Moderator: Zahr Said, Santa Clara Law

Mark Lemley (patent), Stanford Law School

After 40 years of radical change, things settled down for
normalcy in the last 10 years until Trump. 1980-2017: we grant 350,000 a year up
from 50,000; now mostly computer/bio instead of mechanical; most inventors were
single and now they’re teams; most inventors were from US and now they’re
mostly foreign. University patenting started in 1980; now significant. Now
first to file (not first to invent); now 20 years from filing (instead of 17
from grant). Patent thickets; patent continuation practice—multiplication from
a single application to multiple patents. Lawsuit numbers have tripled. Jury
trial was starting to become a thing in 1970s but a small percentage; now a
vast majority of trials are before juries. Product producers used to file
against competitors; now 50% of lawsuits are filed by NPEs. Patents were
invalidated in 70s at around 65%; now it’s 43-45%. 1982: patent appeals consolidated
in Fed Cir. Before 1980 there was no reexamination; then inter partes reexam
and post-grant review; IPR proceedings became the way most patent validity
disputes were resolved. Introduced district court forum shopping—ED Tex, WD
Tex, D Del were not where we litigated in 1980.

Hatch-Waxman/pharma litigation against generics didn’t exist
until 1984, so pharma patent litigation grows from there. Patent claim Markman hearings
were created in 1990s, cemented in 1996; before then, we didn’t know the answer
to “who decides what a patent means, a judge or a jury?”

Then there are substantive changes: patentable subject
matter broadened to almost everything, then narrowed again. Major changes in
prior art; major changes in interferences; obviousness law changed in
fundamental ways, narrowing then broadening. Utility doctrine weakened, written
description doctrine and full scope enablement became things. All real disputes
about infringement are resolved in Markman hearings; changed law of inducement;
new concept of joint or divided infringement; we strike down large swathes of
rules on inequitable conduct. Ebay changes the rules for injunctive relief: no
longer injunctions as a matter of course. We introduce apportionment of damages
(renewed from 19^th century); we change rules on willfullness/advice
of counsel and venue.

If you’ve been litigating for 40 years, everything in the
system has changed/been in flux, until about 2017. Not much happened since
then! A period of normalcy. 62 SCt patent cases 1982-2018, and none in last 3
terms. Recent SCt decisions have had “instinct for the capillary”—clarification
of assignor estoppel, not the central issue in patent law. 3 cases on 271(f)
about exporting components from the US that are combined outside the US: the
only 3 cases on 271(f) of which he is aware. Whether the post office is a “person”
under the Patent Act. Not earthshaking! Contrast to KSR, eBay, and patentable
subject matter cases before. Substantive cases began to affirm existing law rather
than change it. Fed Cir has also settled down: en bancs used to be 2x/any other
circuit, but only 2 in last 7 years (1 design patent, another a damages case
that was a dud). Fed Cir Dissent rate dropped from 2d highest to one of lowest;
many cases now not precedential.

IPRs turned out to have the same invalidity rate as courts
at 1/10 the cost. Even patentable subject matter is pretty predictable. There
are still cases but they don’t make fundamental changes.

This is generally a good story.

Then Trump. All is in flux. New PTO director dismantling
large swaths of PTO, making IPRs essentially impossible to get; increased
quotas; refused to hire new career examiners, offers no promotion path; on
track to replace examination with AI; Lemley is skeptical. Part of a broader chaos
targeting scientific research; 100% tariff on patented pharmaceuticals to
somehow magically reduce drug price; taxing university patents; proposing tax
on patents’ assessed value at time of filing. Not clear whether normalcy
survives.

Mark McKenna (trademark), UCLA School of Law

Conceptual changes that transformed what TM is mostly for
the worst. (1) unbounded expansion of the concept of source in TM. Source used
to mean actual historical source: who made the thing you were buying.
Infringement was very tightly limited to where consumers would believe D’s
products came from P. That was passing off. Only someone tricking consumers
into buying directly competing goods—very tightly connected to TM’s theory of harm:
illegitimate diversion of trade. Courts, primary drivers here, came to regard
that definition as overly limited; commerce was changing and courts wanted to
capture newer commercial practices, specifically outsourcing of production and
expansion of product lines to adjacent areas by companies—wanted to let Coca
Cola to license production to independent bottlers and still maintaining rights.
Redefined source as “control over quality” instead of actual historical source.
Also started to recognize confusion about use of same mark on products that
didn’t compete directly, like pancake mix and syrup. Unmoored TM from
traditional focus on direct competition and we never replaced it with a real
limit. “Sponsorship or affiliation” confusion is the worst; so open-ended that
virtually any conceivable connection can be conceived in those terms even
though it has different effects on consumers/competition more broadly. Net effect:
confusion is performance art—parties need to use that word, but that’s not what
the cases are really about, which is rights in gross.

(2) Connected and mutually reinforcing: structural collapse
of what used to be a separate but related body of unfair competition law into
TM, and resulting expansion of TM subject matter. Once upon a time, only
certain things could be TMs, words or devices that didn’t give info about
nature of goods/geographic origin: arbitrary/fanciful words/devices that were
separate from but attached to the goods. Personal names, descriptive terms, product
packaging/product design wouldn’t count; service marks weren’t affixed to anything
for sale. Only technical TMs could be infringed; unfair competition law was not
about what somebody owned, b/c by definition they didn’t own anything. P had to
show that D was passing off even w/o a TM, so there were additional proof
requirements and generally much more limited remedies. Would not bar use of
descriptive word, etc.

That system collapsed, mostly b/c of Erie. Unfair
competition became understood as state law, not common law, and federal courts
started to believe they couldn’t have common law, making lawyers worry about 50
different kinds of unfair competition law. That lack of uniformity wasn’t
really happening but courts and lawyers worried that it might. Solved by
recharacterizing things that used to be excluded from TM and calling them “unregistered
TMs.” Those things were previously unregistrable, not just unregistered.
Courts started interpreting 43(a) to give a cause of action for infringement of
unregistered TMs. Not what Congress anticipated. Huge change. We lost the
orientation of unfair competition as a residual doctrine w/more limited
remedies and got a huge amount of subject matter where we didn’t have rules about
what could be owned. Had to build that law about what could be owned from
scratch and haven’t been particularly successful.

These two things amplify each other: TM is redefined as
anything that can indicate source as we’ve expanded source beyond recognition.
Incremental; radicalism not notice. Courts act like the assumptions they used
to hold under the old system still apply, even though the changes are too great
to make that true.

Trevor Reed (copyright), UC Irvine School of Law

Indigenous creative rights: © is silent on status of citizens
of over 500 tribes, despite importance of Indian culture to 1970s American
culture. Many pieces of indigenous self-determination legislation in the 70s.

Mismatch b/t © and tribal sovereignty: tribes often regulate
traditional knowledge; © might call it public domain or give it only thin
protection. Eurocentric assumptions: limited times, transfers to certain people
only, money is a sufficient remedy, it doesn’t matter where the creativity
occurs; divides intangible from tangible. Ignores tribal sovereignty; 301
preemption can conflict. Tribes should, among other things, be able to take
over registration and deposit. His objections: Should be no public domain for
tribal creativity w/o tribal authorization; federal remedies for violation of
tribal rights; tribal courts should be recognized as venues for © claims and tribes’
regulatory authority should be formally recognized.

Pamela Samuelson (copyright), UC Berkeley Law

Statutory damages are the worst! Evolution: until 1909 Act,
there was a per sheet penalty dating back to the Statute of Anne, and statutory
damages were an improvement (anybody could ask for the PSP and half of the
money went to the US gov’t; not used often). Particularly useful when
difficult/expensive to prove damages; courts had discretion to grant statutory
damages but generally wouldn’t if damages or profits were measurable. Nonpunitive
way to get some compensation and deterrence.

1976: good parts: tripartite structure of $750-30,000 as
court considers just; up to $150K for willfulness; discretion to reduce awards
if innocent infringers or nonprofit educ/library users who thought uses were
fair. Compensatory at low end; deterrent in middle; punitive at high end.

Understandable but contribute to problems: Ps can ask for SD
at any time before final judgment; they’re mandatory.

In practice: Congress failed to consider how they should be
assessed in secondary liability or multiple work cases—in Cox, jury awarded
nearly 100K per work, $1 billion. Authors Guild v. Google, estimated risk was above
$350 billion. Arbitrary, inconsistent, and grossly excessive awards.

Suggested guidelines: award minimum where there’s no actual
damages or profits or P is unwilling to provide evidence; approximate actual
damages when fair use/lack of infringement is plausible, 2-3x actual/profits
when reckless or intentional; up to 10x if highly willful. Or consider what
will deter this D. Cox v. Sony: main issue is standard for contributory
infringement, but second issue was the standard for willful infringement, but
oral argument ignored it. SG and Cox said focus should be whether Cox knew its
own conduct was unlawful; reasonable for Cox to think it was OK to continue
to provide service to accounts whose users infringed, especially to hospitals
and barracks and the like.

Now getting worse: 1202 statutory damages. Very similar but
minimum is $2500 w/maximum 25K. Measured per violation (not defined) not per
infringed work. No “as the court considers just” limit. No need to have
registered © for eligibility. Way more likely to result in excessive damages.

Said: heard a lot about Erie, more than any other IP
conference: what gives?

McKenna: Congress has left the field and SCOTUS justices are
no longer picked for being lawyers but for specific hot-button issues. That
leaves everything to lower courts.

Lemley: we’ve also decided to abandon the common law and
equity for the dictionary definition of whatever terms the judge decides to
look up, which is a particular disaster for an IP regime that assumed a
common-law development. Many key concepts (infringement standard) aren’t even
in the statute. So we’ve abandoned the tools we’ve used for centuries. Leaving
us with the executive branch, and leaving aside Trump chaos, one of the
challenges is that you won’t get long term consistent development. We’re
looking at traditional sources of federal law and finding them wanting.

Samuelson: tech is also a big driver in ©. Generative AI,
billions of dollars at stake. Every other tech has pissed off a specific
sector: recording industry, movies, etc. Now everyone is mad. Dismantling of
federal science community is also hurting. Copyright is the only law on the
books is the only thing that seems like it could destroy AI; that’s not going
to happen but Ps can ask for impoundment/destruction, or they could end up
having control over the models.

Reed: people are losing faith in economic rationales of IP;
social justice is becoming a bigger rationale and people want to see more of
that, but we keep spinning out more economic arguments. Compare backlash to
racist mascots—pressure on corporations to change their TMs.

Farley: what went wrong in Dastar? Unbounded definition
needed constraint.

McKenna: Dastar’s biggest fan! But courts haven’t applied it.
The case is hard: you have to dig in to get what the court is saying. Whatever
else you thought of Scalia, he was smart and engaged with the arguments, and
that level of engagement is less common. Also, lower courts don’t like the outcomes
it produces and so ignore it. That means TM is used as a back door for
copyright, especially for works in public domain.

from Blogger http://tushnet.blogspot.com/2026/01/santa-clara-ip-conference-how-its-going.html