Intellectual property rights involve billions of dollars of economic value. From software code to industrial patents, companies must remain vigilant about threats to their IP rights and must stay abreast of legal and regulatory changes.
The pandemic caused a slowdown in IP jury trials across the country in 2020, even in the Eastern District of Texas—normally a hotbed of IP activity. But 2021 has seen an uptick in high-profile IP cases in federal courts. The US Supreme Court has issued two important rulings so far: one striking down the NCAA’s ban on college athletes profiting from their name, likeness, or image, and another handing Google a major victory over Oracle. The Google case (addressed below) holds enormous implications for the tech industry. Other federal matters are pending—Epic Games’ antitrust case against Apple went to trial earlier this year with judgment expected to be rendered this fall, and its antitrust claim against Google continues. Google is also the target of various states’ antitrust claims, and Apple may be next.
Congress also addressed IP issues, with the Trademark Modernization Act and two other pieces of related legislation in the final COVID-relief package of 2020. And early into this current session, the 117th Congress reintroduced the Investor Diversity for Economic Advancement (IDEA) Act after the bill stalled in the 116 th Congress.
The April 2021 resolution of the Google case arrived more than a decade after Oracle Corp first sued for copyright infringement in a San Francisco federal court. The Supreme Court’s 6-2 decision states that Google did not violate federal copyright law by using Oracle’s software code to build the Android operating system. Specifically, “Google’s copying of the Java SE API…was a fair use of that material as a matter of law.”
The opinion adhered to a long-term trend of reversing the ruling of the US Court of Appeals for the Federal Circuit, “a specialized body that tends to protect intellectual property more aggressively than does the Supreme Court,” according to Harvard Law Professor Noah Feldman.
Writing for the majority, Justice Stephen Breyer wrote that “Google’s copying was transformative” and that the code was “repurposed” in a way that helps developers.
In the dissent, Justice Clarence Thomas took issue with the Court for avoiding what he considered the primary issue in the case—whether “declaring code is protected by copyright.” The majority’s decision that copying declaring code is fair use effectively sidesteps the copyright determination. In Breyer’s words, “the declaring code is, if copyrightable at all, further than are most computer programs (such as the implementing code) from the core of copyright.”
Many describe the ruling as a landmark in copyright law and a win for both consumers and programmers. The Court’s interpretation of fair use should have lasting implications for many industries. The Motion Picture Association, which filed an amicus brief in support of Oracle last year, and the Internet Accountability Project were among the industry groups opposed to the ruling.
The distribution of COVID-19 vaccines raises difficult questions about the role of the United States in fighting the virus worldwide. US lawmakers and several nonprofit groups are pushing for a temporary “moral” waiver of IP protections to help poorer countries with vaccine production.
This push began in October 2020, when delegates from India and South Africa proposed it to members of the World Trade Organization’s Council for Trade-Related Aspects of Intellectual Property Rights. Proponents of the waiver—like the World Health Organization—argue that profits and IP rights must be second to saving lives.
Critics of the waiver claim that easing IP rights could have global safety implications, set a precedent allowing scientists worldwide to copy American and European companies’ research before the patents have expired, and provide a disincentive for pharma companies to improve current vaccines and production capabilities. Opponents include the European Union, the US Chamber of Commerce, and notable vaccine makers Pfizer, Moderna, and Johnson & Johnson.
When the waiver was introduced, the United States—along with the United Kingdom, members of the European Union, and many other countries—opposed it. The Biden Administration later endorsed the move but took a backseat position in the WTO negotiations. The European Union has proposed alternative measures to the waiver. As of this writing, with many WTO delegates on summer vacation, the WTO has not approved the waiver, and delegates are not expected to consider the measure against it before September 6, 2021.
The 6,000-plus-page COVID-19 stimulus package Congress passed in late December 2020 contained three pieces of IP legislation: The Trademark Modernization Act of 2020 (TMA), the Copyright Alternative in Small Claims Enforcement (CASE) Act, and the Protect Lawful Streaming Act (PLSA). The bills should make it easier for rights holders to pursue infringement claims.
These acts may not have received much attention compared to other stimulus measures, but their provisions represent substantial changes to copyright and trademark law.
In late April, Congress reintroduced the Investor Diversity for Economic Advancement (IDEA) Act, with bipartisan support; the bill is pending before the House and Senate Judiciary committees. The act would empower the USPTO to collect demographic information about investors (voluntarily disclosed) and would require USPTO to report the information to Congress annually. According to the bill’s sponsor, Representative Nydia Velázquez (D-NY), Chairwoman of the House Small Business Committee, the bill will foster innovation by making “the U.S. patent system more equitable and allow more women, people of color, and other disadvantaged groups to develop their inventions.”
As COVID restrictions are lifted and American institutions return to more normal operations, many IP cases delayed in 2020 will receive jury trials. It will be interesting to see what develops in IP law throughout the rest of the year.
The attorneys at Johnston Clem Gifford routinely advise clients on regulatory compliance and other supervisory and governmental matters. Contact us online or by calling (214) 974-8000.
