Patents were developed to encourage openness in the innovation space and to protect inventors. Unfortunately, startups frequently face abusive patent litigation by “patent trolls” — companies that take advantage of a broken software patent system and operate by collecting fees on software patent licenses, instead of making products and contributing to technological innovation. Meanwhile, new distribution technologies are making it easier for anyone to reach a broad audience, which is why we need balanced copyright laws that allow these new technologies and their creators to succeed.
A recent Federal Circuit decision addressing the constitutionality of inter partes review (IPR)—a Patent Office review of a patent that has already been issued—is a positive development for promoting patent quality and leveling the playing field for startups involved in patent litigation. In Celgene Corp. v. Peter, the court held that IPR proceedings which result in the cancellation of issued patent claims are not an unconstitutional taking of private property. While it seems likely the Supreme Court will eventually weigh in on the question, for now IPRs remain available to startups who want to ask the U.S. Patent and Trademark Office (USPTO) to take a second look at weak patents that arguably should have never issued.
Startups facing patent litigation should be aware of recent, positive developments in patent venue law. This area of law dictates where a patentee-plaintiff can file an infringement lawsuit, and requires that a startup (or any company) can only be sued in a location (judicial district) where it has sufficient presence. Importantly, recent legal developments restrict parties—including patent assertion entities (PAEs), sometimes referred to as “patent trolls”—from suing startups in far-flung, plaintiff-friendly judicial districts. This levels the playing field in abusive patent litigation and benefits startups, who should no longer be required to defend litigation far from “home.”
The Senate Judiciary Committee is taking up a bill today that would change copyright enforcement in the U.S. and open up startups and their users to new risks. The bill, the CASE Act (S.1273), would create a process for copyright holders to address online copyright infringement by establishing a Copyright Claims Board within the U.S. Copyright Office to adjudicate copyright infringement and award substantial financial damages without the traditional safeguards of federal court.
The Subcommittee on Intellectual Property of the Senate Judiciary Committee recently held a series of hearings on the topic of patent subject matter eligibility. That Subcommittee is considering potential amendments to 35 U.S.C. §101—the provision of the Patent Act that defines what subject matter is (and is not) eligible for patent protection. In our view changes to 35 U.S.C. §101 are not needed, and we submitted comments to the Subcommittee articulating our concerns.
“Although the CASE Act is designed to provide small copyright holders with a process for addressing online copyright infringement, we are concerned the legislation will instead create potential traps for small startups and further incentivize bad faith copyright infringement claims.”
Earlier this week, Engine representatives participated in the U.S. Copyright Office’s Roundtable discussion on the impact and effectiveness of section 512 of the Digital Millennium Copyright Act (DMCA). The DMCA—and the safe harbor provisions of the bill included in section 512— provide a framework to grant online service providers limited liability protections for copyright infringement stemming from user-generated content.
Engine Executive Director Evan Engstrom responds to the European Parliament’s vote to adopt the Directive on Copyright in the Digital Single Market.
This primer provides an overview of copyright issues and what they mean for startups.
A primer that provides an overview of patent issues and what they mean for startups.