ENTREPRENEURSHIP & LAW eJOURNAL
Sponsored by the Kauffman Foundation
"The Trespass Fallacy in the 'Software Patent' Debate"
65 Fla. L. Rev. Forum 46 (2014)
RYAN T. HOLTE, Southern Illinois University School of Law
In The Trespass Fallacy in Patent Law, Professor Adam Mossoff details how patent law jurisprudence and scholarship is dominated by an indeterminacy critique or â€śtrespass fallacyâ€? in two respects. Professor Mossoffâ€™s essay, however, only briefly mentions the now paramount contemporary issue surrounding the more-focused â€śsoftware patentâ€? debate. In this short essay, I briefly discuss Professor Mossoffâ€™s trespass fallacy analysis as it relates to â€śsoftware patentsâ€? and the Supreme Courtâ€™s October 2013 Term case Alice Corp. Pty. Ltd. v. CLS Bank Intâ€™l.
"Actavis and Error Costs"
AARON S. EDLIN, University of California at Berkeley, National Bureau of Economic Research (NBER)
C. SCOTT HEMPHILL, Columbia University - Law School
HERBERT J. HOVENKAMP, University of Iowa - College of Law
CARL SHAPIRO, University of California, Berkeley - Haas School of Business
The Supreme Courtâ€™s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Courtâ€™s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.
As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to confirm the wisdom of the Actavis inference, in which the observation of a large reverse payment serves as a â€śsurrogateâ€? for patent-case weakness and therefore for lost competition.
"If You Can't Beat 'Em, Join 'Em? How Sitting by Designation Affects Judicial Behavior"
Stanford Public Law Working Paper No. 2449349
MARK A. LEMLEY, Stanford Law School
SHAWN P. MILLER, Stanford Law School
Judges, lawyers, and scholars have long decried the high reversal rate district judges face in patent cases. Many have suggested greater district court specialization as a solution, and Congress in 2011 enacted legislation to promote such specialization. In this paper, we investigate the impact of a novel measure of experience â€“ whether a district court judge has sat by designation on a Federal Circuit panel in a patent claim construction appeal â€“ on the likelihood a district judgeâ€™s subsequent claim constructions are reversed. Before sitting by designation, judges who later do so actually have a slightly higher claim construction reversal rate than judges who never do so. After sitting by designation, the reversal rate of district court judges on subsequent claim construction appeals decreases by 50 percent. This decrease is not fully explained by other measures of experience, including the number of prior patent cases or years on the bench. Nor is it fully explained by the timing of the appeal, the particular district court judge or various other characteristics of the patents, the parties and the litigation. Our results suggest a simple way to reduce the reversal rate in patent and perhaps other sorts of cases. However, our evidence suggests this increased agreement is due to increased Federal Circuit trust in the decisions of individual judges who have sat by designation and not increased district judge understanding of claim construction.
"The Coordination of Independently-Owned Vacuum Tube Patents in the Early Radio Alleged Patent 'Thicket'"
JOHN HOWELLS, University of Aarhus
RON D. KATZNELSON, Bi-Level Technologies
It has been proposed that difficulties in negotiating cross-licenses under multiple, independently-owned and "overlapping" patents may lead entrepreneurs to hold-up or deter development of technology covered by such patents. The literature alleges these features were present in radio development during 1905-1920, with numerous allegations of an impasse in bargaining the necessary patent rights until these were ultimately incorporated in the RCA patent pool. This paper seeks to determine with new precision how entrepreneurs and managers actually managed patent rights in this scenario. Accordingly, we re-examine the legal trajectories and entrepreneurial exploitation of patents on early vacuum tube technology where Fleming's diode patent was alleged to have "overlapped" with De Forest's triode patents. We show, by means of the relevant historical record, patent claims, litigation records and other relevant law, how patent rights were resolved by the courts and by the immunity of suppliers to the government from patent infringement liability. We trace the cross-licensing agreements between the different radio interests and find that licensing was always chosen over hold-up and so enabled robust, state-of-the-art radio development.
"History of the Patent Policy of the American National Standards Institute"
GEORGE WILLINGMYRE, GTW Associates
The American National Standards Institute (ANSI) patent policy applies to standards developing organizations (SDOs) accredited by ANSI (known as Accredited Standards Developers (ASDs)) to issue American National Standards (ANS). In order to obtain or maintain status as an ASD, an SDO must include the text of the policy as appropriate, in its accredited procedures along with any additional information as required; or submit to ANSI a written statement of full compliance with the policy in addition to statements that satisfy the policy requirements.
The ANSI patent policy has a long history, and has been evolving since 1932 to address the intellectual property and standards issues of the day. ANSIâ€™s experience illuminates what has worked and what has not. Understanding how the policy has changed over time provides practical lessons for SDOs and the voluntary standards community. This includes not only the SDOs accredited by ANSI and whose procedures and operations must comply with ANSIâ€™s essential requirements, but also others who will benefit from ANSIâ€™s experience.
In the opinion of the author the evolution of the ANSI patent policy highlights instructive experience:
1) An SDO needs to protect itself from involvement in litigation about the accuracy and completeness of statements and about infringements of patents due to use of the standard.
2) Between 1969 and 1995 ANSI patent policy included patent holder submission of specific terms and conditions and active evaluation by counsel or committee of such and recording a statement of the basis for considering submitted terms and conditions free of any unfair discrimination;
3) ANSIâ€™s policy does not currently require disclosure but describes what is to happen if disclosure happens; however the accompanying Guidelines to implementation of the policy acknowledge the value of early disclosure and suggest procedures SDOs may implement to encourage disclosure;
4) The essence of the ANSI patent policy is a requirement that when an SDO receives a notice that a proposed or an approved standard may require the use of a patent claim (i.e. an SEP), the SDO must obtain an assurance that: â€śA license will be made available to applicants under reasonable terms and conditions that are demonstrably free of any unfair discrimination.â€?
5) The consequence of not fulfilling the requirements of the ANSI policy is that the standard cannot be an ANS. SDOs should consider the â€śconsequencesâ€? for not meeting the ANSI policy.
The ANSI patent policy is a living document. Currently in mid 2014, The ANSI Intellectual Property rights policy committee is contemplating revisions to the policy to address the standards and patent issues of the day. The ANSI patent policy is a valuable resource containing the best thinking of leaders within the US voluntary standards community how standards developing processes ought to address the SEP issues of the day.
About this eJournal
Sponsored by the Kauffman Foundation
This eJournal distributes working paper and accepted paper abstracts in subject matters that concern how the law, broadly conceived, impacts entrepreneurship, small business, growth companies, entrepreneurship within large companies, and innovation policy generally.
The eJournal welcomes research not only on topics of regulation and public policy, but also the law of contracts, contract design, and informal relationships and networks that affect entrepreneurs and may substitute for legal contracts. Topic areas include contract design, judicial interpretation and enforcement of contracts, corporate law, partnership law and choice of entity, family businesses, franchising and joint ventures, intellectual property and licensing, small business regulation, securities law, bankruptcy, and social responsibility and sustainability. The Journal welcomes submissions from scholars in finance, economics, sociology, and other disciplines as well as legal scholars.
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