When patent holders employ the threat of an injunction as a weapon against competitors, it raises eyebrows among antitrust lawyers and agencies instinctively. Such is the case when standard-essential patents are used to hold members of standard setting organizations hostage by threatening sunk technology investments. Prominently last year, Google purchased Motorola Mobility Inc., which included 17,000 patents predominately relating to smartphones, and Apple and Microsoft acquired Nortel Networks and its 6,000 telecommunications patents. The FTC and the DOJ reacted with concern about potential patent abuse in light of the ever-more salient “smartphone patent wars.” In this setting, Renata Hesse, Deputy Assistant Attorney General at the DOJ, and Joseph F. Wayland, then Assistant Attorney General of the FTC, published governance suggestions aimed at lessening the likelihood of hold-up in the standardization process. This article applies a law and economics analysis to three of the suggestions: disclosure requirements, cross-licensing provisions, and limitations of exclusion through injunctions. The discussion addresses problems relating to joint negotiation and monopsony, as well as royalty stacking and cournot complements. It demonstrates how cross-licensing among upstream firms can effectively raise their downstream rivals’ costs, and it explores the concept of “reverse hold-up.” The article finally concludes that Hesse and Wayland identify critical issues, but fail to provide a fully satisfying solution to the problem of standard-essential patent hold-up. Standard-essential patents can be used to hold members of standard setting organizations hostage by threatening sunk technology investments. Renata Hesse, Deputy Assistant Attorney General at the DOJ, and Joseph F. Wayland, then Assistant Attorney General of the FTC, published governance suggestions aimed at lessening the likelihood of hold-up in the standardization process. This article applies a law and economics analysis to three of the suggestions: disclosure requirements, cross-licensing provisions, and limitations of exclusion through injunctions. The discussion addresses problems relating to joint negotiation and monopsony, as well as royalty stacking and cournot complements. It demonstrates how cross-licensing among upstream firms can effectively raise their downstream rivals’ costs, and it explores the concept of “reverse hold-up.” While Hesse and Wayland identify critical issues, they fail to provide a fully satisfying solution to the problem of standard-essential patent hold-up.
Part of the Team: Building Closer Relationships Between MLB Teams and Independent Agents in the Dominican Republic through an MLB Code of Conduct
Every year in the Dominican Republic, hundreds of boys enter baseball academies run by one of Major League Baseball’s (MLB) franchise teams. When the vast majority of these athletes, who have devoted their lives to baseball, eventually wash out of the academy system after two or three years, they are thrown back into the working population with little education and no transferrable skills to show for the years they spent playing baseball. In the Dominican Republic, the situation is exacerbated by the treatment that players receive before they even get to the MLB academies, by independent handler-agents known as buscones. Given the type and scope of labor rights violations that occur as a result of MLB’s presence in the Dominican Republic, MLB should promulgate a voluntary corporate code of conduct to govern the relationship between MLB and buscones in the Dominican Republic. Any solution should encourage cooperation between MLB, the teams, buscones, and the Dominican government, instead of punishing players or forcing teams to leave the Dominican Republic if violations are found.
Despite the continued reliance on the rhetorical device that modern invention is performed by individual inventors in their garages, few would disagree that today most patentable inventive activity occurs in corporate and university settings and that most individuals who would be labeled “inventors” in the twenty-first century are employees of a corporate entity. Yet, while copyright law’s work made for hire doctrine automatically vests employers with ownership of works made within their employees’ scope of employment, except in a few limited circumstances, patent law continues to require a written assignment of the rights to a patented invention. In order to resolve resulting issues and bring patent law into the twenty-first century, the Patent Act should be amended to borrow from the Copyright Act and adopt a principle similar to the work made for hire doctrine that would grant employers the rights to their employees’ inventions made within the scope of their employment.
Post-Booker Judicial Discretion and Sentencing Trends in Criminal Intellectual Property Cases: Empirical Analysis and Societal Implications
As a result of the Supreme Court’s 2005 decision in Booker v. United States that rendered the United States Sentencing Commission’s Sentencing Guidelines advisory only and no longer mandatory, district courts now enjoy significant discretion in determining the appropriate sentence for convicted offenders. By analyzing federal sentencing data for sentences imposed between 1997 and 2011, this article presents an empirical analysis of how Booker has impacted the ways in which district courts impose sentences on offenders convicted of intellectual property crimes. This analysis reveals, inter alia, that (1) sentences imposed on intellectual property offenders deviate from Guidelines-recommended sentences in two out of every three cases; (2) prosecutors seek and judges impose reduced sentences for intellectual property crimes more frequently than for other comparable crimes; and (3) judge-initiated downward deviations from the Guidelines occur after Booker about seven times as frequently for intellectual property offenders than for other offenders, whereas such judge-initiated deviations before Booker occurred less frequently than for crimes in general or for other economic crimes.
The Patent Act’s omission to define inventorship leaves a paramount concept in a legal vacuum. Where courts have stepped in to fill the void, they have largely deferred to the inventor, and joint inventor, status articulated in the patent claims. This fixation fails to accurately reflect the contributions of those who, by common understanding, are inventors. In doing so, the patent system incentivizes not invention, as the Constitution and Congress conceived, but legal claims of invention, playing to the advantage of the legally sophisticated rather than the scientifically innovative. In this article Professor Fellmeth explores this fundamental disconnect, and proposes several legal solutions.
In July 2011, a consortium of major content providers and Internet service providers announced their intention to implement the Copyright Alert System, a graduated response plan aimed at stemming online copyright infringement by individual users. While other commentators have examined the rise of these systems abroad and certain potential issues with the implementation of such measures in the United States, little has been said about the antitrust implications of a private system of copyright enforcement. This article recounts the history of online infringement leading up to the Copyright Alert System and then analyzes the system from the perspective of antitrust law, taking the position that the system announced raises significant antitrust concerns. The article concludes with recommendations for improving the current system to protect the rights of consumers.
In recent years, politicians, academics, and industry professionals have argued vehemently that copyright protection should extend to cover fashion designs, which are currently excluded under the “useful articles” doctrine. Copyright in the United States is built on economic principles and aims to incentivize innovation. After reviewing the legislative history and other arguments made by proponents of fashion copyright, a different picture emerges: supporters of fashion copyright view fashion as “art” and feel a sense of harm when it is cheaply or slavishly copied. Even if designers feel no economic harm from the copying of their creations, they are morally harmed by it. Perhaps then moral rights law, not copyright, provides the appropriate theoretical framework in which to analyze the extension of further protections to fashion design.
Work as Weapon, Author as Target: Why Parodies That Target Authors (Not Just Their Works) Should Be Fair Uses
In April 2011, comedic musician “Weird Al” Yankovic sought Lady Gaga’s permission to release his song “Perform This Way,” a spoof on Lady Gaga’s “Born This Way” that parodied the artist herself, rather than the original work. But did he even need Gaga’s permission to borrow from her hit song? Courts have only recently begun to consider whether to treat these “author parodies” more like traditional parodies, satires, or something else entirely. The Supreme Court and the circuit courts have yet to address the issue, and the few district courts that have weighed in have propounded opposite holdings. Given the prevalence of author parodies such as “Perform This Way” in popular culture, how the law eventually decides to view these distinctive works will have significant implications for authors and appropriators alike. This article presents both an economic and legal argument for privileging author parodies in a fashion similar to parodies of a work.
Recent appearances of trademarks in popular culture—in rap lyrics, on reality TV shows, even in youth riots—have raised the question whether the owners of those trademarks might pursue legal remedies to protect their brands from unwanted social associations. This Article argues that they cannot, and that we should understand this limitation on trademark rights as grounded in a principle that consumption of certain brands is an expressive act that First Amendment principles place outside trademark owners’ control.
Choking the Channel of Public Information: Re-Examination of an Eighteenth-Century Warning about Copyright and Free Speech
The U.S. Supreme Court in Eldred v. Ashcroft gave First Amendment importance to the topic of copyright history. In measuring whether Congress has altered the “traditional contours” of copyright such that First Amendment scrutiny must be applied, federal courts—including the Supreme Court in its 2011 Term case Golan v. Holder—must carefully examine the intertwined history of copyright and freedom of the press. The famous but misunderstood case of Donaldson v. Beckett in the British House of Lords in 1774 is an important piece of this history. In Donaldson, several lawyers, litigants, judges, and lords recognized the danger posed by copyright to untrammeled public communication. Eighteenth-century newspaper accounts shed new light on the free press implications of this important period in copyright law history.