The 2020 Intellectual Property Year in "Preview" Article*
*Also Known as “I’ll Be Right, Sooner Or Later”
You could make a good argument that courage is a mistake of evolution. We’d all be better off just running away from a hungry saber-toothed tiger. (Those things were huge! And have you seen their teeth?!) But, at some point, some lucky caveman stood his ground, or, more likely, the fierce animal had a case of indigestion and passed. Nevertheless, the cavewomen were impressed, and the mutant gene for courage somehow got preserved. It’s a shame. If he’d only been eaten, I’d never even think to write a third—yes, third—Intellectual Property Year in Preview article. Thank you, caveman, for making me immune to public humiliation.
The truth is, though, perhaps I’m pretty good at this, and my fears are unfounded. As it turns out, my 2019 predictions turned out to be not half bad (in the sense that I was sort of correct on two out of three, which is about half bad, but also half good, depending on how you look at it).
Of course, back then I was merely Chief IP Counsel of a large multi-national, world class company, as opposed to my present position as Shareholder at Vedder Price P.C., a multi-national world class law firm. Will that change affect my predictive powers? Check back next year to find out.
In any event, in 2019, I made the following three predictions.
Data Breaches and Electronically Stored Information.
While it’s true that data breaches have continued to make headlines, my specific prediction that cost-cutting e-discovery vendors who scrimp on data security might be targets turned out (thankfully) to be inaccurate—that I know of. But, the combination of the most highly sensitive business information, coupled with increased competition in a space that is becoming commoditized, makes me concerned that this is still a matter of when, and not if. We should continue to vet our e-discovery vendors carefully and ensure their file repositories are as secure as can be.
Trade (Secret) War with China.
I predicted, “The trade war will precipitate talks of a bilateral intellectual property treaty between the U.S. and China on the protection of trade secrets and technology transfers.” Well, it took nearly the entire year, but on December 13, 2019, China and the United States announced a “Phase One” agreement that included heightened intellectual property protections, and a commitment from China “to end its long-standing practice of forcing or pressuring foreign companies to transfer their technology to Chinese companies as a condition for obtaining market access, administrative approvals, or receiving advantages from the government.” (See https://ustr.gov/sites/default/files/US-China-Agreement-Fact-Sheet.pdf). Well done, Dan!
Artificial Intelligence as Real Inventors.
There is an increased recognition that AI has become so advanced, that AI systems actually create (i.e., invent) new things, and the patent laws (and copyright laws) need to adapt to non-human inventors. I predicted: “Either through litigation, appeal of a rejected AI-invented patent application to the PTAB, or through some legislative proposal, the issue of how the patent system will treat AI invented inventions will receive significant attention.” Turns out I was right again. In August, 2019, the U.S. Patent and Trademark Office (PTO) issued a Federal Register Notice, 84 Fed. Reg. 166 (Aug. 27, 2019) entitled, “Request for Comments on Patenting Artificial Intelligence Inventions.” On October 30, the PTO broadened its inquiry by issuing another Notice, 84 Fed. Reg. 210 (Oct. 30, 2019) entitled, “Request for Comments on Intellectual Property Protection for Artificial Intelligence Innovation.” Finally, on December 3, 2019, the PTO issued a third notice, extending the comment period on the earlier notices to January 10, 2020. All of the notices can be downloaded from the PTO’s web site at https://www.uspto.gov/learning-and-resources/federal-register-notices/federal-register-notices-2019. Another pat on the back for me!
So, what do I predict for 2020? As the saying goes, “frequently wrong, but never in doubt,” here are my 2020 predictions for the year in intellectual property:
Don’t Hold Your Breath on Patent Reform.
Aside from the practical reason that Congress promises to be otherwise occupied in the coming months, I think it extremely unlikely that we see any kind of patent reform get serious consideration in Congress in 2020. There are several reasons for this. First, there doesn’t appear to be any single issue Congress can coalesce around that merits their attention. Second, although the issue that would have the most popular support would likely be some reform of the Hatch-Waxman Act—the part of the patent statute that deals with the rights of branded and generic drugs—I think Congress is unlikely to use patent laws to affect the nation’s health care system. While there is bipartisan support for bringing down the price of prescription drugs, it is, after all, an election year. The cynic in me says that Democrats, who are going to run on an overhaul of the health care system, still need high drug prices to make their health care proposals (such as Medicare for all or other single payor programs) more compelling, and are therefore loath to diminish health care as an issue they think they are clearly winning on in 2020. Similarly, I doubt the Republicans want to hand them a win on health care going into 2020. Having said that, the recent revamped trade agreement with Mexico and Canada stripped some protections that the pharmaceutical industry had been pushing for, so the tide may be turning against the formerly intractable pharmaceutical company interests. Still, there are too many levers to pull in the health care wars between Republicans and Democrats, and I’m dubious they’ll use the patent laws to tip the scales one way or another while 2020 plays out. My prediction: Congress stays out of patent law in 2020.
A Boring Year at the Federal Circuit.
We (the Federal Circuit included) have spent a lot of 2019 perseverating about Alice and subject matter eligibility. The PTO, too, has gotten into the act by issuing new examination guidelines (a tricky business in and of itself given that the Federal Circuit has been remarkably inconsistent in its application of the law). It’s not as if the Federal Circuit is unaware that nobody quite knows, from case to case, what is eligible subject matter under 35 U.S.C. § 101. It’s just that they don’t seem to have the appetite to do anything about it, much to the chagrin of certain members of the court, as evidenced by the dissenting and concurring opinions in, for example, Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, 927 F.3d 1333 (Fed. Cir. 2019) (denying petition for rehearing en banc). (See http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-2508.Order.7-3-2019.1.pdf). What is apparent is that the Federal Circuit believes itself bound by the Supreme Court’s interpretation of § 101 in cases like Alice and Mayo, and will continue to apply the law as best as it can, at least until the Supreme Court revisits the issue (and the Supreme Court has yet to exhibit any inclination to do so, or at least has not found the right case in which to correct course). Beyond subject matter eligibility issues, there does not appear to be any other issue bubbling up needing resolution by an en banc court. In the past, it was clear that correction was needed on claim construction, and the court decided Philips. When inequitable conduct law became muddled, the court decided Therasense. Here, though, the court seems to consider itself powerless to clear the § 101 muddle. My prediction: Without any other issue bubbling up, I think it will be more of the same from the Federal Circuit in 2020.
Trademarks Go on Offense.
While patent law may be stuck in the mud during 2020, I expect novel trademark issues to sprout up like weed(s). Two things contribute to my belief that trademark issues may be on (a) high this year. First, with decriminalization and legalization of marijuana taking hold across the country, previously illegal, but now legitimate, marijuana businesses are budding up all over. These businesses have goodwill, and brands, and logos, and where you have those elements, you have needs for trademarks. Second, the Supreme Court’s 2019 decision in Iancu v. Brunetti, 139 S. Ct. 2294 (2019) (see https://www.supremecourt.gov/opinions/18pdf/18-302_e29g.pdf) that the PTO must register “immoral or scandalous” trademarks even if offensive means that trademark protection (at the federal level) is available to marijuana-related marks. Predictably, marijuana-related filings at the PTO have risen higher than [insert preferred marijuana analogy here]. There’s a catch, though. Marijuana is still illegal under federal law, and even in light of Iancu, the PTO can still refuse registration for illegal business enterprises. So, the PTO’s 2019 examination guidelines for marijuana-related applications require that the description of goods be limited to goods having “less than 0.3% THC,” i.e., the legal limit for cannabis under federal law. That may still blunt the effectiveness of trademark registrations for many cannabis businesses, but there is an alternative. Where state trademark registrations have often been seen as mildly useless endeavors, in states with legal marijuana, a business owner can get a registered state trademark without the THC limitation. Whereas state and federal trademark law have been almost entirely co-extensive for decades, suddenly, that state law cause of action for trademark infringement just became a powerful tool. My prediction: Some really interesting trademark cases will be decided under state law instead of the Lanham Act in 2020.
So, ladies and gentlemen, that’s a wrap on my third annual Intellectual Property Year in Preview. As I say every year (or if I don’t, I should), I may not be correct in my predictions, but at least I’m foolish enough to make them.
Happy Holidays to all my readers, and wishing everyone continued success, health and happiness in 2020.