Articles

Articles:

By Shubha Ghosh, Crandall Melvin Professor of Law & Director, SIPLI & TCLP

The following comments are submitted in response to the Request of the United States Patent and Trademark Office (USPTO), Department of Commerce, as published in the Federal Register Vol. 89, No. 52, Friday, March 15, 2024 (FR Docket No.: PTO–C–2024–0004), seeking comments on how the USPTO can build on current initiatives to accelerate, incentivize, and otherwise support translation of innovations to the marketplace through commercialization using intellectual property rights. 

Commenter Information 

These comments are submitted by the Institute for Intellectual Property and Social Justice (IIPSJ), a not-for-profit non-governmental organization established to promote social justice in the field of intellectual property law and practice. IIPSJ advocates implementing core social justice principles of equitable access, inclusion, and empowerment throughout the IP ecosystem. IIPSJ’s work includes scholarly examination of IP law through a social justice rationale; advocacy for social justice in the shaping and implementation of IP law and policy; initiatives to increase the diversity of the IP bar; and programs which promote greater awareness and understanding of IP protection, particularly among historically and currently disadvantaged and underserved groups. 

 Summary of IIPSJ’s Comments 

The USPTO’s current initiative is an important step in implementing the Unleashing American Innovators Act (UAIA) and other legislation which seeks to promote greater inclusivity throughout and otherwise achieve the social justice obligations and effects integral to an effective intellectual property ecosystem. A targeted and comprehensive strategy for ensuring that all Americans enjoy meaningful opportunities for access to, inclusion in, and empowerment through IP endeavor and achievement is critical to the national security, gross domestic product, and cultural and technological advancement. Accordingly, IIPSJ commends and recommends continuing several initiatives of the USPTO in response to its requests (1), (3), (4), (9), (11), (12), and (13), including: 

  • Identification of underserved groups who are potential sources for commercializing innovation, including pre-university students, students and researchers at HBCU’s, veterans, members of rural communities, members of the disabled population, senior citizens, and adult learners; 
  • Expansion of existing educational programs to disseminate awareness of intellectual property laws and the mechanics of commercialization; 
  • Realization of the potential of the Community Outreach Offices (COOs) to establish networks between overlooked and underserved innovator populations and traditional professionals (attorneys, engineers, venture capitalists, investors) to facilitate the developments and commercialization of innovation. 

IIPSJ’s General Comments 

The success of the Bayh-Dole Act stemmed from identifying inventors whose innovative accomplishments lay dormant and unavailable for the benefit of the public. By allowing inventors in universities who were denied patent rights because they had received federal government funding the legal right to obtain a patent for their innovations, the path was set for dissemination to the public through the pathways of commerce. 

The UNIA and the USPTO continue the spirit of the Bayh-Dole Act by looking beyond universities to cultivate other settings wherein innovative minds seek to benefit their fellow citizens through the pursuit of commercial pathways, paved in part by utility patents, design patents, and trademarks. As a result of various governmental, private sector, and public interest initiatives, many groups and communities with little to no understanding of IP protection are gaining IP awareness and education and are gradually joining the ranks of university professors, graduate students, and researchers in federal laboratories through recognizing the value of commercialization. Through programs designed to identify and cultivate our nation’s “Lost Einsteins”, students at the K through 12 level are being educated as to the breadth and importance of IP endeavor and receiving concomitant training in entrepreneurship and intellectual property. Veterans have been another group that the USPTO recognizes as an innovative community whose potential has yet to be guided and unleashed. The USPTO has also recognized the overlooked talent in Historically Black Colleges and Universities (HBCU’s). 

As enumerated below, these enhancements to current initiatives respond to the USPTO’s requests 1,3,4,9,11,12, and 13. 

 IIPSJ’s Responses to Specific Requests 

Community Outreach Office IP Awareness and Education 

In response to request (1) as to the biggest challenges to and opportunities for commercialization of innovation, we point to the need for education about intellectual property to various individuals and groups beyond professionals such as attorneys, venture capitalists, and university researchers. Grassroots intellectual property education brings awareness to overlooked constituencies, such as the identified K-12 students and students and researchers at HBCU’s, and also to members of rural communities, the disabled population, the senior citizen demographic, and veteran groups. This broader group of “Lost Einsteins” can enhance their socio-economic opportunities and attain personal fulfillment through tapping their potential for innovation and commercialization.

Critical and emerging technologies have often centered on pharmaceuticals and informational technologies. But the expansion of the potential beneficiaries of IP awareness and education can unleash a broader set of critical and emerging technologies as referenced in request (3). For example, the disabled population can identify ignored technological responses to the needs of disabled sub-groups, such as the visually handicapped or the mobility challenged. Similarly, the veteran population can identify innovations for delivery of medical and psychiatric services, for example through developing generative artificial intelligence technologies or through more traditional information technology tools. Overlooking these and other “Lost Einsteins” not only fails to cultivate and tap our nation’s resource of human talents but also denies communities the opportunity to meet their needs that innovation can address. Increased IP awareness and education can address these gaps through identifying overlooked critical and emerging technologies. 

To streamline and accelerate innovation, per request (4), the USPTO should recognize that IP awareness and education entails not only disseminating knowledge of the law and agency practices, but also requires enabling connections between overlooked potential innovators and professionals who can facilitate these innovators’ ideas. Such connections include bringing together members of disabled communities with engineers who can create prototypes of their ideas, attorneys who can pursue the necessary patents and trademarks, and investors who can provide capital for commercialization. Some may argue that creating these connections is not within the USPTO’s authority. But this conclusion views the USPTO’s role too narrowly. As a pragmatic matter, the Office is in the best position among existing government agencies to initiate the networking between innovators and professionals as critical parts of its awareness and education efforts. 

IIPSJ further advocates for an expansion of the USPTO’s Patents & Partnership Platform, in response to request (9). Further, the new Community Outreach Office provided for by the UAIA, in coordination with the USPTO Patent and Trademark Resource Centers and the USPTO Patent Pro Bono Program, can serve to both expand IP awareness among  our nation’s Lost Einstein cohorts (pre-college students, veterans, disabled, rural population, senior citizens, students and researchers at HBCU’s) and to connect them with traditional professionals who serve the goals of commercializing innovation. Through the COOs, the USPTO can enhance the coordination between and efficacy of these existing initiatives. 

IP Education for Adult Learners 

Adult learners, particularly students in community colleges, have yet to be fully appreciated for their potential contributions to innovation. Per request (11) and (12), we highly recommend that the USPTO develop programs, modelled on existing programs for K-12 students and veterans, to promote IP awareness and education in community colleges. Existing programs can be tailored to the specific needs of adult learners, through intensive online outreach as well as in person colloquia to identify other “Lost Einsteins” among the adult community.[1]  

Adult education programs in community colleges bridge secondary schools and the universities that are the subject of Bayh-Dole’s largesse.  In 2023, there were 4.5 million students enrolled in public 2-year postsecondary institutions and just under 178,000 students in private for-profit postsecondary institutions.  Sixty percent of students enrolled in community colleges are women, and over a million are Hispanic and over 650 thousand are African American. The pool of talent is diverse and representative of the cohort of “lost Einsteins” that the USPTO seeks to reach. As our research progresses, we would like to expand its scope to study this group of students as potential beneficiaries of intellectual property and entrepreneurship education. Preliminary discussions with policymakers focusing on adult education have proven to be promising and should prove important to expansion of the USPTO’s efforts, per requests (12) and (13)). 

Also, pursuant to requests (11), (12), and (13), including adult learners would complement existing USPTO programs. Veterans are a significant part of the community college and university population, and many have received technical training through their military service. Organizations like the Veterans Administration and the Veterans Center at Syracuse, New York, have valuable information about the veteran population and can serve as a channel for disseminating educational materials on intellectual property and entrepreneurship to this expanding population that is both diverse and a powerful resource for innovation.  Furthermore, adult learners often use the community college system as a bridge to universities, including HBCU’s, a focus for the USPTO efforts to promote innovation. By including adult learners in their purview, the USPTO will fortify its existing efforts to spread education on entrepreneurship and innovation. 

 USPTO/HBCU Partnerships 

Pursuant to requests (9), (11), and (13), specifically, we urge the USPTO to continue and to enhance its efforts to expand IP awareness and initiatives at HBCU’s. The Office’s work has been referenced at several points in these comments. We bring together these various points to emphasize the need to recognize all unrecognized groups as potential innovators. HBCU’s provide well-established and trusted venues through which to carry out the various initiatives for which we advocate. Better financial and educational support for Technology Transfer Offices at HBCU’s can serve as models for other underfinanced educational institutions. Established universities also provide a forum for outreach for IP education and awareness of commercialization, including intermural collaborations and networking with attorneys and investors instrumental to the commercialization of innovation. 

 Conclusion 

Success stories populate newspaper headlines, praising university researchers and high school students who have successfully obtained patents.  These headlines bespeak the power of programs that identify and support IP entrepreneurship education. These programs confront the fact that “A student’s opportunity is too often limited by their zip code, race, and class.”  As the researchers for the “Lost Einstein” project warned: “Innovation has slowed in the U.S., stymying economic growth. To get back on track, the U.S. needs more low-income children, women, and minorities to become inventors—but that won’t be easy.” IIPSJ commends the USPTO’s current initiatives and the present effort to implement a coordinated and expanded national IP and innovation strategy.   

[1] The North Orange County Community College District Center for Entrepreneurship in Anaheim, California offers Adult Education programming which provides a model example of Adult Learner curricular and extracurricular IP awareness and education opportunities. https://nocccd.edu/. 

Federal Circuit Overrules 42-Year Old Precedent on Nonobviousness of Design Patents
June Column
Shubha Ghosh
Crandall Melvin Professor of Law
Syracuse University College of Law

On May 21, 2024, an en banc panel of the United States Court of Appeals for the Federal Circuit overruled the 1982 precedent established by In re Rosen, 673 F.2d 388 (CCPA 1982) for determining when a design patent is nonobvious. The precedent had been affirmed in 1996 by Durling v. Spectrum Furniture Co., Inc., 101 F.3d 100 (Fed. Cir. 1996). Based on these two precedents, the Federal Circuit and lower courts had been following the Rosen-Durling test for determining nonobviousness in design patent law based on combining prior art references. The en banc panel ruled that the test for nonobviousness adopted for utility patents in Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), and affirmed by KSR Int’l Co. v. Teleflex Inc., 558 U.S. 398 (2007). The 10-judge panel voted 9 to 1 to overrule the precedent. Judge Lourie agreed with the majority except for the conclusion that Rosen-Durling had to be overruled since it could fit in to the flexible approached in Graham and KSR.

At issue in this new precedent, LKQ Corp. v. GM Global, is a patent infringement dispute involving a design patent owned by GM Global. The design patent covered the front fender on an automotive body. LKQ challenged the nonobviousness of the design based on two pieces of prior art, a primary reference and a secondary reference in a proceeding before the Patent Trial and Appeal Board (PTAB). Under Rosen, the primary reference had to be “basically the same” as the patented design. Once this primary reference has been identified, the examiner looks to other references to identify differences against which the patented design would be compared for obviousness. The PTAB ruled against LKQ because it failed to produce a primary reference that was “basically the same.” LKQ argued that the Rosen-Durling test had been overruled by the Supreme Court’s 2007 decision in KSR, affirming the Graham test from 1966. The PTAB rejected this argument, the three-judge panel of the Federal Circuit affirmed, but the en banc panel accepted LKQ’s argument.

Under Graham, the nonobviousness inquiry is a three step one involving (1) identification of the relevant prior art; (2) identification of the differences between the prior art and the claimed invention; and (3) determination of whether a person of ordinary skill in the art would find the differences obvious. Secondary factors can guide the third step. Now that the Federal Circuit has ruled that Graham applies to design patents, future cases will address attendant questions, such as who the person of ordinary skill for design patents and the basic question of whether the Federal Circuit correctly extended Graham to design patents. As for the references identified by LKQ, the Federal Circuit addressed the approach under Graham for identifying prior art: (1) the first step is to identify prior art from the same field as the claimed invention and (2) the second step is to identify prior art for similar fields. The en banc panel held that the first step applied to design patents but left open the question of what it means for a design to arise from a similar field. In this case, since both references dealt with front fenders of cars, the second question was not relevant and could be addressed in future cases.

 

By Emily D’Agostino

Medical devices require maintenance and repair throughout their lifetime. Some medical devices require updates so crucial that they rise to the level of remanufacturing. This distinction is important as it will determine the regulatory burden faced by the repairing or remanufacturing entity.

The FDA Guidance on Remanufacturing of Medical Devices distilled its process into the above flowchart which can be used to determine when an activity constitutes remanufacturing. When a device is remanufactured, the remanufacturing entity is generally subject to the same regulatory requirements as the original manufacturer of the device, even when the remanufacturing entity did not itself manufacture the original device. 

 

May 2024 Monthly Column

By Shubha Ghosh, Crandall Melvin Professor of Law & Director, SIPLI & TCLP

On April 24, 2024, the FTC announced a final rule banning most noncompete agreements in employment contracts.  Here are the highlights: 

  • As of the effective date (which is 120 days after publication in the Federal Register), all noncompete agreements in employment contracts for non-senior executives are unenforceable.  
  • Noncompete agreements entered into with senior executives prior to the effective date remain enforceable. A senior executive is a worker earning more than $151,164 annually who is in a “policy-making position.” 
  • The ban would not apply to noncompete agreements that are part of a contract for the sale of a business. 

Separate opinions from the FTC commissioners will be published in a few weeks. In a document of more than 500 pages, the FTC set forth the rationales for its decision. Comments from employees subject to noncompete agreements supported the FTC decision. Service sector employees explained how such agreements prevented them from forming their own competing businesses. Physicians complained about how such agreements with hospitals blocked their forming competing practice groups. Consistent with their authority to prevent unfair means of competition, the new rule will promote competition, the Commission concludes, unleashing new start-ups, innovation through thousands of new patents, and lowering business costs such as health care.  

Legal challenges have arisen seeking to enjoin the rule from becoming effective. While the FTC lays out what its responses will be to challenges based on the Major Question Doctrine and lack of statutory authority, challengers will tug at the contours of these doctrines to have the new rule struck down. There is enough vagueness in these doctrines to garner some votes against the new rule in the current jurisprudential climate. But against these challenges, it is important to point out what claims still exist for employers seeking to enjoin departing employees.  

Misappropriation of trade secrets, theft of confidential information, contract terms such as non-solicitation agreements, and general agency principles will still persist in employers’ arsenal under this new rule. The burden may be higher for an employer seeking to block a new business from an ex-employee. But the burden should be high for interference with the bedrock principles of worker mobility and competition.  

By Emily D’Agostino

The Copyright Office has acknowledged a human authorship requirement in Chapter 300 of the Copyright Compendium. The Copyright Office will refuse to register a claim if a human being did not create the work. See also Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884).   

Since May 2023, the United States Copyright Office has registered claims of copyright in nine literary works containing AI-generated text. The majority of these works contain both human and AI-authored text, and, consistent with the human authorship requirement delineated in the Compendium, the basis of the claim of copyright in eight of these works extends to all human-authored text.   

However, one work, a novel by 60-year-old military veteran Elisa Shupe, is subject to a claim of copyright that extends only to the “selection, coordination, and arrangement of text generated by artificial intelligence.” According to a recent article, the novel, AI Machinations: Tangled Webs and Typed Words, was authored extensively by OpenAI’s large language model, ChatGPT, unlike the other eight works, which contain both human and AI-generated textual components. The U.S. Copyright initially denied Shupe’s application in October of 2023, but overturned the denial and granted registration earlier this month, backdating the registration to the initial filing date.  

Registration of a claim of copyright in an AI-generated novel raises questions about the future of the human authorship requirement. Despite the Copyright Office’s purported limitation on Shupe’s claim of copyright to the selection and arrangement of AI-generated text, traditional copyright protection similarly extends only to an author’s selection and arrangement of words, sentences, and paragraphs. 

 

Apr. 2024 Monthly Column

By Shubha Ghosh, Crandall Melvin Professor of Law & Director, SIPLI & TCLP

On March 21, the Department of Justice filed an antitrust complaint against Apple. The DoJ press release and the complaint can be accessed here. My analysis follows.

The Department of Justice’s antitrust claims against Apple are of two types. One is a challenge to Apple’s contractual practices. The second is a challenge to how Apple has designed the smartphone in order to block competition.

According to the complaint, Apple has used contractual restrictions that make it difficult for app developers to create and distribute new applications through Apple’s platform. These allegations parallel claims made by game developers, such as Epic Games, in its private antitrust claims against Apple. As a side note, although Epic’s suit against Apple has not been successful, Epic did prevail in a jury trial on similar claims against Google. Now the federal government has challenged Apple’s contractual practices against app developers. Epic Games’ failure against Apple perhaps was the result of one judge finding that Apple lacked market power, a necessary requirement for a successful monopolization claim. The DoJ may fare better, especially with the successful challenge to Microsoft’s licensing practices in the 1990’s. As a general matter, federal antitrust law is more successful with claims involving anticompetitive contractual practices as federal courts are more comfortable in addressing problems with contractual terms and practices.

Courts are less comfortable in addressing antitrust claims that would require examining and potentially ordering redesign of technology. The DoJ’s second set of claims are aimed at how Apple has designed aspects of the software underling the iPhone as well as “other critical access points in the smartphone ecosystem.” This daunting phrase suggests the technological minefield that antitrust courts may be hesitant to cross. A “smartphone ecosystem” represents engineering choices of technologists to whom judges would wisely defer. This deference is consistent with the court’s decision to review Microsoft’s software design of its operating system under a lower standard to avoid the question of whether the software design was forcing the use of Internet Explorer over competing browsers.

Will the DoJ’s case be a blockbuster case like its case against Microsoft in the 1990’s? It is still too early to tell but all signs point to a replay of how courts handle issues of contract and software design in high tech markets.

 

By: Beatrice Nkansah

Xtandi is an androgen receptor inhibitor generally used for a treatment of prostate cancer. Developed at UCLA, it was approved by the FDA in 2012 and then re-approved in 2023 for treatment of an additional class of patients.  In attempts to lower the price and increase access to this drug, patients Robert Sachs and Clare Love petitioned to the Health and Human Services (HHS), requesting the exercise of “march-in authority” be used lower the price of Xtandi under the Bayh-Dole Act.  

The Bayh-Dole Act was enacted in 1980 to promote the availability of federally funded inventions for commercialization. The Act assigned intellectual property rights to the research entity receiving the funding rather that the federal government retaining the rights. This incentivizes the recipient of the funding to license out inventions as a means of realizing income and contributing to the public good.  

The Act carves out one exception to all rights being with the research entity. The federal government agency that funded the research retains “march-in rights” that allow the agency to exercise its march-in rights to the invention if four statutory conditions apply. If these rights are exercised, the university would be required to license the patent to third parties. This approach has long been opposed by the pharmaceutical industry contending exercising march in rights to reduce prices would discourage companies from undertaking research and development efforts in the future.  

The NIH rejected the petition, finding Xtandi to be “widely available to the public on the market”. Additionally, the NIH stated that they did not think “march-in authority” would be effective in lowering the price of the drug.  

Sachs and Love appealed the decision, and the HHS affirmed the NIH’s conclusion. Though not explicitly citing to the Xtandi decision of last year, the Federal Trade Commission (FTC) filed comments supporting the expansion to expand the criteria for “march-in authority/rights”. The FTC reasoned that there should be a more flexible approach for relying on “march-in authority” through the Bayh-Dole Act and that “agencies should be wary of imposing categorical limitations on the factors that can be considered for march in, such as price”.  

 

By: Emily D’Agostino

A blockchain is a public, digitized ledger used to store data.[1] Blockchain technologies are used in a variety of settings such as to track asset ownership and document transactions.[2] Blockchain systems are often incorporated within broader processes or comprise one component of an invention or technology.[3] Unlike traditional databases, blockchain systems are decentralized, which makes data storage more secure and easily verifiable.[4] Accordingly, technologies utilizing blockchain have become increasingly valuable. However, innovators seeking patent protection for their blockchain technologies have faced challenges, particularly under the §101 subject matter requirement.[5]

The Patent Act, defines a patentable invention as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”[6] The Supreme Court has interpreted this provision to exclude abstract ideas.[7] In Alice Corporation Pty. Ltd. v. CLS Bank International, the Supreme Court developed an inquiry now known as the “Alice “ test, which is used to determine whether a claimed invention constitutes an abstract idea.[8] The Alice test ultimately looks to determine whether a claimed invention that covers an abstract idea demonstrates sufficient ingenuity, surpassing mere application of the abstract idea.[9]

A recent holding in the Southern District of New York applied the Alice test to dismiss a claim of infringement of a patent claiming a blockchain technology that utilized 3D spectral analysis to digitally map gemstones and store that information using blockchain technology.[10] The Court emphasized that the plaintiff’s patent “is not improving the functionality of storing and processing data on a blockchain.”[11] The Court also acknowledged that “a blockchain is merely a ledger maintained and verified through a peer-to-peer network, and Plaintiff does not describe how the patent improves blockchains.”[12]

The ruling is currently on appeal, but, if upheld, even novel applications of blockchain technology may be unpatentable where those applications do not change or improve the blockchain process itself.[13]

[1] https://www.forbes.com/advisor/investing/cryptocurrency/what-is-blockchain/

[2] Id.

[3] Id.

[4] Id.

[5] https://www.americanbar.org/groups/intellectual_property_law/publications/landslide/2017-18/march-april/patentability-blockchain-technology-future-innovation/

[6] 35 U.S.C § 101.

[7] Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).

[8] Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).

[9] Id.

[10] Rady v. Boston Consulting Group, LLC, No. 1:20-CV-02285 (ALC), 2022 WL 976877, at *1-2 (S.D.N.Y. Mar. 31, 2022).

 

[11] Id. at *3.

[12] Id.

[13] Id.

 

Mar. 2024 Monthly Column

By Shubha Ghosh, Crandall Melvin Professor of Law & Director, SIPLI & TCLP

A civil judgment of an Internet Court in Guangzhou has received global attention reaching beyond the borders of China’s fifth most populous city. At issue were images generated by Tab, an image generating website, propagated by a company, whose name is anonymized in the court’s opinion. A copyright licensing association in Shanghai brought a copyright suit based on allegedly infringing images of the animated character Ultraman generated by Tab. For those unfamiliar with Ultraman, the opinion contains images of copyrighted Ultraman as well as AI generated images found infringing by the court. A bilingual version of the opinion (in Mandarin and English) is also available (complete with legal analysis and pictures).

The court found the images infringing the reproduction and adaptation rights. While the court awarded compensatory damages to the licensing company, it also ordered the company to introduce filters to block the use of Ultraman images to produce infringing works. However, the court declined the removal of copyrighted Ultraman images from the test data used by Tab. Filtering as a remedy raises challenging questions of what technological requirements a court can impose on a company in a copyright suit. Courts in the United States have grappled with the use of filters by companies like YouTube.  The challenging question is how much filtering is required and what triggers a duty to filter. The Guangzhou acknowledges these issues and signals the ongoing litigation they invite.

Ultraman, known for defeating demons threatening innocent populations, is now at the heart of the legal debates over AI. The superhero has earned an initial victory but has also unleashed more potential villains for copyright law to confront. Perhaps one hint of where the disputes will trend is provided by the Guangzhou’s pronouncements about AI:

this court emphasizes that AI is a strategic technology that will lead to future advancement. It is the core driving force for a new round of scientific and technological revolution and industrial transformation, and it is considered to be the main force in generating new quality productive forces. Our nation has undergone rapid development in AI technology. Data and computational resources have become increasingly rich, and new technological developments have become widely applicable. This has set a solid foundation for broadening the scope of AI scenarios. Since the generative AI industry is still at its early stage of development, it is unwise to overburden service providers with duties. In the process of rapid technological development, service providers should actively take reasonable, affordable precautions, thereby promoting the Chinese-style AI regulatory system that is safe and developing, balanced and inclusive, and innovative and protective.

Such an approach to innovation may bear truth for global intellectual property standards.

 

Feb. 2024 Monthly Column

By Professor Shubha Ghosh, Crandall Melvin Professor of Law, Director, Syracuse Intellectual Property Law Institute, & Technology Commercialization Law Program

On February 12, 2024, the Northern District of California dismissed some of the six claims raised by screenwriter Paul Tremblay and his three co-plaintiffs (Sarah Silverman, Christopher Golden, and Richard Kadrey) against OpenAI. The district court dismissed the claims of negligence for failure to show a duty owed to the copyright owners and of unjust enrichment for failure to show fraud, mistake, or coercion. Also dismissed, but with leave to amend, were claims for direct and vicarious copyright infringement (under the Copyright Act) and for removal for copyright management information (under the Digital Millenium Copyright Act). The district court did not dismiss the claim for unfair competition. Most interesting is the court’s ruling that the plaintiffs did not state a claim that the use of the copyrighted works as training data for the large language model was the creation of an unlawful derivative work.  This first salvo in the legal contests over the use of large language models shows how copyright claims against artificial intelligence may not be successful. But unfair competition may have some teeth.

 

Jan. 2024 Monthly Column

By Shubha Ghosh

One up, one down for Epic in its battle to gain ground on Apple and Google distribution platforms for game developers. Over two years after negative ruling in a non-jury trial against Apple, Epic gets a jury victory against Google this week. The presence of a jury might have had a difference for Epic but its underlying cause against Google was arguably stronger with details about how Google arranged its payment deals with developers to reduce competition and tied its game development platform to its payment system. In the earlier Apple trial, Judge Gonzalez Rogers, a federal judge in California, ruled that Apple did not have market power, a ruling that undercut most of Epic’s claims. By contrast, the jury did find Google to be a monopolist and its contracts with developments hindered game development by thwarting competition from a new developers like Epic. Where the two trials covered was on the treatment of Apple and Google’s payment systems. Both were found to be hindering competition with Judge Gonzales Rogers ordering Apple to offer alternatives to its Apple Pay payment platform. The jury found Google to have linked its payment and development platforms in a way that harmed competition. What is yet to be seen is how Judge Donato, presiding in the Google trial, will order the search company to remedy the harms to competition. Will he order Google to pay Epic money, or will there be an order to revamp its development platform? That is an open question, which we will get an answer to in the next year. At that point, the big question will be whether Google will pursue an appeal and whether the United States Supreme Court will eventually weigh in. The next level awaits!

 

Jan. 2024 Monthly Column

By Shubha Ghosh

As many predicted, OpenAI’s response to the New York Times (NYT) copyright complaint about the uses of generative AI using ChatGPT raised the defense of fair use. To win on this defense, OpenAI will have to offer several details about the purposes of generative AI and its impact on the market for NYT’s copyrights. Those details might require a trial but would certainly require a more expansive factual record to be successful. Since much of the NYT’s copyrighted content involves news, or fact-based rather than imaginative or creative works (like novels or memoirs), OpenAI’s fair use defense may be easier to mount. Fair use may be more pertinent for the NYT’s case than for other pending copyright complaints, such as the one brought by Sarah Silverman for the copying of her fictional works. Furthermore, fair use would be irrelevant for the pending consumer class action cases raising claims about improper use of private data by OpenAI. Read the NYT complaint filed in the U.S. District Court here. The Sarah Silverman complaint against Meta here, and against OpenAI here.

 

 Dec. 2023 Monthly Column

By Shubha Ghosh

Crandall Melvin Professor of Law | Director, Technology Commercialization Law Program & Syracuse Intellectual Property Law Institute 

   On December 6, 2023, the United States Court of Appeals for the Ninth Circuit heard oral arguments in Federal Trade Commission v. Microsoft. The Court of Appeals was asked to review the denial of a preliminary injunction to prevent Microsoft’s acquisition of Activision. This acquisition is allegedly anticompetitive in the streaming, subscription, and console markets for gaming. One concern is the potential for Microsoft to limit access to Call of Duty if the acquisition is permitted. 

     The FTC has a difficult case to make for undoing the Microsoft-Activision merger, completed this year. Not only has the European authority approved it, but the FTC’s case rests on past conduct; Microsoft denied access to ZeniMax – the parent company of Bethesda – games after merging with it in 2021. However, Microsoft has expanded access to Minecraft after it acquired Xbox, suggesting the software company might do the same with Call of Duty, Activision’s hit game. 

       The core of the argument had to do with the legal standard for undoing a merger either by showing either that it would foreclose rivals or that it would provide incentive and the ability to harm competition. 

     The FTC argued that, given Microsoft’s dominance in many tiers of the subscription market, it clearly could harm competition. This approach, which one of the judges called “absolutist,” contrasted with Microsoft’s argument that evidence-based projections showed that competition would benefit, especially in the form of increased access to gaming for consumers. The FTC pointed out that benefits to consumers do not necessarily mean there will be no harm to competition, as existing companies like Sony or smaller startups may find it difficult to compete with a giant like Microsoft. There was also debate over the console and cloud markets, where the competitive harm from the merger seemed less likely. 

     This case appears to be an unlikely win for the FTC, but it rouses lots of excitement in the gaming industry. 

 

Dec. 2023

By Madeline Messa

This article provides information on the meaning, use, and importance of CPT codes in commercialization and regulatory compliance.  

What are CPT codes, and how do they work? 

CPT stands for Current Procedural Terminology. CPT coding is a system used to keep track of and bill for medical procedures, services, devices, and drugs by assigning a number to each one of them.  

The American Medical Association (AMA) manages the system.  

CPT codes provide a uniform system across insurers, enabling them to identify and pay for the use or prescription of CPT-coded items. These codes are essential to physicians, hospitals, and other health care providers billing for and receiving payment for services provided.

Without the ability to charge for use of new devices, medical device companies would be hard-pressed to convince hospitals, physicians’ offices, or patients to utilize or purchase them.  

How are CPT codes changed? 

As health care evolves, the AMA is responsible for developing new CPT codes or revising the existing codes, and the Journal of AHIMA publishes annual updates on code additions and revisions.  

The AMA appoints a CPT Editorial Panel, which is responsible for maintaining the CPT code set. The AMA Board of Trustees authorizes the panel to revise, update, or modify CPT codes, descriptors, rules and guidelines.  

The panel is composed of 17 members, including eleven physicians who are nominated by the national medical specialty societies and approved by the AMA Board of Trustees. One of the eleven spaces is reserved for expertise in performance measurement. One physician is nominated from each of the various insurance companies and CMS.  

There are specific procedures for changing CPT codes, as well as criteria for each code category. They regulate requests for revising, adding, and deleting codes.  

Medical specialty societies, individual physicians, hospitals, third-party payers, and other interested parties may submit an application for changes to CPT codes for consideration by the editorial panel. 

The AMA’s CPT staff reviews all requests to modify CPT codes, including applications for new codes. If AMA staff determines that the panel has already addressed the question, staff informs the requestor of the panel’s coding recommendation. However, if staff determines that the request presents a new issue or significant new information on an item that the panel reviewed previously, the application is referred to members of the CPT Advisory Committee for evaluation and commentary. 

How does a new CPT code get implemented?  

Once it becomes clear that an invention shows potential to safely and efficaciously render a diagnosis, treatment, service, or surgical intervention, a campaign begins to have the AMA adopt its use and provide a code for payment. The appropriate AMA CPT Editorial Panel responsible for maintaining the CPT code set receives petitions for consideration.  

Other regulatory compliance issues for medical device commercialization:  

CPT codes are one of a number of regulatory compliance issue for a medical device startup to consider. Other regulatory compliance issues include: