• The Federal Circuit’s Approach to the Infringement Analysis in Hatch-Waxman Cases

    35 U.S.C. § 271(e)(2) provides that it shall be an act of infringement to submit an Abbreviated New Drug Application (“ANDA”) “if the purpose of such submission is to obtain approval … to engage in the commercial manufacture, use, or sale of a drug … claimed in a patent or the use of which is claimed in a patent before the expiration of such patent.” 35 U.S.C. § 271(e)(2). The statute requires that the infringement analysis focus on what is likely to be sold following FDA approval. Bayer AG v….

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  • Intellectual Property Litigator Evan Rothstein Joins Arnold & Porter in Denver

    Arnold & Porter announced this week that Evan Rothstein has joined the firm as a partner in the Intellectual Property practice, resident in the firm’s Denver office. Mr. Rothstein represents individuals and companies in complex and high-stakes disputes and has significant first-chair trial experience.  He advises clients across a broad range of technologies and industries with specific emphasis on media, advertising, software and hardware, gaming, and e-commerce. 

    The post Intellectual…

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  • JOLT – Special Issue on API Copyright

    Just as the Federal Circuit was releasing its decision in Oracle v. Google, Harvard’s Journal of Law & Technology was also releasing its special issue on the topic: Protecting Software Interfaces with Copyright Law. Introduction – Daniel Etcovitch & Kayla Haran Rise of the Copyright API Dead?: An Updated Epitaph for Copyright Protection of Network and […]

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  • Masur & Mortara on Prospective Patent Decisions

    Judicial patent decisions are retroactive. When the Supreme Court changed the standard for assessing obviousness in 2007 with KSR v. Teleflex, it affected not just patents filed after 2007, but also all of the existing patents that had been filed and granted under a different legal standard—upsetting existing reliance interests. But in a terrific new article, Patents, Property, and Prospectivity (forthcoming in the Stanford Law Review), Jonathan Masur and Adam Mortara argue that it doesn’t have to be this way, and that in some cases, purely prospective patent changes make more sense.

    As Masur and Mortara explain, retroactive changes might have benefits in terms of imposing an improved legal rule, but these changes also have social costs. Most notably, future innovators may invest less in R&D because they realize that they will not be able to rely on the law preserving their future patent rights. (Note that the private harm to existing reliance interests from past innovators is merely a wealth transfer from the public’s perspective; the social harm comes from future innovators.) Moreover, courts may be less likely to implement improvements in patent law from the fear of upsetting reliance interests. Allowing courts to choose to make certain changes purely prospectively would ameliorate these concerns, and Masur and Mortara have a helpful discussion of how judges already do this in the habeas context.

    The idea that judges should be able to make prospective patent rulings (and prospective judicial rulings more generally, outside habeas cases) seems novel and nonobvious and right, and I highly recommend the article. But I had lots of thoughts while reading about potential ways to further strengthen the argument:

    1. The article is mostly from the perspective of cutbacks in patent rights that retroactively invalidate patents. Masur and Mortara have some discussion of how strengthening patent rights harms the reliance interests of nonpatentees, but I think they could also make the argument that rule changes that strengthen patent rights should generally be non-retroactive because past innovators won’t have relied on the stronger rule. For example, if diagnostics continue to be generally unpatentable for 20 years, and then patentable subject matter doctrine is revised to make clear that they are patentable, it generally wouldn’t make sense to say that the rule change applies to any diagnostic patents that managed to slip through the USPTO in the intervening years due to sloppy examination—they should still be invalidated under the old rule because those investment / patenting decisions weren’t made in reliance on the new rule.

    2. The current draft considers reliance interests of patentees and nonpatentees based on the law not changing, but I think one could also argue that people in patent-related fields have reliance interests that judges will continue to use patent policy levers to change patent law and get rid of patents that seem to be harming rather than helping innovation. That is, if there seems to be a problem, courts will fix it, even if that means retroactively invalidating patents that are holding back an industry. So some innovators might rely on the knowledge that patent law will change.

    3. More generally, the extent to which retroactive patent rulings harms reliance interests seems like an empirical question that will vary by field. For example, my intuition is that the prospect of business method patents did not actually have that much affect on business method R&D, and that even before the recent patentable subject matter changes, it wasn’t hard to figure out that this was a controversial field in which patenting carried a higher-than-normal risk of future invalidation. And I doubt that the effective elimination of many business method patents has created much concern for patentees in many other fields (e.g., mechanical inventions). And the early empirical work I’ve seen suggests that the effective elimination of many diagnostic patents hasn’t really affected R&D. So I’d love to know more about cases where retroactive changes actually seem to have created reliance problems, along with some concrete examples in which the authors would advocate for making a change in patent law non-retroactive.

    4. Masur and Mortara argue that changes to patent law should not be classified as judicial takings, including because legal change would then be “prohibitively expensive.” But I think this discussion misses the point that the money that would need to be paid to inventors (and raised through public finance) would be offset by a savings to society through elimination of the “shadow tax” those patents would otherwise have provided through above-marginal-cost prices. Government takings of patents would thus not be so different from other proposals for changing the allocation aspect of patents, such as Michael Kremer’s patent buyouts or the Ayres–Klemperer proposal for duopoly pricing, as Daniel Hemel and I discuss in a forthcoming article. There would be additional administrative costs, and yet also administrative cost savings due to less patent litigation / licensing, so it’s not obvious how that cuts. That said, I agree that applying takings law to patents is probably a bad idea—but it’s because for the most part, I think the major changes that have retroactively invalidated a bunch of patents haven’t created huge reliance problems.

    As noted above, I think all of these issues could be addressed in ways that bolster Masur and Mortara’s arguments, or even developed in a separate piece—I’m sure the article will spur many interesting conversations among scholars of patent law and judicial decisionmaking more generally.

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  • Palacci and Szafarczyk on Ten Years of Patent Damages Decisions in France

    Jérémie Palacci and Joséphine Szafarczyk have published a paper titled La fixation des dommages et intérêts en matière de brevets depuis la loi de 2007 de lutte contre la contrefaçon:  10 ans d’application (“Determining Patent Damages After the 2007 Anti-Infringement Law:  10 Years of Application”), in the February 2018 issue of Propriété Industrielle(pp. 10-12).  Here is the abstract (my translation):
    Supplementing the Laws on Intellectual Property of February 4, 1994, March 18, 2003, and March 9, 2004, Law No. 2007-1544 of October 29, 2007 implemented European Directive 2004/48/CE of April 29, 2004.  The result of ambitious work, this law aimed to strengthen the fight against infringement and to more justly compensate the victims.  The legislature addressed itself in particular to drafting a new article L. 615-7 of the I.P. Code concerning the assessment of damages.

    (For previous discussion on this blog of L. 615-7 as enacted in 2007, and as further amended in 2014, see, e.g., here.)  The authors note, among other things, that L. 615-7 made an important break with previous law in expressly authorizing courts to take into account the benefits realized by the infringement.  In addition, they discuss their review of the 94 decisions (first instance, second instance, and Cour de cassation) on damages from January 1, 2008 to June 30, 2017, and provide a breakdown of those in which (for example) the court required expert assistance (nearly a quarter), or in which lost profits or reasonable royalties were awarded, or in which the grounds for the award were unclear.  One interesting note is that there was a “non-negligible number of decisions” in which the court awarded damages for moral prejudice (3) or for harm to monopoly position (7) to make up for a lesser recovery for economic harm.  The concept of moral prejudice can mean different things in different countries (see, e.g., here and here), and as others have noted before French courts sometimes appear to award such damages more as a means of “rounding up” than (e.g.) to compensate for loss of reputation.  (I’m hoping to devote some time this summer to starting work on an article on moral prejudice in IP law among the major jurisdictions.)  The authors conclude that since 2007, compensation awarded to patent plaintiffs in France has expanded, and that fewer and fewer decisions render awards without clear explanation.  Finally, they argue that France should make it easier for courts to review confidential documents which parties are often reluctant to share, so that damages awards can be more accurate.  
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