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Patents and copyrights — cornerstones of intellectual property law — are suddenly under high-profile scrutiny from the federal government through a series of legal and regulatory moves that could alter the landscape for inventors, corporations and the public. At stake is a fundamental question of balance between IP holders and their right to control access to their properties and others who want more leeway to use them. Earlier this month, the Federal Trade Commission and Department of Justice launched joint hearings that could determine whether IP policies conflict with antitrust laws and are being used as a weapon to hinder competition. At the same time, the National Academy of Sciences is conducting a separate study of IP rights to find out how to address concerns that companies are feeling undue pressure to patent. All three agencies are holding local hearings to get input from area academics and corporate executives. The U.S. Supreme Court also got into the act last week, agreeing to review a case that may decide the constitutionality of a 1998 law that added 20 years to the term of existing copyrights. The case is being closely watched by corporate interests, which face the loss of copyright protection for some of their most valuable pieces of intellectual property. The current interest in IP law by the government and Supreme Court is “part of the same tension going on these days” between IP owners and those who want greater public access to patented and copyrighted works, said Michael Barclay, a partner at Wilson Sonsini Goodrich & Rosati in Palo Alto, Calif. “The real debate is how much to incentivize inventors and authors when increasingly powerful monopolies tend to remove works of authorship and invention from the public domain,” Barclay said. The problem in extending IP protection too much is that it “reduces the ability of the public as a whole to create new works.” ECONOMIC IMPACT The issues have become increasingly critical as intellectual property’s impact on the economy has grown. The number of patents issued annually has skyrocketed from 66,000 in 1980 to 175,000 in 2000. Royalties from patent licensing also grew dramatically from $3 billion to nearly $110 billion between 1980 and 1999, according to David Braunstein, of the Stamford, Conn., consulting firm, Fairfield Resources International Inc. Greater economic influence has brought with it a proliferation in patent infringement litigation. The increase in infringement disputes has sparked debate over whether the U.S. Patent and Trademark Office is issuing overly broad patents and whether corporate licensing practices are fair. “There are a lot of high-profile cases going on, from the battle over pharmaceutical patents and AIDS, to the British Telecom trial [over the company's claim to own the patent on hyperlinks] and the flap over Internet business methods,” said Boalt Hall Professor Mark Lemley. Just three years ago, Congress took on a major overhaul of the patent system, passing the broadest reform legislation in decades. But the measures still haven’t answered key questions — sparking much of the current fuss over IP rights. The National Academy of Sciences started the ball rolling when it launched a study of IP in January 2000. Initially, NAS sought to find out whether the strengthening of IP rights since the early 1980s was responsible for the improved performance of U.S. industries. Steve Merrill, the NAS staffer in charge of the study, said the academy also became aware that academics and industry leaders were unhappy with the proliferation of patents. Company officials complained that there is “sort of a patent arms race,” Merrill said. “Everyone is patenting maddeningly to avoid being pressured to take licenses or avoid litigation.” The academy put together a 12-member committee led by Yale University President Richard Levin, which is to issue a report in September. Merrill said the committee will address such issues as whether research should be exempted from infringement liability; the adequacy of PTO resources; how to resolve patent validity disputes without litigation, and how to reduce duplication of work by patent offices in the United States, Japan and Europe. CIRCUIT’S SCOPE Meanwhile, the FTC and DOJ are focusing on standard-setting groups, cross-licensing and patent pools, unilateral refusal of patent or copyright holders to license their IP, the proliferation and scope of patents, and the jurisdiction of the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit was created in 1982 to exclusively handle appeals in patent infringement suits. FTC Chairman Timothy Muris said in a speech in November that the court has expanded its jurisdiction over antitrust issues by applying its own law rather than regional circuit law. While the court’s broader jurisdiction has rankled some in the antitrust bar, former PTO Commissioner Q. Todd Dickinson said “most patent lawyers regard the creation of the Federal Circuit as a cornerstone of IP reform of the 20th century.” Dickinson, a partner with Washington, D.C.’s Howrey Simon Arnold & White, said giving the court exclusive jurisdiction in patent disputes provided certainty in the law and “did away with forum shopping.” FTC and DOJ will be holding hearings on the University of California, Berkeley, campus this week featuring testimony from Bay Area lawyers, scholars and corporate officials. In addition, the Berkeley Center for Law & Technology at Boalt Hall School of Law is holding a conference on patent system reform March 1 and 2. For its part, the Supreme Court will be focusing on a narrower intellectual property issue — whether Congress has a right to continually extend the term of a copyright. Before the Sonny Bono Copyright Term Extension Act was enacted in 1998 — at the urging of the Walt Disney Co. and other corporations — the length of a copyright was the life of the author plus 50 years or, in the case of corporate works, 75 years. The new law added 20 years to copyrights. Last year the U.S. Court of Appeals for the D.C. Circuit ruled 2-1 that Congress had acted within the bounds of the Constitution in passing the law. Representing Web site operator Eric Eldred, Stanford Law School Professor Lawrence Lessig argued that the statute violates the First Amendment and is inconsistent with the constitutional requirement that copyright be secured for “limited times.” The Court’s decision to hear the case is being characterized by some as a surprise move and is likely to generate a deluge of amicus briefs from corporations that want to keep the law on the books. Despite the flurry of interest in revising intellectual property laws, some lawyers and legal scholars are skeptical that significant change will occur. Movements to reform or abolish the patent system “tend to flare up and die away,” said Mark Janis, a professor at the University of Iowa College of Law. “Often times people are repeating some of the arguments presented over the previous 150 years,” such as the call for compulsory licensing. Perhaps one major reform came about in 1836 when the patent registration system was replaced with an examination system. Since then a few minor changes have been made, he said, such as revising the patent term and requiring notification of pending applications. Reform doesn’t come about “by dramatic lightning strikes,” Janis said. “There are modest changes that only patent lawyers seem to care about.”

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