New patent legislation was voted through the House of Representatives last December and is now being considered by the Senate. The last time the patent process was updated was 2011, but that legislation, known as the “America Invents Act,” for the most part fell flat. The biggest change that occurred in 2011 was switching from a first-to-invent system to a first-to-file system.
The new legislation, known as the “Innovation Act,” is meant to end the issue of “Patent Trolls.” Patent Trolls are “companies that buy cheap patents and use them for profit by threatening infringement suits against others in hopes of settling.” The Innovation act includes several changes to the litigation process that will make it harder for patent trolls to file suits indiscriminately.
1) “Require specificity in patent lawsuits” – as the law stands now patent holders are not required to state specifically what is in violation when they file suit, the innovation act would require patent holders to state this.
2) “Make patent ownership more transparent” – Shell companies are a popular means for patent holders to disguise who is actually filing suit. The Innovation Act would require anyone who stands to make a financial gain to be listed by patent holders.
3) “Make losers pay” – The new bill would require losing plaintiff’s to pay winning defendants legal fees. This would remove the fear of legal fees that causes many defendants to settle even in the case when they are right.
4) “Delay discovery to keep costs down” – the new bill delays the point in the trial when defendants would be required to release sensitive internal documents to be used in the trial.
5) “Protect end users” – a popular tactic of patent trolls is to sue end users of product that are in violation of patents. The Innovation act would allow the producers of these products to step in and take part in the lawsuits on their customers behalf
The are many legitimate companies whose business models rely on patents that have spoken out against the new bill, notably Apple, Du Pont, Ford, GE, IBM, Microsoft and Pfizer. The most surprising critics of the bill are several University groups. Universities hold lots of patents from all of the research that they do, and in some instances the tactics that they use to enforce their patents resemble those of patent trolls.
I think that this new legislation looks very promising. Holding patent holders accountable for the litigation that they create should seems like a good idea to reduce frivolous lawsuits. From a utilitarian point of view, this bill would increase the happiness for the consumers and producers that frivolous lawsuits are filed against; the bill would reduce happiness for the relatively small number of “patent trolls” who benefit from these lawsuits.
In 1997 an English alternative rock band named “The Verve” released a song named Bittersweet Symphony. The song would eventually reach number 12 on the Billboard 100 list in 1998. The song featured a sample from “The Andrew Oldman Orchestra” of The Last Time by “The Rolling Stones.” This 4-bar sample was used with the permission of both Andrew Loog Oldman and Allen Klein. Andrew Loog Oldman was the original manager of “The Rolling Stones” and the copyright holder of the orchestral version of the song. Allen Klein was also manager of “The Rolling Stones” for a period of time and his label, ABKCO Records, is copyright holder for the studio recording of The Last Time.
After the song was released, “The Verve” was sued for sampling too much of The Last Time by both Oldham and Klein. In the end “The Verve” lost composer credits for the song, copyrights and royalties. When Bittersweet symphony was nominated for a Grammy, the credits were given to Keith Richards and Mick Jagger. The song was featured in a Nike ad, which had been refused when “The Verve” held rights to the song.
This scenario indicates to me that there is something wrong with the way copyrights work in America today. Without a doubt content creators deserve to be compensated for their work, but when they are given too much power, for too much time, copyrights stifle future creativity. In this case, two men who had no part in the production of the original work were able to file suit and take right for a derivative work.
Aereo is a New York based company that provides an online service streaming over-the air broadcasts on live and time-shifted streams. Retransmitting over-the-air broadcasts usually requires licensing fees to be paid to the original broadcasting agency. Aereo is attempting to create a legal loophole by requiring each subscriber to rent a unique antenna and unique DVR storage space, users are also required to be within the range of the broadcast that they are streaming or the service will be cut until the user reenters broadcast range . Regardless, a coalition of broadcasters including CBS, Comcast, Disney, 21st Century Fox, and others filed suit against Aereo. The legal ramifications of this are pretty far reaching. On one hand, there is legislation that requires Cable and satellite providers to pay licensing fees in order to retransmit over-the-air broadcasts. On the other there is a legal precedent, from the same district court that would have jurisdiction over Aereo, which says if a unique recording is used for a private performance the location of the recording device does not change its legality. In July 2012 a federal judge sided with Aereo and the decision was upheld at an appeals court in April 2013. The coalition of broadcasters filed a petition with the Supreme Court in October 2013 and as of January 2014 the Supreme Court has agreed to hear the case. This case exemplifies several of the issues were have discussed regarding copyright. It is very hard to argue that retransmitting or DVR services steal from the original broadcaster; by opening the broadcasts to a wider user-base, advertisements would reach more people and recover allow the original distributer to recover any lost profits by charging more for advertisements. If Aereo is able to survive this lawsuit, it could be step in the right direction for broadcast media.