Supreme Court to Determine Whether the Government is a Person Under the America Invents Act

Written By Christina E. Brule

 

On October 26, 2018, the United States Supreme Court granted certiorari to determine whether the government is a “person” who may petition to institute review proceedings under the America Invents Act. Previously, the United States Court of Appeals for the Federal Circuit upheld a decision by the Patent Trial and Appeal Board that stated the Government was a “person” and had standing to file the petition.

Background

In 2011, Congress passed the Leahy-Smith America Invents Act (“AIA”), which created several quasi-adjudicatory proceedings, including the review of covered business method (“CBM”) patents, that the Patent Trial and Appeal Board (“PTAB”) oversees.

Return Mail, Inc. (“RMI”), founded in 2000, serves end-user companies and print mail service providers, which are companies likely to receive large quantities of return mail. RMI offers three products: RMI READ, a barcoding system that eliminates the handling of return mail; RMI On Site, a process that reduces the hours of labor required; and RMI reAddress, a search tool that updates your recipient address databases.

RMI patented RMI READ as a CBM patent: U.S. Patent No. 6,826,548 B2 (“the ’548 Patent”). Pursuant to § 18 of the AIA, a petition requesting CBM patent review of claims 39-44 of the ’548 Patent was filed by the United States Postal Service and United States of America (collectively “USPS”). RMI also brought suit against the United States for infringement of the ’548 Patent in the U.S. Court of Federal Claims.

The PTAB concluded that claims 39-44 of the ’548 Patent were unpatentable. Throughout the proceeding, RMI argued that USPS lacked standing to petition for CBM patent review. However, in its final written decision, the PTAB determined that USPS had standing under § 18 of the AIA. RMI appealed the final written decision of the PTAB.

Issue

On appeal, RMI put forth two alternative arguments: (1) USPS does not meet statutory standing requirements to petition for CBM review or (2) the ’548 Patent claims are not directed to ineligible subject matter and are patentable. The Supreme Court has granted certiorari to review the first argument.

RMI argued that because it brought suit under 28 U.S.C. § 1498, an eminent domain statute, the USPS is statutorily barred from petitioning for review of its CBM patent. The court disagreed, stating that “nothing in the text of § 18(a)(1)(B) indicates an intent to restrict ‘infringement’ to suits that fall under the Patent Act.”

Furthermore, RMI argued that the government has an implied license to practice patented inventions. Once again, the court disagreed. The court stated that “[w]hen the government has infringed, it is deemed to have ‘taken’ [a] patent license under an eminent domain theory.”

Thus, the court concluded that USPS had standing within the meaning of § 18(a)(1)(B).

Ruling

The United States Court of Appeals for the Federal Circuit affirmed the decision of the PTAB. The court held that USPS had standing to institute review of a CBM patent under the AIA.

In addressing the dissent’s position, that the government is not a “person” within the meaning of § 18(a)(1)(B), the court stated: “we believe the better reading of ‘person’ in § 18(a)(1)(B) does not exclude the government.”

Dissent

In the 2-1 decision of the court, Judge Newman dissented. The dissent argued that generally a “person” defined by statute does not include the United States and its agencies unless expressly stated in the statute.

Judge Newman offered multiple references in support of his interpretation: the language used in § 18(a)(1)(B) is “person;” The Dictionary Act, 1 U.S.C. § 1 excludes the government from the definition of the term “person”; and numerous cases to establish precedence that the “person” is “ordinarily construed to exclude the government.”

Looking Ahead

The USPS contends that the statutory context around the AIA indicates that the term “person” should be construed to include the government.

Return Mail notes that the question of whether the government constitutes a “person” under the AIA is important because federal agencies often respond to suits of infringement by filing petitions that invoke the jurisdiction of the PTAB.

This case continues the recent trend of the Supreme Court to take more patent-related cases.


Sources

28 U.S.C. § 1498(a).

AIA § 18, Pub. L. No. 112-29, 125 Stat. 284, 329-31 (2011) (CBM review).

Company Information, Return Mail, Inc. (last visited Nov. 10, 2018).

Gene Quinn, Federal Circuit says U.S. government is a ‘person’, can file CBM to challenge patents, IPWATCHDOG (Aug. 29, 2017).

Leesona Corp. v. United States, 599 F.2d 958 (Ct. Cl. 1979).

Patent Trial and Appeal Board, USPTO (last visited Nov. 10, 2018).

Return Mail, Inc. v. United States Postal Serv., 868 F.3d 1350 (Fed. Cir. 2017).

Steve Brachman, Supreme Court to Determine if Federal Government Is a ‘Person’ Eligible to Petition the PTAB, IPWATCHDOG (Oct. 31, 2018).

United States Postal Serv. v. Return Mail, No. CMB2014-00116, 2015 Pat. App. LEXIS 12853 (P.T.A.B. Oct. 15, 2015).

Photo courtesy of GoLegal.

The Music Modernization Act: A Monumental Transformation of Federal Copyright Protection in Digital Music

written by Emily M. Welch

 

With the monumental shift from physical to digital music consumption in recent years, an update on legislation addressing digital developments in music has become a necessity. On October 11, 2018, President Donald J. Trump signed into law the Music Modernization act, which is viewed as the most sweeping reform to copyright law in decades. The Music Modernization act, which was supported by a majority of songwriters, publishers, streaming services and politicians across the spectrum, revamps Section 115 of the U.S. Copyright Act in an attempt to bring copyright up to speed for the streaming era.

Background

Prior to the passage of the act, there were only two real options for starting a music service: clear every song manually before putting it online or set aside a fund and expect to get sued. Licensing was obtained under a “piecemeal” approach, which required music streaming services to obtain licensing for digital music on a per-work, per-song basis. However, even though licensing was a requirement, digital music providers only had to file bulk notices of intent with the Copyright Office for the rights-clearance process. The Copyright Office only required authorship to be identified “if known”. In a time where proper attribution was virtually impossible, many songwriters were not getting the royalty payments that they deserved. The process was time consuming and costly, and setting money aside in anticipation of litigation was seemingly the better approach.

When copyright protection was extended to song recordings, Congress chose not to include pre-1972 works in the coverage. Owners of pre-1972 musical recordings and users of those recordings were in constant dispute over whether copyrights existed in those works, and if so, what level of compensation was due.

Act’s Main Pieces of Legislation

The Music Modernization act brings two major changes to the preexisting copyright laws that fixes the issues above: it changes the procedure by which millions of songs are made available for streaming services and compensates artists for digitally downloaded pre-1972 master recordings. The act provides benefits for songwriters, by enhancing the royalty process, and also music streaming services, by providing confidence that, if they follow the process, they can accurately license all the musical works on their service without fear of billion dollar lawsuits against them.

In an effort to improve the licensing process, the Music Modernization act created a mechanical licensing agency that will be able to issue licenses to digital services and collect and distribute royalties to songwriters and publishers. The agency, called the Mechanical Licensing Collective (“MLC”), will be able to identify rights holders and create a public database of musical works and sound recordings so that songwriters and publishers can be matched to their songs and timely payments can be made. The MLC can also provide blanket licenses to digital music service providers, which would allow them to use any song and immunizes them from infringement lawsuits.

For the first time ever, the act provides that songwriters and artists will receive royalties on songs recorded before 1972. The protection for pre-1972 songs now has a term limit of 95 years from the date of publication, with an additional period tacked on the end based on a range that depends on how recently the song was published. The act also fully federalizes these song recordings, preempting state laws and incorporating all the normal limitations to copyright law, like fair use, that apply to any other copyrighted work.

Opposition to the Act

While the act gained unanimous support in Congress, it has not proceeded without opposition and criticism. Jim Meyer, Chief Executive Officer of SiriusXM, expressed his opposition due to concerns regarding the additional financial burden on digital music providers. The satellite radio provider would be forced to pay for pre-1972 songs, while its “terrestrial radio” rivals would not be held to the same requirements. Considering that SiriusXM and its AM/FM competitors are in the same market, Meyer argued that it is bad public policy to hold them to different licensing requirements.

Looking Forward

While the Copyright Office is currently working on a number of regulations and public outreach to solicit information to aid in the formation of the Mechanical Licensing Collective, the full effects of the law remain to be unseen. The future of digital music protection under the Music Modernization Act will be dictated by a formation of some of copyright’s most prominent experts and technological masterminds. Only time will tell the impact of copyright’s most recent revolution.


Sources

Amy Goldsmith, Musically Inclined: The Music Modernization Act of 2018, IPWatchdog (Oct 30, 2018).

Anthony S. Volpe & Savannah G. Merceus, The Tune Is Changing in the Digital Music Landscape, LegalTech News (Oct. 30, 2018).

Bill Donahue, Here Are The Final Tweaks To The Big Copyright Bill, Law360 (Sept. 28, 2018).

Bill Donahue, Trump Signs Music Modernization Act Into Law, Law360 (Oct 11, 2018).

Dani Deahl, The Music Modernization Act has been signed into law, The Verge (Oct 11, 2018).

Ed Christman, President Trump Signs Music Moderinzation Act Into Law With Kid Rock, Sam Moore As Witnesses, Billboard (Oct. 11 2018).

Jim Meyer, SiriusXM CEO Jim Meyer Explains the Trouble With The Music Modernization Act, Billboard, (Aug. 23, 2018).

Jordan Bromley, The Music Modernization Act: What Is It & Why Does It Matter?, Billboard (Feb. 23, 2018).

Nilay Patel, How the Music Modernization Act will help artists get paid more from streaming, The Verge (Oct 2, 2018).

How the Harvard University’s Admissions Trial Could Make Its Way to the Supreme Court

WRITTEN BY JACQUELINE D. GREENBERG

 

 

Background

In 2014, the Students for Fair Admission group filed a lawsuit against Harvard University that alleged Harvard’s admissions process was discriminatory. This lawsuit began a three-week trial in United States District Court before Judge Allison D. Burroughs on October 15, 2018. The Students for Fair Admissions group is a nonprofit led by Edward Blum, a legal strategist. The group began this action by representing a first-generation Asian-American who applied to Harvard for the Class of 2014, but was not admitted. The group alleges that the Harvard admissions committee practices racial discrimination against Asian-American applicants, and that Harvard’s overall admission process does not analyze applicants equally. Harvard has continuously denied these allegations and emphasizes that race is only one of many factors considered when examining an applicant’s file. The ruling of this case could generate implications for other colleges throughout the United States that consider race in the admissions process.

Students for Fair Admissions Argument

The lawsuit accuses Harvard of imposing tougher standards for Asian-American applicants by using a discriminatory “personal rating” category that includes recommendations by professors, personal essays, and interviews. The Students for Fair Admissions also argue that Harvard practices “racial balancing,” in their practice of accepting a certain mixture of races. The group’s allegations rely on a study performed by Peter Arcidiacono, a Duke University economist. The study indicated that even though Asian-Americans uphold strong academic records and higher SAT scores that surpassed white applicants, they are admitted at a lower rate when compared to wealthy and well-connected applicants, such as the children of the University’s alumni and donors, and recruited athletes. The Students for Fair Admissions note that these prioritized applicants are also likely to be found on the dean’s list before admittance. The group is ultimately fighting for a Harvard admissions process that does not consider a student’s race, as well as the opportunity for the court to take a closer look at overturning affirmative action in higher education.

Harvard University’s Argument

Harvard leaders argue that race is considered only narrowly, and that Harvard’s share of Asian-Americans has grown yearly, reaching 23 percent of the current freshman class. Harvard also argues that it would be unable to achieve a population of diverse students without considering race within its admissions process. Harvard upholds that the statistical analysis presented by the Students for Fair Admissions is “deeply flawed” and generates a “misleading narrative” about the Harvard admissions process. The numerical ratings that applicants receive in the admissions process are based on various factors, including academics, extracurricular activities, athletics, and personality. This is only one part of a long process of checks and balances to admit a diverse class. Harvard argues that it looks at applicants as a whole, rather than only based on one criteria, such as personality, and that such a complex set of criteria does not discriminate against any applicants. Recently, one of Harvard’s attorneys, William F. Lee, told reporters that the admission of some donor’s children, or donor’s relatives on the dean’s list does not have any effect on Asian Americans and how they are evaluated for admission. Ultimately, Harvard maintains that it would be unable to achieve the highest levels of academia and diversity among students without weighing students’ race because the campus would become less diverse, or less academically excellent.

Going Forward

The Students for Fair Admissions do not intend to call any of the plaintiffs to the stand to share their grievances because they argue that the students have a right to remain anonymous for fear of harassment. As the trial progresses, various witnesses are expected to testify such the University’s dean, Rakesh Khurana, and Gilpin Faust, who recently stepped down as President of Harvard University. In the final week of the trial, current and former Harvard students are also likely to testify in support of the college’s affirmative action program.

Conclusion

This case challenges whether colleges across the United States can consider the race of applicants. In the past, such considerations have been upheld. For example, in the case Fisher v. University of Texas, the United States Supreme Court upheld The University of Texas at Austin’s program that allowed the consideration of race as a factor in their admissions process. The Supreme Court followed precedent and held that the benefits of diversity were a compelling interest and justified the use of race as one of many factors considered when admitting students. However, the Supreme Court has also held that when it comes to race, “negative action,” such as racial quotas, is illegal. As the trial moves forward, it is likely that depending on Judge Burroughs’ ruling, the losing side could appeal, and this controversial case could make its way to the Supreme Court. If so, this trial brought against affirmative action in higher education will be only the beginning of a long and historical journey. Will the court follow precedent, or create a new standard?


Sources

Adam Harris, The Harvard Trial Doesn’t Matter, The Atlantic (Oct. 18, 2018).

Alia Wong & Isabel Fattal, The Complicated History of Affirmative Action: A Primer, The Atlantic (Aug. 2, 2017).

Collin Binkley, Harvard Emails Illuminate Power of Wealth in Admissions, Associated Press (Oct. 17, 2018).

Delano R. Franklin & Samuel W. Zwickel, In Admissions, Harvard Favors Those Who Fund It, Internal Emails Show, The Harvard Crimson (Oct. 17, 2018).

Nate Raymond, Harvard Admissions Bias Case Can Proceed to Trial: U.S. Judge, Reuters (Sept. 28, 2018, 3:44 PM).

Patricia Hurtado & Janelle Lawrence, The Harvard Trial: What We Learned This Week and What’s Ahead, Bloomberg (Oct. 20, 2018, 12:33PM).