering, the votes are submitted, but not counted electronically. [3] Each electronic submission is verified with a printed version of the ballot, then the printed ballots are tallied to calculate the total number of votes. [4] These electronic systems are usually deployed in areas in which voter turnouts are low or voting is only possible by remote means. [5][6] Ideally, these types of services may help improve voter turnout in the United states—a country in which less than 56% of voting-age adults participated in the 2016 presidential election. [7]

There is little federal oversight for online voting infrastructure, but Congress allocated an additional $380 million for voting infrastructure and security improvements [8], and 85% of those funds are estimated by the U.S. Elections Assistance Commission to be used by states before the 2020 election. [9][10][11] Ideally, those funds will help to alleviate problems in areas with intermittent or low bandwidth internet connections, such as some of the precincts that experienced problems with the Shadow voting app during the 2020 Iowa caucuses. [12][13][14] Additionally, a slew of other bills has been introduced to help secure elections from (predominantly foreign) interference. [15] One amendment to the Help America Vote Act (“HAVA”) of 2002, passed in December 2019, allocated an additional $400 million to help secure voting infrastructure. [16][17] However, some experts indicate that modernizing and securitizing current voting infrastructure would cost nearly $2.5 billion, not considering recurring maintenance costs. [18] To modernize Pennsylvania’s infrastructure alone is estimated to cost upwards of $150 million, which accounts for nearly half of the total HAVA funds allotted from Congress. [19]

Election Security Concerns and the 2016 Election

The costs to establish secure voting infrastructure do not seem so exorbitant when considering voter trust. The year 2016 marked the first year in which Russian interference influenced the presidential elections. [20][21][22] This foreign interference happened not by meddling with voter infrastructure (which now usually verifies electronically submitted votes with paper ballots), but by alternative means such as phishing, distributed denial-of-service (“DDoS”), and denial-of-service (“DoS”) attacks. [23][24][25] Such interference in 2016 will certainly not be the last. [26][27] In a recent national survey that asked politicians about cybersecurity risks, “[f]orty percent said they’ve had an account compromised in a phishing attack. And 60% said they haven’t significantly updated the security of their accounts since 2016.” [28] Even without direct interference with voter infrastructure, threat actors can make a meaningful difference in the outcome of elections with phishing, DDoS and DoS attacks on other vectors including campaign email accounts or insecure servers used by political groups. In response, Microsoft and Google (the companies that provide the most popular email services in the nation) have been implementing security measures to prevent these attacks. Most countermeasures focus on implementing typical information security protections, such as multi-factor authentication, tokenization, and software-based mitigation techniques, such as spoofing and phishing detection. [29][30]

Experts still have many questions about the security and privacy of electronic voting systems, most particularly those that are completely paperless. [31][32][33][34][35] Nevertheless, some voting this year will be done in select states by phone or PC through the Voatz system (but with paper ballot verification). [36] Voatz uses blockchain technology paired with biometric data from users’ phones, such as face scans and fingerprints. Although this version of multi-factor authentication may alleviate fraudulent voting, it poses serious privacy concerns [37] and does not address other salient security risks of online voting, such as phishing, DDoS, and DoS attacks. Regardless, the future of voting is likely to be a digital one, as a recent study from University of Chicago found. The survey estimated that voter turnout could increase by several percentage points [38][39], a figure that could compound with the help of universally compatible voting technology.

 

[1] Emily S. Rueb, Voting by Phone Gets a Big Test, but There Are Concerns, THE NEW YORK TIMES (Jan. 23, 2020), https://www.nytimes.com/2020/01/23/us/politics/mobile-voting-washington.html [https://perma.cc/B2SR-NF88].

[2] Voatz, Frequently Asked Questions, https://voatz.com/faq.html [https://perma.cc/9RBS-6BK5].

[3] Id.

[4] Id.

[5] Emily Dreyfuss, Smartphone Voting Is Happening, but No One Knows if It’s Safe, WIRED (Aug. 9, 2018), https://www.wired.com/story/smartphone-voting-is-happening-west-virginia/ [https://perma.cc/JC2B-SYWF].

[6] Rueb, supra note 1.

[7] Drew Desilver, U.S. Trails Most Developed Countries in Voter Turnout, PEW RESEARCH CENTER (May, 21 2018), https://www.pewresearch.org/fact-tank/2018/05/21/u-s-voter-turnout-trails-most-developed-countries/ [https://perma.cc/4T3C-4JD4].

[8] The Impact of HAVA Funding on the 2018 Elections, U.S. ELECTION ASSISTANCE COMMISSION (2019), https://www.eac.gov/sites/default/files/paymentgrants/TheImpactofHAVAFundingonthe2018Elections_EAC.pdf [https://perma.cc/6KDW-RNEJ].

[9] Id.

[10] U.S Senate Committee on Rules and Administration Oversight of the Election Assistance Commission, U.S ELECTION ASSISTANCE COMMISSION (May 15, 2019), https://www.rules.senate.gov/imo/media/doc/EAC_Testimony.pdf [https://perma.cc/95VB-NA4H].

[11] Elizabeth Howard, Defending Elections: Federal Funding Needs for State Election Security, THE BRENNAN CENTER (July 18th, 2019), https://www.brennancenter.org/our-work/research-reports/defending-elections-federal-funding-needs-state-election-security [https://perma.cc/P7UC-8ZW4].

[12] Kevin Roose, The Only Safe Election is A Low-Tech Election, THE NEW YORK TIMES (Feb. 4, 2020), https://www.nytimes.com/2020/02/04/technology/election-tech.html, [https://perma.cc/2C8W-982G].

[13] Nick Corasaniti, Sheera Frenkel & Nicole Perlroth, App Used to Tabulate Votes is Said to Have Been Inadequately Tested, THE NEW YORK TIMES (Feb. 3, 2020), https://www.nytimes.com/2020/02/03/us/politics/iowa-caucus-app.html [https://perma.cc/B7TG-YJ2P].

[14] Keith Collins, Denise Lu & Charlie Smart, We Checked the Iowa Caucus Math. Here’s Where it Didn’t Add Up, THE NEW YORK TIMES (Feb. 14 2020), https://www.nytimes.com/interactive/2020/02/14/us/politics/iowa-caucus-results-mistakes.html [https://perma.cc/HH8N-DURV].

[15] S. 2669, 116th Cong. (2019); H.R. 1946, 116th Cong. (2019); H.R. 4990, 116th Cong. (2019).

[16] U.S. Election Assistance Commission, How Can The States Use the Funds?, U.S. ELECTION ASSISTANCE COMMISSION (Jan. 6, 2020)  https://www.eac.gov/how-can-states-use-funds-0 [https://perma.cc/79W6-WHYA].

[17] H.R. 1158 § 501, 116th Cong. (2019).

[18] Lawrence Norden and Edgardo Cortez, What Does Election Security Cost?, THE BRENNAN CENTER (Aug. 15, 2019), https://www.brennancenter.org/our-work/analysis-opinion/what-does-election-security-cost [ https://perma.cc/TL69-YCU2].

[19] Howard, supra note 11.

[20] U.S. Senate Committee 116th Congress, Report of the Select Committee on Intelligence United States Senate on Russian Active Measures Campaigns and Interference in the 2016 U.S. Election Volume 1: Russian Efforts Against Election Infrastructure With Additional Views, https://www.intelligence.senate.gov/sites/default/files/documents/Report_Volume1.pdf [https://perma.cc/CZ47-7XLY].

[21] Andy Greenberg, Feds’ Damning Report on Russian Election Hack Won’t Convince Skeptics, WIRED (Jan. 6, 2017), https://www.wired.com/2017/01/feds-damning-report-russian-election-hack-wont-convince-skeptics/ [https://perma.cc/2T8Q-YZR9].

[22] David E. Sanger and Catie Edmonson, Russia Targeted Election Systems in All 50 States, Report Finds, THE NEW YORK TIMES (July 25, 2019), https://www.nytimes.com/2019/07/25/us/politics/russian-hacking-elections.html [https://perma.cc/78SM-YVZ4].

[23] Andy Greenberg, Everything We Know About Russia’s Election-Hacking Playbook, WIRED (June 9, 2017), https://www.wired.com/story/russia-election-hacking-playbook/ [https://perma.cc/EAZ8-W5Z4].

[24] Shannon Bond, 2020 Political Campaigns Are Trying To Avoid A 2016-Style Hack, NAT’L PUB. RADIO (Jan. 28, 2020), https://www.npr.org/2020/01/28/799062773/2020-political-campaigns-are-trying-to-avoid-a-2016-style-hack [https://perma.cc/T2ER-KQ9U].

[25] Jeremey Ashkenas, Was It a 400-Pound, 14-Year-Old Hacker, or Russia? Here’s Some of the Evidence, THE NEW YORK TIMES (Jan. 26, 2017), https://www.nytimes.com/interactive/2017/01/06/us/russian-hack-evidence.html [https://perma.cc/U9CX-N829].

[26] Miles Parks, Russian Hackers Targeted The Most Vulnerable Part Of U.S. Elections Again, NAT’L PUB. RADIO (July 28, 2018), https://www.npr.org/2018/07/28/633056819/russian-hackers-targeted-the-most-vulnerable-part-of-u-s-elections-again [https://perma.cc/MR8E-3H3Q].

[27] Shannon Bond, Microsoft Says Iranians Tried To Hack U.S. Presidential Campaign, NAT’L PUB. RADIO(Oct. 4, 2019), https://www.npr.org/2019/10/04/767274042/microsoft-says-iranians-tried-to-hack-u-s-presidential-campaign [https://perma.cc/K9ST-T55N].

[28] Bond, supra note 24.

[29] Tom Burt, Protecting Democracy with Microsoft AccountGuard, MICROSOFT BLOG (August 20, 2018), https://blogs.microsoft.com/on-the-issues/2018/08/20/protecting-democracy-with-microsoft-accountguard/ [https://perma.cc/7MGY-MW5X].

[30] Lily Hay Newman, Google’s Giving Out Security Keys to Help Protect Campaigns, WIRED (Feb. 11, 2020), https://www.wired.com/story/google-free-security-keys-campaigns/ [https://perma.cc/4TN7-9SQ2].

[31] David Jefferson et al., What We Don’t Know About the Voatz “Blockchain” Internet Voting System (May 1, 2019), https://cse.sc.edu/~buell/blockchain papers/documents/WhatWeDontKnowAbouttheVoatz_Blockchain_.pdf [https://perma.cc/62H2-MQN4].

[32] Michael A. Specter et al., The Ballot is Busted Before the Blockchain: A Security Analysis of Voatz, the First Internet Voting Application Used in U.S. Federal Elections, Mass.  Inst. of Tech., https://internetpolicy.mit.edu/wp-content/uploads/2020/02/SecurityAnalysisOfVoatz_Public.pdf [https://perma.cc/89H7-XLP2].

[33] Abby Abazorius, MIT Researchers Identify Security Vulnerabilities in Voting App, MIT NEWS (Feb. 13, 2020), http://news.mit.edu/2020/voting-voatz-app-hack-issues-0213 [https://perma.cc/AA49-97FS].

[34] Robby Mook et al., Cybersecurity Campaign Playbook, HARV. KENNEDY SCHOOL BELFER CENTER (Nov. 2017), https://www.belfercenter.org/CyberPlaybook [https://perma.cc/82NN-KA57].

[35] Miles Parks, In 2020, Some Americans Will Vote On Their Phones. Is That The Future?, NAT’L PUB. RADIO (Nov 7, 2019), https://www.npr.org/2019/11/07/776403310/in-2020-some-americans-will-vote-on-their-phones-is-that-the-future [https://perma.cc/4W62-9TLS].

[36] Voatz, supra note 2.

[37] Jefferson et al., supra note 31.

[38] David Stone, West Virginia Was the First State to Use Mobile Voting. Should others follow? UCHICAGO NEWS (July 30, 2019), https://news.uchicago.edu/story/voting-mobile-devices-increases-election-turnout [https://perma.cc/NAF9-69B5].

[39] Anthony Fowler, Promises and Perils of Mobile Voting, U. OF CHI. (June 2019), https://cpb-us-w2.wpmucdn.com/web.sas.upenn.edu/dist/7/538/files/2019/06/Fowler_MobileVoting.pdf [https://perma.cc/6N8C-VQGZ].

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Who is responsible for fixing the e-commerce problem surrounding counterfeit products?

Written By: Laura Odujinrin

The Rise of E-commerce

E-commerce sites, like Amazon, eBay, and Etsy, provide huge opportunities for small and medium business (“SMB”) owners to reach customers and grow business in a way that would be nearly impossible with traditional brick and mortar. These e-commerce sites also allow consumers to choose from a much larger pool of products and producers to find exactly the product they are looking for.

In 2018, Amazon, the world’s largest e-commerce platform, [1] had nearly two million SMBs using its e-commerce marketplace platform to reach and sell to customers. [2] Those SMBs sold nearly 4,000 products per minute, [3] totaling $160 billion dollars in sales. [4] The e-commerce industry is only continuing to grow, with sales expected to reach nearly 15 percent of total retail spending and more than $4 trillion dollars in spending in 2020.” [5] But, with increased access, growth, and opportunity for business owners and consumers alike, comes a challenge: counterfeit products.

The Rise of Counterfeit Products

A counterfeit product is a product “made in imitation of something else with intent to deceive.” [6] In 2018, U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement seized 33,810 counterfeit products that violated intellectual property rights and were worth an estimated $1.4 billion dollars. [7] The number of seized counterfeit products has more than doubled since 2009, and the retail price of seized products has continued to increase year after year. [8]

Many counterfeiters advertise their counterfeit products using language [9] and images copied directly from the original product’s page, [10] leading to many consumers unknowingly purchasing counterfeit goods. To make matters worse, counterfeit goods, unlike authentic goods, often do not adhere to any health or safety regulations, which can lead to the purchase of potentially dangerous and life-threatening products. [11] For example, a CNN investigation found that a counterfeit version of a popular car seat sold on Amazon “broke into pieces in a 30-mph crash test …, failing to meet the basic standards set by U.S. regulators.” [12]

To make matters worse, the burden of finding and reporting counterfeit products currently falls on the small business owners themselves, costing them precious time and money. [13] While a few of the e-commerce sites, like Amazon, offer services to help manage counterfeit products, fighting the counterfeit problem is akin to a never-ending game of “Whack-a-Mole” for many business owners, who successfully get one counterfeit product taken down only to find a new one pop up days or weeks later. [14]

Government Action

E-commerce sites have largely avoided legal liability by claiming that because the copyright products are sold by third party sellers and not by the site itself, the site is protected because it is not the seller of the counterfeit product, but merely a marketplace provider. [15]

In early March of 2020, the House proposed a bi-partisan bill, the Shop Safe Act, which aimed at “address[ing] the problem of the sale of unsafe counterfeit goods by incentivizing [e-commerce] platforms to engage in a set of best practices for screening and vetting sellers and goods, penalizing repeat offenders, and ensuring that consumers have the best (and most accurate) information available to them when they make their online purchases.” [16] The statute would provide clarity where case law has remained obscure, namely addressing the question of “when a platform can be held contributorily liable,” [17] by ensuring that e-commerce platforms who follow the Shop Safe Act’s best practices will not be held legally liable.

Problem Solved?

The Shop Safe Act is a great step in fighting the counterfeit products problem, but since it only pertains to “goods that have a health or safety impact … on consumers,” [18] it leaves many SMB owners, like  artists, creators, and designers whose products do not pose a threat to consumer health or safety, left to grapple with the problem on their own. Whether the Shop Safe Act or other programs developed by the e-commerce sites themselves will help is left to be seen. If all the stakeholders, like the government, e-commerce platforms, business owners, and consumers, can work together to combat the problem, a solution to this ever-growing problem can hopefully be found.

 

[1] Pamela Boykoff & Clare Sebastian, Fake and dangerous kids products are turning up for sale on Amazon, CNN BUSINESS (Dec. 23, 2019, 8:25 AM), https://cnn.com/2019/12/20/tech/amazon-fake-kids-products/index.html [https://perma.cc/B2DY-9N9P].

[2] 2019 Amazon SMB Impact Report, AMAZON at 2, https://d39w7f4ix9f5s9.cloudfront.net/61/3b/1f0c2cd24f37bd0e3794c284cd2f/2019-amazon-smb-impact-report.pdf [https://perma.cc/F6Y9-VD33] (last visited Mar. 17, 2020).

[3] 2019 Amazon SMB Impact Report, supra note 2, at 7.

[4] Id. at 3.

[5] SHOP SAFE Act of 2020, 116th Cong., 2d Sess. (proposed Mar. 2, 2020).

[6] Counterfeit, MERRIAM-WEBSTER, https://merriam-webster.com/dictionary/counterfeit [https://perma.cc/KDU9-KVPC] (last visited Mar. 17, 2020).

[7] U.S. Customs and Border Protection Office of Trade, Intellectual Property Rights Fiscal Year 2018 Seizure Statistics, U.S. CUSTOMS AND BORDER PROTECTION at 6, https://www.cbp.gov/sites/default/files/assets/documents/2019-Aug/IPR_Annual-Report-FY-2018.pdf [https://perma.cc/N4J5-QVHW] (last visited Mar. 17, 2020).

[8] 2019 Amazon SMB Impact Report, supra note 2, at 7.

[9] SHOP SAFE Act of 2020, 116th Cong., 2d Sess. (proposed Mar. 2, 2020).

[10] Nicole Nguyen, Stolen Artwork Is All Over Amazon – And Creators Want The Company To Do Something About It, Buzzfeed News (Jan. 23, 2019, 12:02 PM), https://www.buzzfeednews.com/article/nicolenguyen/amazon-counterfeit-art-sellers-fakes-copyright-infringement [https://perma.cc/9FA7-G5P6].

[11] Boykoff & Sebastian, supra note 1.

[12] Id.

[13] Id.

[14] Id.

[15] Alan Rappeport, Lawmakers Propose Making E-Commerce Companies Liable for Counterfeits, The New York Times (Mar. 2, 2020), www.nytimes.com/2020/03/02/us/politics/counterfeits-bill-china-amazon.html [https://perma.cc/RWH6-7LXH].

[16] SHOP SAFE Act of 2020, 116th Cong., 2d Sess. (proposed Mar. 2, 2020).

[17] Id.

[18] Id.

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Patentability Considerations

Written By: Andrew Campbell Lee, Ph.D.

Practitioners must consider both the prior art [1] and the language [2] used in claims when preparing a patent application.  Patentable subject matter includes “any new and useful process, machine, manufacture, composition of matter, or any new and useful improvement thereof.” [3] While this language appears to have clear meaning in the engineering field for mechanical and electrical inventions, algorithmic inventions must be claimed with the Alice Corp. Pty. Ltd. v. CLS Bank Intern. decision in mind. [4]

Several court decisions impact the determination of what is patentable.  In Alice, the Supreme Court opined that abstract ideas, which are not themselves patent eligible, would not become patent eligible by “recit[ing] . . . generic computer components configured to implement the same idea.” [5] While several test constructs have been used to determine patent subject matter eligibility, [6] the two-part framework from Mayo was applied in Alice. [7]  The Mayo test includes (1) determining whether the claims are directed to ineligible subject matter (e.g., laws of nature, natural phenomena, and abstract ideas), and (2) if so, a subsequent determination must be made as to “what else is there in the claims before us.” [8]

For example, an inventor’s disclosure for a technique to keep law school students awake during lecture may include a method comprising: identifying a facial expression indicative of weariness; determining a metric based at least in part on the identified facial expression; and determining a change in lighting if the metric exceeds a predetermined threshold. [9] This process, as written, could be a thought exercise (e.g., looking at a crowd of people).  This claim would likely run into Alice issues, falling under either prong of the Mayo test.

The United States Patent and Trademark Office (“USPTO”) has provided some guidance in drafting claims with respect to subject matter eligibility. [10]  With the USPTO’s guidelines in mind, a claim may be crafted such as, for example: A method for automatically adjusting lights based on audience, the method comprising: generating image data, using imaging equipment, indicative of an image; determining, using control circuitry, a facial expression metric associated with the image and based on a plurality of reference templates; and generating, using the control circuitry, a control signal based on the facial expression metric for causing an actuator to articulate a lighting fixture. This claim avoids categorization as an abstract idea, the first prong of the Mayo test, because there is tangible input and output requiring more than a generic computer.  Further, if that same inventor describes training a neural network model to more accurately identify the weary students based on a dataset, the USPTO provides useful claim examples, including discussions, to help address these issues. [11]

 

[1] See 35 U.S.C.A. §§ 102-103 (West 2015) (regarding novelty and obviousness rejections based on prior art).

[2] See 35 U.S.C.A. § 112(b) (the claims must “particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention”).

[3] 35 U.S.C.A. § 101 (West 1952) (“whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title”).

[4] Alice Corp. Pty. Ltd. v. CLS Bank Intern., 573 U.S. 208, 226-27 (2014).

[5] Id. (reasoning that “the system claims are no different from the method claims in substance”).

[6] See State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (1998) (the machine or transformation test); see Bilski v. Kappos, 561 U.S. 593, 605 (2010) (which deemed the machine or transformation test of State Street a tool but not the “sole criterion”); see generally Daniel J. Burns, Patent Practice After Alice, 2016 WL 1595103, at 2 (March 2016) (providing an overview of patent practice following Alice).

[7] Alice, 573 U.S. at 217-18; see Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 77-80 (2012).

[8] Mayo, 566 U.S. at 77-78; see also Alice, 573 U.S. at 217-18.

[9] This claim is merely illustrative and has not undergone the 35 U.S.C. §§ 102-103 patentability analysis.

[10] See 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter “2019 PEG”); see also October 2019 Update: Subject Matter Eligibility (October 17, 2019), https://www.uspto.gov/sites/ default/files/documents/peg_oct_2019_update.pdf (addressing comments submitted regarding the 2019 PEG).

[11] Subject Matter Eligibility Examples: Abstract Ideas (January 7, 2019), https://www.uspto.gov/sites/default/files/documents/101_examples_37to42_20190107.pdf [https://perma.cc/T9TF-LXXJ] (see particularly Example 39 for training a neural network).

 

 

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Are designs used as a source identifier or purely functional?

Written By: Tabina Haider

In our ever-changing society, the fashion industry has found ways to not only keep up with change, but also facilitate it. High-profile designers, such as Gucci, Christian Louboutin, Yves Saint Laurent, and many others have created unique designs with source identifiers. A source identifier is a way for consumers to know which brand is responsible for the product. [1] Some examples of source identifiers are Gucci’s two “G’s,” Yves Saint Laurent’s “YSL” design, and Christian Louboutin’s signature red bottom shoe soles. However, there has been much controversy as to whether these designs serve exclusively as source identifiers or whether they are an aesthetic function.

There has been countless litigation involving aesthetic functionality. If a product feature is deemed functional in any way, it cannot serve as a trademark. [2] In contrast to utilitarian functionality, aesthetic functionality discusses how the look of the product feature serves a functional purpose. [3] Courts have struggled with the application of the doctrine, resulting in issued opinions which define, dispute, and contradict it.

Christian Louboutin red bottom shoe soles provide a great example. Is this design a source identifier or is there an aesthetically functional purpose? When YSL tried to make an all-red shoe, including the soles, Louboutin filed for trademark infringement. [4] YSL claimed having a red sole was functional because it served the function of creating a monochromatic shoe. [5] Even though Louboutin has a valid trademark for the red sole, it is not aesthetically functional because it is not necessary for the sole to be red. The court held it was necessary for the shoe sole to be red in order for YSL to achieve their desired monochromatic shoe. [6] Therefore, Louboutin lost its trademark rights for the red sole in monochromatic red shoes. [7]

Another example involves Glossier’s pink bubble wrap-linked zip-lock pouches which are used to market and sell its cosmetics. Every purchased product is packaged in this signature pouch. Glossier applied for a trademark to register the pink bubble wrap-linked zip-lock pouch, and the United States Patent and Trademark Office (“USPTO”) rejected the application due to the functional design of the packaging. [8] Glossier responded by asserting the bubble wrap is not a feature of the trademark, and it only sought rights in the specific pink color used for the packaging. [9] Because consumers associate the pink color of the bubble wrap and zip-lock bag combination with Glossier products, Glossier claims it can successfully obtain a trademark. [10] The USPTO is currently reviewing the Glossier case. [11]

The Ninth Circuit is expected to clarify the doctrine soon given the doctrine’s controversial and varying application on a case by case basis. [12] Clarity of the doctrine will be integral for companies owning rights to their own designs, strengthening the protections trademarks provide to fashion designers.

 

[1] it law wiki, https://itlaw.wikia.org/wiki/Source_identifier [https://perma.cc/X7RL-JQYJ].

[2] Qualitex v. Jacobson Products Co., Inc., 514 U.S. 159, 165 (1995).

[3] Christian Louboutin S.A. v. Yves Saint Laurent America Holdings, Inc., 656 F.3d 206, 219 (2d Cir. 2012).

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Forget a Logo, Glossier Says that Consumers Know Pink Pouches are Indicators of its Brand, THE FASHION LAW (January 28, 2020), https://www.thefashionlaw.com/home/in-new-trademark-filing-glossier-says-that-consumers-know-pink-pouches-are-indicators-of-its-brand [https://perma.cc/WK2X-PZTL].

[9] Id.

[10] Id.

[11] Id.

[12] David Bernstein, Kathryn Saba, & Emily R. Hush, Ninth Circuit Set to Clarify Aesthetic Functionality Doctrine, IP WATCH DOG (January 17, 2020), https://www.ipwatchdog.com/2020/01/17/ninth-circuit-set-clarify-aesthetic-functionality-doctrine/id=117980/ [https://perma.cc/4B4Y-JLN4].

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The Intersect Between Patents and Public Interest

Written By: Sophia Iams

In response to the novel coronavirus (COVID-19) outbreak, infecting over 193,000 individuals and contributing to over 7,800 deaths [1], the Chinese government is aggressively trying to stop the transmission of the disease and treat those infected. The Wuhan Institute of Virology and BrightGene, a Chinese drug manufacturer, raised concerns of potential circumvention or violation of the intellectual property rights of Gilead Sciences’ investigational drug, remdesivir. [2] Recent in-vitro studies demonstrate remdesivir is a potential treatment against COVID-19. [3]

China’s reputation for lax intellectual property protections in the pharmaceutical industry [4] has the current situation playing into those fears. From a patent application filed in 2016, Gilead is still waiting for a decision from the Chinese Patent Office for a patent protecting remdesivir. [5] On January 21, 2020, the Wuhan Institute of Virology applied for a “use patent” in China for remdesivir for its specific use in treating COVID-19. [6] On February 12, 2020, BrightGene issued a press release indicating the company started mass-producing the active ingredient in remdesivir and working on creating complete doses. [7]

These initial actions are concerning for a few reasons. First, if Wuhan Institute of Virology receives the patent, the Chinese government could use that to negotiate an unfair price for licensing rights from Gilead. [8] Wuhan Institute of Virology has also noted that it would attempt to use the Patent Cooperation Treaty (“PCT”) to export the manufactured drug to cooperating nations. [9] The PCT allows patent protection in many countries through a single “international” patent filing with the World Intellectual Property Organization. [10] Alternatively, the Chinese government could act within its rights under World Trade Organization rules to issue a compulsory license that would enable remdesivir’s use without Gilead’s consent. [11] A compulsory license is intended to allow the original patent holder and presumably the manufacturer to receive a licensing fee, raising the question of which organization will ultimately hold the patent in China. [12] In addition, now that the drug is manufactured by BrightGene, Gilead could be excluded completely. [13]

As of late-January, Gilead is working with various global health authorities, including Chinese health agencies, to perform experimental human clinical trials using remdesivir. [14] Two phase 3 trials have been initiated in Wuhan with the goals of enrolling 760 patients and obtaining preliminary results in April 2020. [15] The U.S. and international intellectual property community will closely monitor the Chinese government despite the previously improved cooperation between the U.S. and China. [16]

 

[1] World Health Organization (WHO), Novel Coronavirus (COVID-19) Situation, world health organization, https://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd [https://perma.cc/N5M7-AHGG] (last viewed Mar. 18, 2020).

[2] Angus Liu, Chinese firm copies Gilead’s remdesivir, the most promising drug against the new coronavirus, FiercePharma (Feb. 12, 2020, 10:28 AM), https://www.fiercepharma.com/pharma-asia/chinese-firm-copies-gilead-s-remdesivir-most-promising-drug-against-new-coronavirus [https://perma.cc/962V-7QMD].

[3] Manli Wang, Ruiyuan Cao, Leiki Zhang, Xinglou Yang, Jia Liu, Mingyue Xu, Zhengli Shi, Zhihong Hu, Wu Zhong & Gengfu Xizo, Remdesivir and chloroquine effectively inhibit the recently emerged novel coronavirus (2019-nCoV) in vitro, Nature (Feb. 4, 2020) https://www.nature.com/articles/s41422-020-0282-0 [https://perma.cc/5J8K-Z8UB].

[4] Max Nisen, China’s Drug Patent Grab Makes Coronavirus Scary for Pharma, Wash. Post (Feb. 6, 2020, 12:10 AM), https://www.washingtonpost.com/business/chinas-drug-patent-grab-makes-coronavirus-scary-for-pharma/2020/02/05/40dbfbf6-4844-11ea-91ab-ce439aa5c7c1_story.html [https://perma.cc/2QXJ-TCRW].

[5] Associated Press, China scientists want to patent Gilead drug to treat coronavirus patients, MarketWatch (Feb. 6, 2020, 1:44 AM), https://www.marketwatch.com/story/china-scientists-want-to-patent-gilead-drug-to-treat-coronavirus-patients-2020-02-06 [https://perma.cc/3DEJ-5RHQ].

[6] Nisen, supra note 4.

[7] Liu, supra note 2.

[8] Associated Press, supra note 5.

[9] Mary Erica D. Manuel, ‘Owning’ the Cure: Patent rights in the midst of an outbreak, BusinessWorld Online (Feb. 11, 2020, 10:53 PM), https://www.bworldonline.com/owning-the-cure-patent-rights-in-the-midst-of-an-outbreak/ [https://perma.cc/5LZ4-9AY3].

[10] World Intellectual Property Organization (WIPO), Protecting your Inventions Abroad: Frequently Asked Questions About the Patent Cooperation Treaty (PCT), World Intellectual Property Organization, https://www.wipo.int/pct/en/faqs/faqs.html [https://perma.cc/988E-QSZ8].

[11] World Trade Organization, Compulsory licensing of pharmaceuticals and TRIPS, World Trade Organization (Mar. 2018), https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm [https://perma.cc/D2EW-8ULH].

[12] Nisen, supra note 4.

[13] Id.

[14] Press Release, Gilead Sciences, Gilead Sciences Statement on the Company’s Ongoing Response to the 2019 Novel Coronavirus (2019-nCoV) (Jan. 31, 2020), https://www.gilead.com/news-and-press/company-statements/gilead-sciences-statement-on-the-company-ongoing-response-to-the-2019-new-coronavirus [https://perma.cc/V62K-N856].

[15] Liu, supra note 2.

[16] Id.

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23andMe: Who Can See Your Genes?

Written By: Kira Gill

I. Introduction

Beginning in the 1990s, the Information Age expanded upon the available molecular tools used for genetic research.  Accompanying this expansion of tools was a revolution and rise of systems biology. The development of genetic engineering allowed manipulation, creation, and reparation of genetic material and cellular behavior. [1] On October 1, 1990, a group of researchers started the Human Genome Project, an effort to sequence and map all of the human genome. [2] This project was completed in April 2003, taking almost 13 years which led to a complete genetic blueprint for building a human being. [3] Who knew that just three years later, 23andMe would come about, allowing for at-home genetic testing?

II. 23andMe

23andMe is a company founded in Silicon Valley which aims to use genetic testing to boost personalized healthcare and allow individuals to learn more about their heritage. [4] 23andMe charges $99 to customers to take a saliva test at home and receive information about the individual’s ancestry. [5] For $199, customers will not only receive ancestry traits, but also information of one’s health predispositions. [6] After 23andMe receives your sample, it takes just 2-3 weeks for the results to come back, compared to the 13 years it took for the Human Genome Project. [7] From human to human, the genes are about 99.5% the same; however, there are variants in the genome which include different genes passed down from parent to child. [8] 23andMe identifies the variants in the sample and analyzes them to find unique traits within the person. [9] Naturally, a plethora of legal issues have stemmed from this new technology.

III. Privacy Issues

There has been a long list of privacy issues which have occurred due to the highly accessible genetic information offered by 23andMe.  A few cases in particular pose more serious issues including sperm donors who were typically offered the option to remain anonymous. [10] Using 23andMe’s services, offspring of sperm donors have been able to track those who had wished to remain anonymous. [11] One woman violated her contract by trying to find her sperm donor through 23andMe. [12] She was successful, but the sperm bank ordered a cease-and-desist against her and revoked the use of the other gametes she had purchased from the same donor. [13]

Another issue that remains is the use of the DNA collected from at-home tests by police to match DNA samples in current cases. [14] Although these test results are extremely beneficial to the police for solving open cases within their database, for example, the Golden State killer, the use raises concerning issues. [15] A class action lawsuit was also filed against 23andMe in regard to the data being stored in a large database and its use by third parties. [16] Since the technology is so new and the development occurred so rapidly, there is not much legal precedent regarding genetics and privacy.

IV. Genetic Information Nondiscrimination Act of 2008

Currently, there is only one prominent law that regulates genetic privacy, the Genetic Information Nondiscrimination Act of 2008 (GINA). [17] GINA is a federal law which passed due to increasing concerns about the accessibility of genetic information. [18] GINA prohibits health insurance companies from requesting, requiring, or using genetic information to make decisions about an individual’s eligibility for health insurance. [19] Also, GINA prohibits employers from discriminating against their employees based upon their genetic information. [20] In essence, GINA only offers minimal protection as it applies only to health insurance and employment issues.

V. Conclusion

Overall the accessibility and publicity of private genetic information brings up a series of legal issues.  Per its advertisements, 23andMe has taken action by becoming FDA approved. [21] It also addressed privacy concerns by stating the genetic information is not given to other databases without explicit consent from consumers and cannot be taken by law enforcement unless demanded by a subpoena or court order. [22] The legislature has started intervening but has been limited to GINA thus far. As issues with genetic privacy continue, the legislature will have to adapt and balance the public interest of privacy, as well as the benefits that this data produces, such as steps towards personalized healthcare and cures to genetically predisposed diseases.

 

[1] D. Ewen Cameron, Caleb J. Bashor & James J. Collons, A brief history of synthetic biology, 12 Nature Rev.: Microbiology. 381, 381-90 (2014).

[2] The Human Genome Project, NATIONAL HUMAN GENOME RESEARCH INSTITUTE, https://www.genome.gov/human-genome-project [https://perma.cc/XQ5T-P5TQ].

[3] Id.

[4] 23andMe, https://www.23andme.com/howitworks/ [https://perma.cc/ZZ9G-FXKQ].

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.  

[10] Meghana Keshavan, ‘There’s no such things an anonymity’: With consumer DNA tests, sperm banks reconsider long-held promises to donors, Stat. (Sept. 11, 2019), https://www.statnews.com/2019/09/11/consumer-dna-tests-sperm-donor-anonymity/ [https://perma.cc/R3DT-YZAF].

[11] Id.

[12] Id.

[13] Id.

[14] Christi J. Guerrini, Jill O. Robinson, Devan Petersen & Amy L. McGuire, Should police have access to genetic genealogy databases? Capturing the Golden State Killer and other criminals using a controversial new forensic technique, 16 PLOS Biology1, 1-9, Oct. 2, 2018.

[15] Id.

[16] CBS News/AP, Class-action lawsuit filed against 23andMe over misleading marketing, CBS NEWS (Dec. 4, 2013, 12:32 PM), https://www.cbsnews.com/news/class-action-lawsuit-23andme/ [https://perma.cc/CZM5-RMRD].

[17] Genetic Discrimination, NATIONAL HUMAN GENOME RESEARCH INSTITUTE, https://www.genome.gov/about-genomics/policy-issues/Genetic-Discrimination [https://perma.cc/U55N-FPPV].

[18] Id.

[19] Id.

[20] Id.

[21] 23andMe, https://www.23andme.com/howitworks/ [https://perma.cc/ZZ9G-FXKQ].

[22] Id.

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Who owns posthumously released music?

Written By: Ciana Custino-Phillips

Musicians who write and produce their own music often copyright their work to have complete control over its use and profitability. Copyrights allow artists to distribute, perform, and publicly display their work and subsequently profit from the music they create while preventing others from using or reproducing their work. [1] Copyrighted material is protected for seventy years after the artist’s death; however, many questions tend to arise when artists pass away and have their music released posthumously. [2] This exact situation occurred recently when Malcolm James McCormick, known professionally as Mac Miller, tragically died in September 2018, in the height of his career, only weeks after his fifth studio album released. [3]

McCormick was an established rapper, singer, songwriter, and record producer. By the age of twenty-six, McCormick had amassed millions of fans and become known for championing the genre of melodic hip-hop on several of his gold-certified albums. [4] His death was shocking and unexpected, but his fans were even more surprised when McCormick’s sixth studio album was released posthumously on January 17, 2020, after his good friend and music-making partner, Jon Brion, finished producing the records Miller created prior to his death. [5] Although it is clear that McCormick owns all of the work that he released and copyrighted prior to his death, his most recent release begs the question, who has ownership of McCormick’s intellectual property and who will be receiving royalties from his posthumous album release?

Copyrights and royalties are considered personal property and after one’s death, personal property can be transferred through intestate succession or assessment in trusts or wills. [6] Trust and wills allow artists to distribute their assets to various types of beneficiaries including individuals, charities, or even museums. [7] If an artist has not created a will or trust, their property can be obtained by their spouses or blood-relatives through intestate succession. [8]

In this case, prior to McCormick’s death, he had made the responsible decision of putting his assets in a revocable trust. [9] Revocable living trusts are trusts that can be adjusted as needed throughout the creator’s lifetime and allow the trustor to transfer property to their beneficiaries. [10] Although there are rumors that McCormick left all of his assets to his mother, father, and older brother, there is no way for the public to be sure, since revocable trusts are private, as opposed to wills, which are accessible to the general public. [11] Wills are common among most people; however, musicians have been creating revocable trusts in place of wills with an increasing regularity. [12] It allows them to protect their assets, assign who will be in charge of their property after their death, alter the trust as their financial circumstances change, and keep their assets protected from the public. [13]

Unfortunately, McCormick’s music career was tragically shortened, but his fans can rest easy knowing that his estate is in the control of the people he hand-selected to control his career after his death. And thankfully, many artists are following in his footsteps by protecting their work through revocable trusts.

[1] 17 U.S.C. § 106 (2019).

[2] 17 U.S.C. § 302 (2019).

[3] Brendan Klinkenberg, Mac Miller Dead at 26, Rolling Stone (Sept. 7, 2018, 5:25PM), https://www.rollingstone.com/music/music-news/mac-miller-dead-at-26-720756 [https://perma.cc/C8NG-D6TV].

[4] Id.

[5] Craig Jenkins, ‘Oh My God, He’s Even Better Than I Thought’ Producer Jon Brion on the gutting task of completing Mac Miller’s final album after his sudden death, Vulture (Jan 21, 2020), https://www.vulture.com/2020/01/mac-miller-circles-jon-brion-interview.html [https://perma.cc/AP7B-7D8K].

[6] 17 U.S.C. § 201 (2019).

[7] Id.

[8] Id.

[9] Sara M. Moniuskzo, Mac Miller Left Behind A Will, But Who Will His Estate Go To, USA TODAY (Sept. 15, 2018, 1:29PM) https://www.usatoday.com/story/life/people/2018/09/15/mac-millers-left-behind-but-who/1316618002 [https://perma.cc/YH6H-SM8J].

[10] Greg Iacurci, Deceased rapper Mac Miller was 26 and had a will – similar to that of Michael Jackson, Investment News (Sept. 21, 2018), https://www.investmentnews.com/deceased-rapper-mac-miller-was-26-and-had-a-will-similar-to-that-of-michael-jackson-76162 [https://perma.cc/LQ7G-TVZX] .

[11] Id.

[12] Id.

[13] Id.

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The CCPA: What is it and what does it mean for consumer privacy?

Written By: Bryce Hoyt

Beginning on January 1, 2020, the California Consumer Privacy Act (“CCPA”) took effect, resulting in a flood of emails from corporations stating, “We’ve updated our privacy policy.” [1] The CCPA is the most comprehensive and far-reaching consumer privacy law to date, mimicking the European Union’s General Data Protection Regulation (“GDPR”). [2] For example, companies with $25 million in annual revenue or any company storing data on at least 50,000 people must comply or face a potential fine of up to $7,500 per record in violation. [3] Although CCPA is a state law, it applies to any business meeting the threshold requirement above, and that also does business in California or collects personal information on California residents. [4] This means that many companies outside California or even the United States are still mandated to comply if they do substantial business with California [residents].

A few key provisions of the act include prohibiting the sale of personal data on children under the age of 13 without parent authorization and requiring children between the ages of 13-16 to give affirmative consent themselves before collecting any data (also known as the “opt-in” requirement). [5] Additional provisions put more power in the hand of the consumer by allowing individuals to request full disclosure of the type of data the business collects, the category of third-party companies the data is sold to, and the purpose of selling said data. [6] One of the most unique provisions allows consumers to request all personal data relating to said individual to be permanently deleted from the company records and gives the right to a private cause of action for any violation (with exceptions). [7] These are just a few key aspects of the extensive requirements and guidelines set forth in the CCPA.

Privacy organizations and firms have started releasing CCPA “readiness assessment guides” to help advise companies and clients on how to comply with the sweeping changes to consumer privacy law. [8] Although the act lays out, in detail, many necessary changes companies must make to comply, some aspects remain ambiguous, such as what constitutes a data breach “cure”. Furthermore, it is unclear the degree of enforcement by the California Attorney General’s office. It appears only future litigation will answer the questions left open by the legislation—as of now, companies are diligently working to establish company protocol to avoid being the defining precedent.

[1] Maria Korolov, California Consumer Privacy Act (CCPA): What you need to know to be compliant, CSO (October 4, 2019, 3:00 AM PDT), [https://perma.cc/QN8T-CW8V].

[2] Id.

[3] Id.

[4] Emily Tabatabai, Antony Kim, & Jennifer Martin, Understanding California’s Game-Changing Data Protection Law, CORPORATE COUNSEL (July 16, 2018), https://s3.amazonaws.com/cdn.orrick.com/files/UnderstandingCaliforniaDataProtectionLaw.pdf [https://perma.cc/U5X3-BSME].

[5] Cal. Civ. Code §1798.120 (West 2019).

[6] Cal. Civ. Code §1798.110 (West 2019).

[7] Cal. Civ. Code §1798.150 (West 2019).

[8] ORRICK, California Consumer Privacy Act – Are you CCPA-Ready?, https://www.orrick.com/Practices/CCPA-Readiness [https://perma.cc/D6K4-G2E9].

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CRISPR Patent Dispute Unlikely To End With A Winner

Written By: Aaron Shaw

The genetic engineering tool, CRISPR-Cas9, represents the center of an ongoing patent dispute between the University of California, Berkeley, and the Broad Institute of MIT and Harvard.  CRISPR is a protein-based mechanism rendered from bacteria that can be manipulated to precisely splice and replace portions of a plant or animal’s genetic material. [1] Alternative genetic engineering technology are more expensive, taking more time to produce.  As a result, CRISPR is a powerful tool that can be put in the hands of many researchers.

High precision genetic engineering will inevitably raise ethical and legal questions about who can receive treatment and for what purpose. Will we limit ourselves to curing genetic diseases or will we allow ourselves to add favorable traits to humans?  However, the technology remains in its infancy. [2] The current battle involves the USPTO and EPO as to who owns the patents to CRISPR.

Jennifer Doudna, of the University of California Berkeley, and Emanuelle Charpentier, of the University of Vienna, were the first to discover the potential of CRISPR in prokaryotes (bacteria), and they were the first to apply for a patent. [3] [4] They have encountered fierce opposition from the Broad Institute of MIT and Harvard, who predicate their rights to CRISPR by being the first to examine its use in mammalian cells. [5] [6] The Broad Institute obtained a patent from the USPTO in 2017, for CRISPR’s use in eukaryotes (plant and animal cells). [7] Some would consider this a hard knock to UC Berkeley, since it was the first to publish the genetic engineering potential of the CRISPR mechanism.  The obvious next step was to apply the mechanism to eukaryotes. [8]

One month after the Broad Institute received its patent, UC Berkeley was granted a patent for the use of CRISPR in eukaryotes by the EPO. [9] The apparent split decision reveals the complexity of determining the owner of a technology that is groundbreaking, highly lucrative, and used on an international basis.  The Europeans stressed that the initial discovery of CRISPR defined the right to use it in a broad field of application. [10] The American approach appears to have narrowed the process, determining that the initial demonstration of CRISPR in a specific setting, such as in animal cells, created the right for its use in animals.

In 2017, one of our law students wrote about the precedent on this blog. [11] At the time, the most recent news was that UC Berkeley and the University of Vienna had defended their right to the broad use of CRISPR in Europe. [12] One reason this appeared to be a never-ending battle involved the rate of CRISPR innovation.  Such technologies instigate extended legal battles because scientists cannot discern the parameters.  Multiple parties held patents for narrowly defined applications of the CRISPR system. [13] However, the dispute between Berkeley and the Broad Institute still linger as a contentious debate.  The EPO’s decision did not seem to resolve the difference between the strategy of using CRISPR in animal cells while defining such use in animal cells.

In 2018, the US Court of Appeals doubled down, confirming there was “‘no interference in fact’” between the two parties’ patents. [14] In July 2019, UC Berkeley claimed the Broad Institute deceived the PTO by withholding information. [15] The Broad Institute believes this is a low blow. [16] Afterall, UC Berkeley has just filed its eleventh patent (and they are expecting six more) involving CRISPR-Cas9; this time the patents involve precise methods and substances for targeting DNA­—a vital step for the CRISPR system to modify DNA. [17] Without knowing whether the Broad Institute deceived the PTO, it appears Berkeley has conceded by filing narrow patents in the U.S.  It is now clear Berkeley has to compete with all the other discoveries being made, [18][19][20][21] despite not giving up on the dispute. Neither the PTO, nor the EPO, is likely to change patent application requirements any time soon.  This feud is likely headed toward a dead end, but neither party can be blamed for their pursuit, given the capital at risk.

This problem underscores the international challenge biotech companies confront.  Laboratories and pharmaceutical companies conduct expensive and timely research, [22] subsequently compelled to litigate when parties obtain similar patents in other jurisdictions.  This only serves to delay innovation when dealing with such a powerful research tool, and in the case of CRISPR, the issue may go further than the patent offices. The Federal and Drug Administration (FDA) is primarily concerned with somatic cell therapy in humans, but CRISPR-related patent applications are constantly pushing the boundaries of gene editing beyond somatic cell therapy. New technologies advance our understanding of how to apply the law.  The FDA and European Medicines Agency must be responsive to new CRISPR products that charter unregulated waters in order to encourage potential innovation.

[1] Jennifer Doudna, Genome-editing revolution: My Whirlwind year with CRISPR, Nature (December 22, 2015), https://www.nature.com/news/genome-editing-revolution-my-whirlwind-year-with-crispr-1.19063 [https://perma.cc/QSV3-Y2JD].

[2] Id.

[3] Heidi Ledford, Why the CRISPR patent verdict isn’t the end of the story, Nature (February 17, 2017), https://www.nature.com/news/why-the-crispr-patent-verdict-isn-t-the-end-of-the-story-1.21510 [https://perma.cc/X4D7-37RC].

[4] Jinek, Marti, et. al., A programmable dual RNA-guided DNA endonuclease in adaptive bacterial immunity, 337 Science 816-821 (2012).

[5] Heidi, supra note 3.

[6] Cong, Le, et. al., Multiplex Genome Engineering Using CRISPR/Cas Systems, 339 Science 819-823 (2013).

[7] Heidi, supra note 3.

[8] Programmable DNA Scissors found for bacterial immune system, Science Daily (June 28, 2012), https://www.sciencedaily.com/releases/2012/06/120628193020.htm [https://perma.cc/72MW-DRCH].

[9] Jef Akst, UC Berkeley Receives CRISPR Patent in Europe, The Scientist (March 24, 2017) https://www.the-scientist.com/?articles.view/articleNo/48987/title/UC-Berkeley-Receives-CRISPR-Patent-in-Europe/ [https://perma.cc/B8WR-3D2B].

[10] Id.

[11] Charles Cheng, A Gene-Editing Patent Dispute – What Does it Mean?, USF Blogs: Intellectual Property and Law Journal (March 28, 2017), https://usfblogs.usfca.edu/iptlj/2017/03/28/a-gene-editing-patent-dispute-what-does-it-mean/#more-1002 [https://perma.cc/ZT9L-K5QL].

[12] Jim Daley, Berkeley CRISPR Inventors Get Another Important European Patent, The Scientist (March 12, 2018), https://www.the-scientist.com/?articles.view/articleNo/52042/title/Berkeley-CRISPR-Inventors-Get-Another-Important-European-Patent/ [https://perma.cc/NTP7-UNMS].

[13] Heidi, supra note 3.

[14] Mark Terry, UC-Berkeley Rekindles U.S. Patent Dispute with the Broad Institute over CRISPR, BioSpace (August 1, 2019), https://www.biospace.com/article/crispr-patent-battle-isn-t-quite-over-yet/ [https://perma.cc/3T9P-4CC3].

[15] Id.

[16] Id.

[17] University of California, U. Vienna, Charpentier Get 11th U.S. CRISPR Cas-9 Patent, ClinicalOmics (August 26, 2019), https://www.clinicalomics.com/topics/precision-medicine-topic/university-of-california-u-vienna-charpentier-get-11th-u-s-crispr-cas-9-patent/ [https://perma.cc/N755-F965].

[18] Jon Cohen, Nirja Desai, With its CRISPR revolution, China becomes a world leader in genome editing, Science (August 2, 2019, 8:00 AM), https://www.sciencemag.org/news/2019/08/its-crispr-revolution-china-becomes-world-leader-genome-editing [https://perma.cc/3N7J-4B3C].

[19] Rich Haridy, CRISPR breakthrough allows scientists to edit multiple genes simultaneously, Newatlas (August 15, 2019), https://newatlas.com/crispr-cas12a-gene-editing-multiple-eth-zurich/61068/ [https://perma.cc/WK2C-A5WW].

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