In life, certainty comes in the form of death and taxes. In intellectual property law, it comes in the form of change.
The quick pace of technology and the complexities of the digital world are forcing changes in all areas of intellectual property. “IP is somewhat of a moving target,” says attorney Mike Powell of Powell IP Law. “I think there is more uncertainty and really more uncertainty in acquiring and enforcing patents and trademarks, in particular, than we’ve seen in many years,” he says.
On the horizon for the practice is a shift from litigating to mediation and arbitration. “With the economy taking its toll on the industry, we’re seeing more people say, ‘You know, let’s take control of our dispute,’ and I think they’re going to do that through mediation and arbitration,” Powell says.
Legal models are changing, too. “Legal departments that traditionally would hire outside counsel to handle litigation matters by the hour are now able to tap into networks of lawyers who are great litigators who are handling these cases on a contingency,” he says. “We’re seeing more of that than we’ve ever seen in the past.”
To gain some insight into upcoming trends and issues in the different areas of intellectual property, the Daily Report turned to a few well known—and not so well known—names in Georgia’s IP community.
An upward trend in the number of patent filings will continue in 2014, says patent attorney Bill Needle. The America Invents Act (AIA), which changed the filing system from a “first to invent” to a “first inventor to file” system, is partially responsible for the increase, but not totally.
“While AIA has certainly helped to spur filings, perhaps more rapidly than it would have been under the old system,” says Needle, “when you look back over a 10-year period you can see that there has been a tremendous trajectory upward, even under the old system of filing.”
With more patents come more litigation. But an increase in patents is not the only reason for more litigation, says Needle, a partner with Ballard Spahr. “I just think that more attention is being paid to trying to preserve your position, your little niche in whatever business you’re in, because of so much competition.” Needle says with the increase in patent litigation, settlements may happen more often and earlier than usual in order to keep costs down.
The high-profile Apple lawsuit against Samsung, which involves numerous patent issues involving smartphones and tablet computers, has brought design patents to the forefront.
“The idea that you can get a patent for how it [a product] works as well as what it looks like has been an awakening,” says Needle. “You will now see more design patent activity.”
Needle says design patents will also reach into the very “sexy area” of fashion design. “Design patents are powerful,” he says. “They are cheaper, they are quicker to issue from the patent office, and they can be just as effective as the old-fashioned utility patent applications.”
University of Georgia law professor Joseph Miller cites the U.S. Supreme Court’s ruling in spring 2013 that dealt with DNA patents as a case that will have implications in the upcoming year. The justices unanimously ruled that human genes can’t be patented, but synthetically produced genetic material can.
“The lower courts are continuing to have real trouble figuring out how to apply the Supreme Court’s standards for when something is too abstract to be patentable,” say Miller. “I think that issue is an important one and there will continue to be significant developments.”
Expect lawmakers to address lawsuits by nonpracticing entities (NPEs) or “patent trolls,” investors who buy up a patent portfolio to obtain licensing fees, says Miller. “Congress is actively considering further changes to patent law that directly responds to this trolling problem,” he adds. Congress has introduced several bills in recent months to rein in the troll activity.
Globalization has changed traditional territorial limits on intellectual property, and extraterritoriality patent law is going to get the Supreme Court’s attention, says Emory associate dean and law professor Tim Holbrook. He says the justices “have been taking that issue up in nonpatent issues so that dynamic of U.S. law applying to activity abroad is on their radar.”
Holbrook says there also will be some Supreme Court activity with software inventions. “Developing software is not nearly as cost intensive as developing a new drug, so I think just the sheer number of them is a problem.”
Not only is there an increase in trademark litigation but also the venues for litigation are on the rise, according to trademark attorney Bill Brewster.
“California and New York represent a substantial portion of the trademark litigation, but it feels as if more cases are getting filed in different venues,” Brewster says. “People are choosing different jurisdictions for a whole range of reasons, including the fact that they may be doing some forum shopping for law that they think is particularly favorable.”
Brewster, a partner with Kilpatrick Townsend & Stockton, also foresees more activity in product configuration. “People are being more creative about approaches to protect what they think is an important part of the brand,” he says. “They are thinking about [protection] earlier.”
Historically, trademark cases have involved only injunctions, but Brewster says he is beginning to see more trademark cases that involve monetary relief and damages. “People are pushing cases harder,” he explains. “People just aren’t as satisfied with an injunction.”
The issuance of new generic top-level domain names, or gTLDs, will be of particular interest for practitioners, says attorney Mike Hobbs, a partner at Troutman Sanders. “Right now there are 22 generic top-level domain names,” he says. Common gTLD names are .com, .net and .edu.
Hobbs says the Internet Corporation for Assigned Names and Numbers (ICANN) put out a proposal for applications for entities and companies that would service new gTLDs, and it has 1,400 new gTLD names pending.
“If you think about all the domain infringements and cybersquatting and trademark infringements that go on today with 22, the concern is if you have 1,400, it’s going to be crazy,” says Hobbs. “If you’re a brand owner, what are you going to do about all of these new domain names that are going to be coming on line?”
Hobbs says social media is an area that will continue to create challenges in trademark. “As social media expands,” he says, “the trademark issues continue to expand with it.”
The ongoing conflict between copyright and new technology will pick up steam, says Kilpatrick associate Andrew Pequignot. “Copyright law has always been strained by introductions of new distribution methods and devices that facilitate copying, but I think it’s fair to say that the pace at which these changes are taking place are probably greater than ever before,” he says.
Pequignot predicts there will be some changes in the law, pointing to the Register of Copyrights’ pronouncement this year that it’s time for the “next great copyright act.”
“The Internet challenges traditional concepts of copyright, which was really developed for a physical world rather than a digital world,” says Pequignot.
According to Pequignot, another issue is cyberlockers or third-party online services that provide file storing and file sharing services.
“If you’ve got music that you’re storing in a cloud, what are the legal implications of that? ” asks Pequignot. “ You have companies designing what really are inefficient systems to try and fit within existing law. At some point you are going to see more of a push to tackle these issues in some way.”
University of Illinois law professor Paul Heald points to another area to watch in copyright law at the Library of Congress. The Librarian of Congress reviews copyright laws every three years and has the authority to create exceptions.
Exceptions in recent years have affected technology, Heald says, including a recent exception that allows users to “jail-break” cellphones. In other words, “you’re allowed to actually, if you want to, put an app on your iPhone that isn’t an Apple app. … You can put an Apple app on a Samsung phone,” he says. The phones are programmed to make the change difficult, but it can be done legally.
“The librarian’s ability to actually create exceptions has really significant impact and effects on this super-huge market for cellphone applications and also the ease of which people can switch cellphone companies,” says Heald. Starting in January, cellphone users will need permission from their carriers to unlock their phones. With an unlocked phone, users can switch between cellphone carriers.
The U.S. Supreme Court’s ruling in Kirtsaeng v. John Wiley & Sons this past March will have a significant impact on copyright law. The case involved a student, Supap Kirtsaeng, who came to the United States from Thailand to attend college. He had family members purchase textbooks in Thailand and send them to him in the United States, where he resold them on eBay at a profit. Eight of the textbooks were made by the U.S. company John Wiley & Sons, who sued Kirtsaeng. The Supreme Court ruled in favor of Kirtsaeng, using the “first sale” doctrine as its argument in support of the resales.
“What’s clear right now is copyright owners can keep out counterfeit and infringing goods, but they can’t keep out goods that they themselves made [legally] overseas and shipped overseas,” says Heald. “It really has a huge effect on what goods can and can’t be imported in the U.S.”
A final trend to watch, says Heald, is a little-known provision in copyright legislation that went into effect in 1978. The law gave musicians and songwriters termination rights, allowing them to reclaim their copyrighted material 35 years after signing over their rights to record companies. “Everybody was expecting a huge onslaught of litigation, but there seems to be a lot of negotiating going on,” he says.