PTO Funding Stabilization Act Introduced in House
By Amy Kim
June 2010
On May 18, a new bill was introduced to the House of Representatives by Reps. John Conyers Jr. and Lamar S. Smith, the leaders of the U.S. House Judiciary Committee. The Patent and Trademark Office Funding Stabilization Act of 2010 bill was proposed as a way to give the PTO authority to set fees related to IP protection and prevent unrelated government offices from receiving some of the fees that the PTO has collected. Currently, appropriations committees decide how much patent applicants and holders are to be charged by the PTO. Normally, the committees allow the PTO to keep enough fees to cover its budgeted expenses plus an additional $100 million on occasion; however, the committees have the right to take the remaining fees earned and use them for other governmental purposes. The amount of remaining fees that have been diverted since 1992 is estimated at $700 to $900 million.
The proposed bill was announced just one day after a narrower bill had been placed on the House’s calendar for voting. The narrower bill, the PTO Fee Modernization Act of 2010, addresses the current issue of the Congress being able to change fees charged by the PTO. The bill proposes a method by which the PTO Director can modify fees as needed. If the bill is passed, the PTO Director will be able to alter the fee amounts through a process that would last only four and a half months from the notice of change to the enactment of the change. This bill was pulled from the legislative calendar, and the Patent and Trademark Office Funding Stabilization Act of 2010 was introduced in its place, which includes the fee-setting aspects of the earlier bill. Conyers explained the replacement by stating, “We had initially planned to introduce a bill solely addressing fee-setting authority and bring it up for a vote . . . However, upon reflection, it has become evident that fee-setting authority, fee diversion, and a temporary surcharge are interrelated, and we hope to now work with all stakeholders on this package.”
The Funding Stabilization Act of 2010 has a number of key elements. The bill is geared towards correcting the interrelated issues of fee-setting authority and the diversion of PTO funds by replacing the appropriations committee with a “USPTO Public Enterprise Fund”, which will be under the PTO’s control. The proposed revision of the statute states that the collected fees “shall be collected by the Director and shall be available until expended.” More flexibility is given to the PTO Director by broadening the allowable expenses that are paid out of the fund. The definition of ‘allowable expenses’ gives much leeway to the Director by allowing costs “that are determined in the discretion of the Director to be ordinary and reasonable and are incurred by the Director for the continued operation of all services, programs, activities, and duties of the Office.” The new fund is expected to be established by October 1, 2011.
The new bill also establishes the fee structure for all PTO services. It authorizes a 15% surcharge to be added to the starting fees, effective 10 days after the bill is passed. The surcharge clause was added due to economic pressures and expectations of a shortage of funds. An exception is allowed for small businesses that file few patent applications and have low incomes, but a $400 surcharge is added for non-electronic filings. Critics of the bill claim that it does not fully provide the patent reform that is needed. American Intellectual Property Law Association President Alan J. Kasper stated, “AIPLA supports a comprehensive approach to patent reform now working its way through the Congress, and not the piecemeal approach represented by this bill.” In his view, the bill lacks “efficiency and quality-enhancing provisions such as those that would simplify the rules and procedures for granting patents, allow the public to provide patent examiners with relevant information before deciding whether a patent can be granted, or permit prompt challenges of newly issued patents to ensure they satisfy the rigorous standards for patenting.”
Conyers, in his announcement of the proposed bill, stated that a more comprehensive patent reform was still available. He clarified that the proposed bill was not intended to effect the discussions that were being held in the Senate over the comprehensive patent reform bill.
WIPO Prepares to Guard Indigenous Peoples’ IPR
By John Amandolare
June 2010
In early May, The World Intellectual Property Organization’s (WIPO) Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (IGC) made significant headway on a new international framework to prevent the misappropriation of “traditional knowledge, genetic resources and traditional expressions.” WIPO’s goal is to have indigenous peoples become beneficiaries from the rewards of exploited biodiversity within their homeland. Under the new framework, member states and indigenous peoples represented in WIPO that request the Organization’s support can receive a number of WIPO initiatives aimed at helping them gain a share of profits earned from genetic resources.
The IGC held its first session in early May in Geneva, Switzerland, and will continue active negotiations, allowing for member states to contribute to the IGC framework draft that will be up for official debate at the next scheduled meeting in December 2010. The May session represents a major step forward for WIPO. Previously, negotiations came to a halt in October 2009, following procedural disagreements. IGC intersessions are planned this summer to discuss key items of the new framework, although final arrangements and participants are still being coordinated.
IGC members are hopeful that the new instrument will offer protection for both developed and developing member states, and indigenous peoples as well, and provide for a fairer distribution of earnings from intellectual property associated with the IGC’s three core areas – traditional knowledge, folklore and genetic resources. Among other key topics, a developed nation genetic resources objective was submitted for negotiation.
IGC’s debate, both this summer and at next winter’s formal negotiation, is expected to hinge upon determining what sections of the agreement will be legally binding, especially regarding the misappropriation of resources. Specifically, developing countries and indigenous groups fear that, without a binding mechanism, they will be at a disadvantage in the face of developed countries that profit from the exploitation of the traditional knowledge, folklore, and genetic resources of indigenous peoples.
US and China Agree to Bilateral Patent Cooperation
By Amy Kim
June 2010
The USPTO and China’s State Intellectual Property Office (SIPO) signed a memorandum of understanding (MOU) on May 19th regarding bilateral cooperation on patents between the two countries. The memorandum creates the general framework that will be needed in order to obtain bilateral cooperation. The framework provides for the creation of work-sharing programs to improve the exchange of information between both countries and allow for a more effective administration and IP system. The MOU also promises the development of best practices and cooperative activities. Proponents praise the bilateral Patent Prosecution Highway (PPH) agreement that both countries agreed upon as part of the MOU. The PPH agreement serves as a tool to reduce international patent backlogs and shorten the patent application process. Since 2006, the PTO has entered into PPH agreements with the patent offices of Australia, Canada, Denmark, Finland, Germany, Japan, Korea, Singapore, United Kingdom, and the European Patent Office.
David Kappos, the USPTO’s Under Secretary of Commerce for Intellectual Property and Director, released a press statement stating, “This memorandum reconfirms and further strengthens our commitment to the growing cooperative relationship between our two offices . . . I am especially pleased that we have agreed to work toward constructing a Patent Prosecution Highway where both Offices can leverage each other’s examination expertise to eliminate work redundancy, increase efficiency and increase patent quality.” Tian Lipu, the Commissioner of SIPO, added that the bilateral cooperation between the two offices has advanced significantly since his last visit to the PTO in 2006. He confirmed, “This MOU takes note of our accomplishments, advances our shared vision of bilateral cooperation, and further reinforces the partnership between USPTO and SIPO.” The United States and China agreed to have the MOU effective immediately, and intend to move forward on their plans as soon as possible.
Project Exchange Program Aims to Chop Backlog
By Erin Lawless
June 2010
In an effort to reduce the patent application backlog at the Patent and Trademark Office, USPTO Director David Kappos has implemented an additional program to expedite pending patents. This new program, dubbed “Project Exchange”, will be expanded to include all applicants who wish to expedite processing on a pending patent. Previously, only those entities that qualified as small inventors could take advantage of the program. Now, anyone with multiple filings can use it—but customers are limited to 15 applications per entity.
Here’s how it works. An entity with multiple filings can have one of their patent applications expedited if the entity withdraws one of their unexamined patents, hence the “exchange”. In a press release, Kappos said, “Project Exchange will help us reduce the backlog and enable us to process applications more quickly.” Kappos has proposed and implemented many new initiatives for reforming the USPTO and reducing the patent backlog since he was appointed by President Obama in August 2009.
USPTO Launches Ombudsman Pilot Program
By Amy Kim
May 2010
In April, the USPTO announced the launch of its new “Ombudsman Program”, which is designed to assist patent applicants with application processing problems if the regular channels of correcting the problem fail. The pilot program, which is planned to run for one year, was introduced with the goal of saving applicants and the USPTO both time and resources while improving patent quality.
The program is straightforward and was created in direct response to feedback that the USPTO received from members of the patent community. Under the Ombudsman program, applicants, attorneys or agents who encounter a problem in the course of their application process can now obtain assistance by contacting an ombudsman representative via the USPTO website. The applicant will receive a phone call within one business day to discuss the details. After the discussion, the ombudsman will coordinate with staff members at the Technology Center (TC) to correct the issues and allow the application to continue on its course.
In order to ensure quality assistance, each TC staff member is assigned an ombudsman representative and a backup, who are selected according to their experience. The program is staffed by senior supervisors and TC staff, including supervisory patent examiners, training quality assurance specialists, and subject matter experts. In addition to the highly qualified staff, a custom-designed tracking database is maintained to track general information about the problems that arise and whether an issue is open or closed. Ombudsman representatives are instructed to regularly review the database to confirm that all issues have been addressed within 10 business days. They also track any trends in the examination process that may reveal areas where additional training is needed. The information extracted from the database will also alert the USPTO to common problems that applicants encounter in the application process. These problems and solutions will be posted on a website in order to provide another resource for applicants to reference when encountering a problem.
Organizations like the Intellectual Property Owners Association have praised the USPTO’s initiative in addressing the concerns of the IP community. It stated in its comments to the PTO that “[c]reating an Ombudsman position will provide the patent community with another resource to turn to when it believes that prosecution of a patent application has gone astray.” The USPTO has left the decision open as to whether it will decide to extend the pilot program at the end of the 12-month pilot period or not. If extended, the program will include modifications based on the applicants’ feedback during the pilot period.
Peer-to-Patent Project Extended
By Erin Lawless
May 2010
The Peer-to-Patent project, also known as the Community Patent Review project, is one of the USPTO’s many attempts to reform the patent system. This particular reform seeks to capitalize on gathering public input in a structured, productive manner by connecting the PTO to an open network of experts online. If successful, Peer-to-Patent would be the first social software project directly linked by the federal government to decision making. Since 2007, when the Peer-to-Patent project began, it has helped to decrease the number of backlogged patent applications by about 60% according to the USPTO.
The purpose of Peer-to-Patent review is to help patent offices provide faster and higher-quality examinations of pending patent applications. Specifically, to accomplish this goal, the PTO enlists the assistance of active, online citizens to help find and explain prior art. The term ‘prior art’ is defined as any information that has been made publicly available related to the originality of a patent claim. It can include any earlier patent, academic paper, magazine article, webpage, or physical specimen – just to name a few.
Historically, patent examiners have been in charge of finding and comparing prior art to a claimed invention in order to make a determination on an application for a patent. A claimed new invention for which a patent application is pending must be new, novel, and not obvious in order to qualify for a patent. Because of the massive number of patents examined, patent examiners have only a few hours they may budget towards researching and examining prior art for each application.
Under the Peer-to-Patent change, however, patent examiners can rely on information brought to their attention by the social software feature to facilitate discussion amongst groups of volunteer experts. Users are able to upload prior art references and participate in discussion forums.
Other countries’ governmental patent offices that have used peer-to-patent reforms include Australia, Japan, and the United Kingdom, as well as the European Patent Office.
TechCrunch to Host Startup Competition in NYC
By John Amandolare
May 2010
On May 24–26, TechCrunch, the popular online website devoted to tech startups, products and websites, will host its first conference devoted to all-things startup in the technology world, TechCrunch Disrupt. Topics to be discussed include the role of media and technology today and in the future, as well as the growing presence of tablet computing, smart phones, software in the cloud, and rich-media platforms, among others. In addition to the panel conversations listed on the schedule, there will be afternoon unveiling sessions for new startups and products competing for a prize.
Scheduled speakers include Fred Wilson, a partner at Union Square Ventures; Charlie Rose, host of the nightly Charlie Rose Show; Ron Conway, an angel investor from SV Angel (whose early investments include Google, Paypal and Ask Jeeves); and a few members of Google, including Vice President Vic Gundotra, Vice President of Search Product and User Experience Marissa Mayer, and President of Global Sales Operations and Business Development Nikesh Arora. In total, there are nearly thirty scheduled speakers across the three-day event.
Startups will be unveiling themselves to critics as well, including demos and exhibits of products in “Startup Battlefield”. Products either still in beta or less than three months old are eligible to compete in this Battlefield tournament, and TechCrunch is placing great emphasis on companies planning to launch for the first time at the conference – the winner of Battlefield receives $50,000 cash. Judges will include venture capitalists, angel investors and successful startup entrepreneurs.
The event is set to take place at 550 Washington Street in lower Manhattan, and the TechCrunch team has partnered up with AirBnB to offer a large number of housing options for people coming from out of town. Using the code DISRUPT100 on AirBnB can take up to $100 off for your stay.
WIPO Criticizes ICANN’s Stance on CybersquattingBy Amy KimApril 2010
The Internet Corporation for Assigned Names and Numbers (ICANN) recently proposed a Trademark Post-Delegation Dispute Resolution Procedure (PDDRP) that would provide trademark holders the right to initiate proceedings against registry operators who have acted in bad faith. The World Intellectual Property Organization (WIPO) criticized ICANN’s proposal as weakening WIPO’s original proposal, which would have allowed trademark holders to target registries for not taking sufficient steps to prevent abusive domain name registrations. WIPO feels that the registries should take a more proactive approach towards protecting trade names and that ICANN’s proposal focuses on blatant cases of registry owners exhibiting “bad faith” in facilitating cybersquatting. WIPO prefers to encourage registry owners to take preemptive steps to minimize and prevent cybersquatting before it occurs.
ICANN was created in 1998 to organize and manage the Internet’s vast domain name system (DNS), which allows website creators to register domain names. Domain names can be broken down into two components – the text to the right of the dot is known as a “top-level domain” or TLD (e.g., “com”, “org”, etc.), and the text before the dot is the domain name, which must be registered in order to be used for purposes like websites and email services.
Because the Internet has become such an integral part of the global community, the number of cybersquatting cases has increased dramatically over the past decade. Cybersquatting is the act of registering, selling or using a domain name to profit from the goodwill of someone else's trademark. Generally, opportunistic buyers purchase the domain names of existing businesses with the intent to sell the domain name back to the businesses for a profit. Global and domestic organizations have struggled to control these acts but have been unable to create an effective plan that synchronizes the efforts amongst different groups.
Some of the limitations of ICANN’s proposal stem from the inherent ambiguity of the rules and process. Registry owners are likely to find it difficult to determine whether an ICANN panel would find “bad faith” in their actions since the definition can be construed broadly or narrowly. In contrast, WIPO’s method would define specific safe harbors for registry owners by allowing them opportunities to make available certain dispute policies and resolution mechanisms, be responsive when complaints come in, investigate the complaints being made, and maintain certain minimal standards. By this method, registry owners would be protected from potential suits from trademark owners, and cybersquatting would be greatly diminished.
ICANN’s proposed PDDRP is currently awaiting summary and analysis. Various organizations, including WIPO, weighed in during the comments phase (
see WIPO comments). The summary and analysis is expected to be issued within the coming months.
NYS Broadband Council Plans Access for All New YorkersBy Erin LawlessApril 2010
On March 15, the NYS Broadband Development and Deployment Council held a quarterly meeting to review the status of broadband accessibility in New York and to address ways in which the State could incorporate the federal broadband stimulus programs. The four Broadband Technical Committee Chairs presented priorities for the Council to consider in order to advance broadband initiatives and obtain federal broadband stimulus funding. In regards to the upcoming year, each Chair presented a plan: the Digital Literacy & Adoption Chair suggested addressing affordability, computer ownership, digital literacy and training programs; the E-Government Expansion Chair suggested increasing access to government services by offering online government programs that can be accessed through the Internet; the Economic Development & Infrastructure Chair suggested building stronger economies through broadband access by promoting the increased usage of technology by NYS business owners; and the Planning & Policy Committee Chair encouraged the Council to focus on recommending and advocating for broadband policies that will advance computer adoption.
The Council discussed ways to leverage NY State’s broadband infrastructure with federal and state investors, thereby allowing citizens to connect to educational and training opportunities as well as government programs. In turn, the Council expects such training and government programming to enhance community involvement and foster economic development. Further, some organizations are providing support to help NY entities interested in applying for broadband stimulus funds. The Governor’s Recovery Cabinet and NYSTAR, along with the State of New York, are all providing such services.
One grant that was already disbursed includes a $625,000 grant from New York State to Tech Valley Communications in partnership with Albany Mayor Gerald Jennings for the purpose of expanding Albany FreeNet, a free wireless network, into new areas surrounding Albany where Internet adoption rates are low. The grant will also allocate resources towards providing free digital literacy classes to Albany residents. The Council is looking at the use and implementation of this grant as a model for other programs in the State.
Congress Hears Call for Manufacturing InnovationBy Erin LawlessApril 2010
On March 17, industry experts testified in a hearing to the House Committee on Science and Technology. The resounding call was for a shift in priorities toward innovation and advanced manufacturing so that U.S. manufacturers can keep up with foreign competition.
General Motors’ Director of the Manufacturing Systems Research Lab, Susan Smyth, called for government R&D programs that are “more focused on ways to provide high-quality assembly, non-destructive evaluation, and high rates of repeatability at large volumes.” Smyth pointed out that many technologies are critical to the operations of the automotive industry. She pointed to robotics, wireless standards, virtual manufacturing, and sustainability as key concerns for automotive manufacturing.
Debtosh Chakrabarti, President of the chemical manufacturer PMC Group, called for the United States to increase the number of high-wage jobs and reduce its dependence on foreign oil. Chakrabarti was optimistic that the chemical manufacturing industry could replace crude oil with chemicals based on renewable sources. However, Chakrabarti noted that the chemical industry is facing problems in the development and commercialization phase due to a lack of public and private funding.
Proctor & Gamble’s Vice President of Global Sustainability, Len Sauers, called for stronger research into renewable energy, stronger education in terms of undergraduate-level STEM education, and other “drivers of education”.
Other experts from private, public and academic institutions warned that more investment in public-private partnerships and the prioritization of key technologies are crucial because the United States is loosing its competitive edge to foreign competition.
At the end of the day, in seeming agreement with those who testified, Committee Chairman Bart Gordon (D-TN) commented that although U.S. manufacturing is not as vibrant as it once was, it is not dead. Gordon estimated that the manufacturing industry generates more than $1.5 trillion and accounts for more than half of U.S. exports. He concluded that Congress needs to take action now to “preserve, and perhaps even grow, the U.S. manufacturing sector for the future.”
Brazil Threatens to Breach US IP Rights
By Amy Kim
March 2010
On February 10, Brazil adopted measures to suspend its obligation to protect US intellectual property rights (IPR). These measures stem from a World Trade Organization (WTO) dispute that Brazil brought against the United States in 2002 over cotton subsidies. As the United States has made no significant reformations since then, Brazil brought the case back to the WTO in 2009.
In 2002, the WTO held that the United States had violated global trade rules by giving over $4 billion in annual cotton payments to US farmers, thereby encouraging excess production and driving down global cotton prices. In 2005, Brazil asked the WTO to allow sanctions of up to $2.68 billion on goods and to permit Brazil to place limitations on US IPR and services. The WTO determined that Brazil could retaliate by attacking US services or IPR only if the United States paid cotton farmers in excess of specified caps.
Although Congress tried in 2006 to conform to this ruling by cutting some export credits and repealing certain cotton programs, it proceeded to institute new farm bills in 2007 that allowed more cotton subsidies. The WTO responded by proposing that the United States cut cotton subsidy costs by 82%. Washington rejected the proposal and proposed no alternative.
In 2009, although the cap had been set at $460.3 million, the United States exceeded that by $340 million. To remedy this situation, President Lula adopted provisional measures that would streamline the administrative processes required to suspend US IPR. These measures have been given the force of law and ensure that the removal of IPR is valid from a domestic legal standpoint. The document provides that the following measures may be taken:
(1) suspension and limitation of IPR;
(2) changing of the rules and procedures that secure IP protection;
(3) changing of the measures for the application of IPR;
(4) temporary prohibition of royalty remittances on the exercise of IPR; and
(5) additional tax costs on the compensation of IPR.
These measures allow Brazil to suspend and limit the IP rights of citizens or companies domiciled in countries that violate WTO trade rules. Areas that these measures will affect include copyrights, trademarks, geographical indications, industrial designs and patents. The Executive Secretary of Brazil’s Chamber of Foreign Trade (“CAMEX”), Lytha Spíndola, announced that the group plans to publish the final list of retaliation products on March 1, 2010. A preliminary list in November mentioned 222 American products, including food, medicine, medical equipment, cotton, appliances, cosmetics and car parts. Services that may be affected include business, communication, transportation, financial, and tourism and travel-related services.
If Brazil proceeds with this, it will be the first country to apply sanctions on IP rights. Although these actions have been authorized twice in the past (by Ecuador and Antigua), sanctions were never enforced. The Head of the Economic Department of Brazil’s Foreign Ministry, Marcio Cozenday, stated, “The broader our retaliation, the better it will be, as it increases the pressure on the United States . . . Many sectors of American society will want their government to follow WTO rules.” CAMEX is giving the United States an extra 20 days to cut its subsidies to cotton, and will suspend the punishment if the United States complies.
Global Patent Agenda Eludes WIPO in Geneva
By Erin Lawless
March 2010
The World Intellectual Property Organization’s (WIPO) January meeting in Geneva failed to solidify an agenda for global patents. Amid discussions about implementing an international patent system and conducting future studies of international patent programs, no decisions were rendered. WIPO also failed to establish a new international treaty on patent harmonization, which would have helped countries work together in patent protection.
The WIPO’s Standing Committee on Patents (SCP) discussed the addition of new issues to the list of patent topics recommended for further study, but settled on no agreements. The SCP Secretariat is responsible for running and delegating agreed-upon studies.
For the sake of comparison, back in June 2008, the SCP agreed on 20 issues for further study, and added an additional 2 in March 2009; however, in 2010, SCP participants were decidedly less amenable to the addition of new patent issues due to what seemed to be growing tensions between representatives from industrialized and developing nations.
Developing countries in Africa and Asia pushed for further study of the impact of the patent system on developing countries and food security; however, industrialized countries, like the United States, did not bite and instead argued that such studies were already ongoing, albeit under a different title.
Another big issue arose as a number of nations called for independent experts to examine the state of technology transfer. In particular, it was asked that experts study the ways in which the patent system may impede technology transfer. It seems that some undeveloped countries are questioning the SCP Secretariat’s capacity to conduct impartial research and studies on the agreed-upon topics. However, most comments regarding the need for “impartial studies” have remained politically vague.
At best, the WIPO’s January SCP meeting can be called a ‘stalemate’ as no items were added to the agenda and nothing concrete was accomplished. Discussions are scheduled to continue, however, at their next meeting in October 2010.
_________________________________________________________________________
Grants.gov Realizes Record SubmissionsBy John AmandolareFebruary 2010
Recovery Act grant funding is being credited for helping to achieve a 60% submission increase for grant applications in 2009 at Grants.gov, the central repository maintained by the U.S. Department of Health and Human Services for grant programs across 26 federal agencies. Since its founding in 2003, Grants.gov has aimed to help grant applicants across all agencies engage in a simplified system that eliminates redundancy. Funding for the program is spread out among the participating agencies based on their size, and a representative body that includes one member from each agency handles oversight.
Recent improvements that have likely lent to the increase in 2009 include (1) a new Adobe Reader application package that allows all users, regardless of operating system, to apply for grants, and (2) a Speed and Reliability Upgrade program that has helped the website respond to increased traffic and submissions. Under the American Recovery and Reinvestment Act (ARRA) alone, Grants.gov processed over 64,000 applications, and the website received over 16 million visitors over the course of the year. The total number of submissions for the year (309,771) represents a 53% increase from that of 2008.
One of the biggest advancements in 2009 for the Grants.gov website was the introduction of the Applicant System-to-System (S2S) Web service. By streamlining the process and making applications easier to complete, S2S frees applicants and potential grant recipients from having to re-enter information when applying for multiple grants. S2S also allows organizational and agency users to submit applications through its automated Web service. Last year, the rejection rate for S2S submissions was only 3.4%, even as submissions increased 118% from 2008.
Currently, the areas of ‘Income Security and Social Services’, ‘Natural Resources’, ‘Science & Technology’ and ‘Other Research and Development’ have some of the largest numbers of opportunities available for grantees. To date, the ‘Science & Technology’ category has over five hundred available programs that offer funding. Grants.gov funding is available in a wide variety of categories, all of which can be viewed
here.
On December 21, the World Trade Organization (WTO) in Geneva announced its ruling that China’s import restrictions on films, books and music from the United States violated the free-trade agreements that China had made upon joining the WTO. China originally brought the appeal last August, after the WTO Panel had held that China could not force foreign importers to divert their media products through state-run companies.
China allows only 20 foreign films to be released to theaters each year, and selling music via the Internet is illegal as well, which limits music download companies like Apple’s iTunes from obtaining full access to the Chinese market. The United States had brought the suit against China because of losses to the domestic media industry in the amount of billions of dollars. As a result of China’s limitations, illegal counterfeit copies of foreign movies and music have flourished in the Chinese market.
The United States’ argument against China’s restrictions focused on the agreements China had signed in order to gain membership in the WTO—the Protocol of Accession, the General Agreement on Trade in Services (GATS), and the General Agreements on Tariff and Trade (GATT)—all of which require that WTO member countries allow the same level of market accessibility. China, however, argued that there was an exception contained in Article XX(a) of the GATT that allowed restrictions to be placed when it was in a country’s interest to protect its public’s morals.
Even though the original WTO ruling had deemed China’s “public morals” argument insufficient, China raised the same defense in its appeal. The defense had only been raised once before, and that was by the United States in an attempt to force a ban on Internet gambling. The WTO had rejected the defense back in 2005 and, therefore, experts were not surprised when, this time around, the WTO rejected China’s use of the same defense. Any country using the defense bears the burden of providing evidence that the trade restrictions are "necessary to protecting its morals." The WTO held that China failed to offer evidence showing that its restrictions on foreign copyrighted materials were “necessary” to protect public morals. It noted that the United States had offered an alternative method for monitoring the imported media goods that was less trade-restrictive but which still provided China with ample opportunity to review the content of the foreign media products. Despite the obvious win for United States, the WTO ruling did not address China’s limit of allowing only 20 films a year, so the outcome may not have a significant impact on U.S. revenues.
China cannot appeal the December ruling and has been given one year to comply with the panel decision. If the restrictions are kept in place, though, the United States may impose trade sanctions on China that will equal the estimated amount of lost revenue. U.S. Trade Representative Ron Kirk stated that the WTO’s decision was an essential step towards obtaining full market access to China and added, “We expect China to respond promptly to these findings and bring its measures into compliance.”
Torrent Liable for Inducing Copyright InfringementBy Erin LawlessFebruary 2010
The operators of the popular Internet file-sharing site, Torrent, were held liable for inducing copyright infringement in the U.S. District Court for the Central District of California last December. Plaintiffs against Torrent include Columbia Pictures Industries Inc., Disney Enterprises Inc., Paramount Pictures Corp., Tristar Pictures Inc., Twentieth Century Fox Film Corp., Universal City Studios LLLP, Universal City Studios Productions LLLP, and Warner Bros. Entertainment Inc. The court held that Torrent’s features were designed to purposefully lead users to “obviously” copyrighted works and encourage misuse.
According to precedent, in order to be held liable for inducing copyright infringement, the defendant must take purposeful steps to assist and encourage others to infringe copyright. The plaintiff must show that the defendant has actual knowledge of the infringing material on his or her site and, furthermore, that the defendant can remove it but fails to take simple available measures to prevent further damage to the copyright holder.
The court commented that the Torrent operators’ “inducement liability is overwhelmingly clear,” as there was an abundance of evidence against them. For example, in online forums, Torrent operators had answered users’ queries about how to create DVDs of pirated movies. The conduct exemplified in this evidence demonstrates that the Torrent operators were both aware of the users’ infringement and acted purposefully to promote such conduct. Furthermore, operators had posted comments on their site in which they admitted to “stealing from the lechers” as distinguished from the original artists.
According to the court, Torrent operators had designed their site to include features that draw attention to copyrighted content available for download. One of the Torrent operators had even said, in an interview, that one reason for the site’s popularity was the access it provides to content like ‘The DaVinci Code’, which was a top movie at the time.
If you are concerned that your own site may be held liable for inducing copyright infringement, here are some signs to look out for:
1. Does your site reproduce and distribute copyrighted content within the United States?
2. Is there a category for uploads and downloads where users can upload and download without limits?
3. Does the upload and download section of your website include categories for material that is copyrighted (e.g., “Box Office Movies”)?
4. Do you use piracy-related terms in the website meta tags?
5. Do you provide support to users seeking copyrighted works?
6. Are you posting comments that show your knowledge of infringement?
7. Does your website’s business model rely on copyrighted works?
Green Technology Cuts Ahead at the USPTOBy Amy KimJanuary 2010
The U.S. Patent & Trademark Office (“PTO”) announced on December 7 its plan to accelerate the patent application review process for green technology. This Green Technology Pilot Program was introduced with the goal of expediting the development and deployment of green technology into U.S. markets. Under the PTO’s standards, green technology includes applications related to environmental quality, energy conservation, development of renewable energy resources and reduction of greenhouse gas emission.
Normally, patent applications were reviewed in the order in which they were filed. For applications in the green technology areas, applications were reviewed and issued a final decision within approximately 40 months. The expedited process will reduce this time by an average of one year.
An application will be advanced out of turn (accorded “special status”) for examination if the applicant files a petition to “make special” with the appropriate showing. The program began December 8, 2009 and will run for twelve months. Therefore, all petitions to make the application fall under the program must be filed before December 8, 2010. This new plan affects the first 3,000 green tech-related applications that are appropriately filed with a petition.
In order for an application to be eligible for special status, the invention must materially contribute to one of three specified goals:
(1) The invention must further the “discovery or development of renewable energy resources.” The USPTO defines the term ‘renewable energy resources’ as including hydroelectric, solar, wind, renewable biomass, landfill gas, ocean (e.g., tidal, wave, current and thermal), geothermal, and municipal solid waste, as well as the transmission, distribution, or other services directly used in providing electrical energy from these sources;
(2) The invention must create “more efficient utilization and conservation of energy resources.” These include inventions related to the reduction of energy consumption in combustion systems, industrial equipment, and household appliances; and
(3) Lastly, the invention must aid in “the reduction of greenhouse gas emissions.” These include inventions that contribute to advances in nuclear power generation technology, fossil fuel power generation, or industrial processes with greenhouse gas-abatement technology (e.g., inventions that significantly improve safety and reliability of such technologies).
The accelerated review process is being praised by inventors and business executives alike. Carl Horton, Chief Intellectual Property Counsel of General Electric, stated “We hail this initiative as an excellent incentive to fuel further innovation of clean technology and a terrific mechanism to speed the dissemination of these patented technologies throughout the world.” As patents begin to be granted more quickly, inventors will become able to secure funding and create businesses to further the presence of green technology in U.S. markets. And if the program proves to be a successful means of injecting U.S. markets with green technology, then the PTO plans to extend the deadline past its twelve-month pilot period.
Discussions pertaining to the advantages and disadvantages of the PTO’s Patent Prosecution Highway (“PPH”) agreements took place in a roundtable meeting on November 19, 2009. Participants included members of various IP industries, law firms and associations.
As the world’s markets merge, patent applicants often decide to pursue patent protection in those countries where their intellectual property will be manufactured, used or sold. Whether patent applications are filed directly in each country of interest or under the Patent Cooperation Treaty, the end result is that substantially identical patent applications with essentially the same claim and scope are pending simultaneously in multiple countries. Prior to the implementation of the PPH agreements, each country’s patent office examined its own version of the patent application, despite the fact that other patent offices around the world were simultaneously reviewing the same patent application issued by the same applicant. The speed at which the reviews were being completed, however, could not keep up with the demand, so backlogs grew. In 2006, the United States entered into its first PPH agreement to reduce the backlog of patent applications and eliminate the redundant work of the patent offices of participating countries.
PPH agreements are bilateral agreements between national or regional patent offices to exchange information and expedite the processing of patent applications. By implementing these agreements, an applicant at a participating patent office may request accelerated processing at another office if the claims in the relevant overseas application have already been allowed by the office in the applicant's own jurisdiction. Currently, the United States has such agreements with numerous countries, including the United Kingdom, Denmark, Finland, Germany, Japan, Singapore, South Korea, Canada and Australia.
None of the participants at the roundtable discussions denied the potential benefits of work sharing. Herb Wamsley, executive director of Intellectual Property Owner’s Association (IPO), commented that he has yet to encounter a single IPO member who is against the concept. Patent attorneys as well as industry and association representatives have praised the way in which work sharing programs lower patent examination costs and move patent applications more quickly to final action.
Despite the advantages of utilizing the system, some concerns were raised during the roundtable discussions. Robert Budens, President of the Patent Office Professional Association, commented that examination quality should be a primary concern of any program. Several participants agreed and raised the additional concern that some national patent offices may develop a reputation for less rigorous searches while others might become known for higher-quality searches, thereby creating “one-way streets” instead of a “highway” whereby the workload is shared, which could potentially affect patent quality.
Although a solution to the problem was not proposed, the roundtable discussion concluded with a reaffirmation that quality must not be sacrificed as a result of speeding up the application process.