Friday, 15 November 2019
The United States Supreme Court has just granted review of the Google v. Oracle Copyright law suit. This is a huge case concerning copyrightability and the scope of fair use of software. Additional information, including briefs, can be found at the SCOTUS blog, here. Hat tip to Dmitry Karshtedt.
Saturday, 9 November 2019
US State of Wyoming enacted a law concerning the creation of special purpose depository institutions which concern digital assets. The legislature’s findings in the new law state:
(a) The legislature finds the following:
(i) The rapid innovation of blockchain technology, including the growing use of virtual currency and other digital assets, has resulted in many blockchain innovators being unable to access secure and reliable banking services, hampering development of blockchain services and products in the marketplace;
(ii) Federally insured financial institutions are not generally permitted to manage accounts in virtual currency or hold other digital assets;
(iii) Blockchain innovators have greater compliance challenges with federal customer identification, anti-money laundering and beneficial ownership because of the complex nature of these obligations and the unfamiliarity of regulators with blockchain innovators' businesses;
(iv) These intricate obligations have resulted in many financial institutions in Wyoming and across the United States refusing to provide banking services to blockchain innovators and also refusing to accept deposits in United States currency obtained from the sale of virtual currency or other digital assets;
(v) Compliance with applicable federal and state laws is critical to ensuring the future growth and reputation of the blockchain and technology industries as a whole;
(vi) Most financial institutions today do not have the requisite expertise or familiarity with the challenges facing blockchain innovators which is required to provide secure and reliable banking services to these innovators;
(vii) A new type of Wyoming financial institution that has expertise with customer identification, anti-money laundering and beneficial ownership requirements could seamlessly integrate these requirements into its operating model; and
(viii) Authorizing special purpose depository institutions to be chartered in Wyoming will provide a necessary and valuable service to blockchain innovators, emphasize Wyoming's partnership with the technology and financial industry and safely grow this state's developing financial sector.
The full bill is available, here. More information concerning the law is available, here.
Friday, 1 November 2019
OxFirst’s 4th Symposium on IP and Competition suggests views on FRAND licensing are far from converging
On October 18, IP economic consultancy OxFirst held its 4th Symposium on Globalization and fair, reasonable and non-discriminatory (FRAND) licensing of Standard Essential Patents (SEPs). Academics, judges and policy makers convened at St Cross College of Oxford University to debate FRAND licensing rates, terms and conditions. The symposium, which was chaired by Judge Fabian Hoffmann of the German Federal Court, offered arguments from both legal and economics perspectives.
First the economics: FRAND licensing disputes are on the rise. Compared to non-SEP disputes, patent families containing SEPs were 6.4 times more likely to be exposed to infringement actions than non-SEPs. At the same time, SEPs are also 9.5 times more exposed to validity challenges than non-SEPs.
Of particular interest is the strong involvement of non-practicing entities (NPEs) in FRAND disputes. The data presented showed that in the US, 77.5% of SEP infringement and validity actions involved NPEs. In Europe that same figure amounted to 43.9%.
As to the role of NPEs in the innovation eco-system, research sponsored by the French public authorities showed that NPEs do not necessarily foster the diffusion of innovation. Rather, they can have the opposite effect. Professors Valerio Sterzi of the University of Bordeaux and Gianluca Orsatti of the University of Turin used forward patent citations as a proxy for a technology’s use. They found that patents passed on to NPEs see systematic falls in forward citations. Their suggestion is that patents held by NPEs lead market participants to seek to stay away from such IP -- an insight that is intuitive, but now has the data to back it.
Legal scholarship presented at the conference discussed extraterritorial constraints. The pros and cons of anti-suit injunctions and global FRAND licensing rates were addressed. Particular attention was paid to issues such as forum shopping, controlling the costs of litigation, and the relationship of such acts to the sovereignty of other nations. The effects that setting a global FRAND licensing rate can have on licensing negotiations were addressed by Roya Ghafele. Ghafele presented arguments that underline the need to set a balance between the interests of the licensor and the licensee.
The symposium concluded with an outlook on possible solutions to the FRAND licensing challenge. That there is a need to come to grips with the licensing of SEPs was undisputed. After all, the Internet of Things thrives on interconnectivity; and standards will continue to play an instrumental role in establishing such interconnectivity. The experts invited were far from having a conclusive, let alone homogenous, view on the topic.
Should regional institutions be established to resolve the issues at stake? Should the global community at least strive to achieve a minimal understanding of what terms and conditions a FRAND licensing agreement should entail? Or should the issue be solved by simply enlightening the market on how to calculate FRAND royalty rates?
The conference concluded with an outlook on what is clearly the most pressing issue in this matter. Namely, how to manage an increasingly international economic order under the parameters set by a territorially limited patent system.
Further information can be found here: https://www.oxfirst.com/oxfirst-fourth-ip-competition-forum-globalisation-and-frand/