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  • Webinar on IP Valuation Models

    Ingenious e-BrainIngenious e-Brain Solutions will hosting a webinar entitled "Benchmarking & Selecting Right IP Valuation Models to Value the Patent Portfolio" on June 3, 2021 beginning at 12:00 pm EDT.  This webinar will cover financial models for IP valuations and users.  The webinar will address the following topics:

    • What are we valuing?
    • The objective of IP valuation
    • Reasons for valuing IP
    • Who can all benefit?
    • IP valuation models
    • Benchmarking IP valuation models based on the reason of valuation

    Those interested in registering for the webinar can do so here.

  • Virtual Seminar on Ethics in the Practice of IP Law

    UIC LawThe Center for Intellectual Property, Information & Privacy Law at the University of Illinois Chicago School of Law will be holding its 12th Annual Ethics in the Practice of IP Law program from 11:45 am to 3:45 pm on June 4, 2021.  The conference will consist of the following sessions:

    • Conflicts & Representation for Patent Practitioners
    • IP & Ethics: Current Trends & Best Practices
    • A Conversation on Implicit Bias and IP as Social Change

    Additional information about the program, including an agenda and list of speakers, can be found here.  Those interested in registering for the conference online can do so here.  The registration fee is $65 (CLE admission).  Those not seeking CLE credit; UIC faculty, students, and staff; and fovernment employees can register for free.  The first ten Patent Docs readers to register for the program will be entitled to a 20% discount off of the registration fee using discount code patentdocs2021.

    Patent Docs is an Institutional Partner of the UIC School of Law IP Center.

  • Webinar on Patentable Subject Matter and Written Description Requirements in Australia

    Spruson & FergusonSpruson & Ferguson will be offering a webinar entitled "Patentable Subject Matter and Written Description Requirements" on June 7, 2021 at 4:00 pm (ET).  Simon Potter and Mike Zammit of Spruson & Ferguson will provide a summary of current Patent Office practice and case law with respect to Australia's written description requirement for patent specifications and approach to determining patentable subject matter, and give recommendations for drafting and prosecuting patent applications with these requirements in mind.  A case study reviewing current practice for antibody-related inventions will also be presented.

    While there is no cost to participate in the program, those interested in attending the webinar can register here.

  • ACI Summit on Biosimilars

    ACIAmerican Conference Institute (ACI) will be holding is 12th Annual Summit on Biosimilars & Innovator Biologics: Legal, Regulatory, and Commercial Strategies for the Innovator and Biosimilars Marketplace on June 22-22, 2021 as a virtual conference.  ACI faculty will offer presentations on the following topics:

    • Regulatory and Legislative Developments Impacting the Biopharmaceutical Industry
    • The Impact of Amgen v Sanofi on In-House Patenting Strategies
    • The "Skinny Label" Post-GSK v Teva regarding Biosimilar Carve-Outs
    • Litigation Strategies for Challenging Reference Drug Patents in IPRs
    • APJs speaking on Practice, Policy, and Procedure
    • A "Think Tank" on State and Federal Antitrust Initiatives involving Patent Settlements, Reverse Payments, and Emerging Litigation
    • The Future of Patent Thicket on the Balance of Innovation and Competition in the Biologic Ecosystem
    • Naming, Labeling, Interchangeability, and Promotion: Regulatory Considerations
    • The Economics of Biosimilars regarding Market Access, Sustainable Prices, and Reimbursement

    Keynote talks include the FDA's insights on implementing interchangeability for biosimilar products and FTC perspectives on antitrust considerations involving innovator biologic companies and biosimilar competitors.  There will also be an interactive ethics drill, a spotlight on Europe and China, and a panel on advocating for diversity in IP.  And time for interactive networking is included each day.

    An agenda for the conference can be found here.  A complete brochure for this conference, including an agenda, detailed descriptions of conference sessions, list of speakers, and registration form can be obtained here.

    The registration fee is $1,695 if paid by June 21, 2021.  Patent Docs readers are entitled to a 10% discount off of registration using discount code D10-658-658EX08.  Those interested in registering for the conference can do so here, by e-mailing CustomerService@AmericanConference.com, or by calling 1-888-224-2480.

    Patent Docs is a media partner of ACI's 12th Annual Summit on Biosimilars.

  • CVC Files Reply to Broad’s Opposition to CVC Motion for Misjoinder of Inventorship under 35 U.S.C. § 102(f)

    By Kevin E. Noonan —

    University of California-BerkleyLast December, Junior Party University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (hereinafter, "CVC") filed its Substantive Motion No. 3 under 37 C.F.R. § 41.121(a)(1) asking for judgment of unpatentability for all claims in interference under 35 U.S.C. § 102(f) or (if post-AIA) 35 U.S.C. § 115(a) for "failure to name all inventors of the alleged invention" against Senior Party The Broad Institute, Massachusetts Institute of Technology, and Harvard University (hereinafter, "Broad") in Interference No. 106,115.  In support of its motion, CVC argued that Broad deliberately misidentified the inventors on its involved patents and applications in the interference.  These allegations were based on differences between the named inventors in the patents- and applications-in-interference and the inventors named in a declaration by the Broad's patent attorney during a European opposition (EP 277146); it may be recalled that such irregularities involving a Rockefeller University inventor (Dr. Luciano Marraffini) not named in the EP application were the basis for that patent to be invalidated (see "The CRISPR Chronicles — Broad Institute Wins One and Loses One").  More recently, Broad filed is motion opposing CVC's allegations of misjoined inventorship (see "Broad Files Motion Opposing CVC Motion for Misjoinder of Inventorship under 35 U.S.C. § 102(f)").  Last week CVC filed its Reply.

    Reply briefs in motions before the PTAB are constrained by page length and a format wherein the movant must address all grounds of opposition raised against the motion, and CVC's Reply conforms to both constraints.  The brief sets forth, step by step, each allegation and ground of opposition raised by Broad in its opposition brief.

    Thus, CVC begins it responsive argument with Broad's attorney's (Thomas Kowalski) argument.  The brief notes that the evidence it has relied upon for misjoinder of invention is based on a declaration Mr. Kowalski submitted to the European Patent Office in an application related to patents-in-interference (specifically, those related to the EP equivalents of PCT/US2013/074611, PCT/US2013/074790, and PCT/US2013/074667).  CVC's motion relied upon an analysis of the claimed subject matter disclosed and claimed in certain of these EP applications, the corresponding patents-in-interference, and differences in inventorship between applications claiming the same or sufficiently closely related subject matter.  CVC broadly argues that Dr. Baily's analysis and conclusions were not challenged nor factually rebutted by any evidence presented in support of Broad's opposition.

    Broad's first challenge to CVC's arguments was brought against their expert witness Dr. Bailey for lack of proper credentials (he is not a lawyer) and for not making the comparison using, inter alia, claim charts.  CVC argues that their witness's credentials were not relevant because the analysis was of differences in the face of representations under oath by Mr. Kowalski who certainly had the proper credentials ("if [Mr.] Kowalski's analysis is correct, then those individuals who made the inventive contributions should have been (but were not) named as inventors of the involved patents and application").  Expert witness Bailey's testimony was based on an understanding of a person of ordinary skill in the art comparing the claims and disclosure of the EP applications that were the subject of Mr. Kowalski's declaration and certain patents-in-interference here, which to the extent the claimed subject matter was sufficiently the same yet inventorship differed supported CVC's misjoinder motion (the basis of this analysis was exemplified with regard to Cas9 "ortholog designs" in these applications and patents).  As stated by CVC in its brief, "Bailey considered, from the perspective of a person having ordinary skill, the relevant specification and claim language, before concluding that certain claims of Broad's PCT applications and its involved patents and application cover the same invention (italics in brief).  This is shown, for example, by comparison between "relevant claim limitations [in] the '691 PCT application and the '233 patent."

    While acknowledging that Dr. Bailey had not performed a conventional claim comparison (appropriately so, he not being a patent attorney), CVC argued that "CVC's motion identifies relevant terms (pertinent to Kowalski's assessments and recited in Broad's involved claims) and offers comparisons sufficient to support the requested relief, all supported by Bailey's declaration (italics in brief).  In a related criticism, CVC argued that Broad's insistence that Dr. Bailey's analysis was deficient (inter alia, for not performing a "claim-by-claim analysis") "ignores [the Broad's] own attorney's inventorship analysis" and that "[n]othing more is required to establish that Broad failed to name the correct inventors than its attorney's sworn testimony that these individuals made inventive contributions."  Similarly, CVC argued that criticism that its analysis had not considered the consistencies in the inventorship analyses between the EP applications and the patents-in-interference was inapposite because it was only the inconsistencies that are relevant to their misjoinder motion.  Nor, according to CVC, were the various priority relationships between these applications or patents relevant; what was relevant were the differences in inventorship in applications and patents having the same claimed subject matter.

    Finally on substantive issues, CVC countered Broad's argument that statements by its attorney cannot be used as admissions in this interference.  According to CVC, this is contrary to Fed. R. Evid. 801(d)(2), which apply in interferences under 37 C.F.R. § 42.62, as admissible admissions against interest.  CVC's brief cites a variety of legal precedent contrary to Broad's argument, including Williams v. Union Carbide Corp., 790 F.2d 552, 555-556 (6th Cir. 1986), and U.S. v. McKeon, 738 F.2d 26, 30 (2d Cir. 1984) (citing Oscanyan v. Arms Co., 103 U.S. 261, 263 (1880) (none of which apparently in either the patent context or involving proceedings before the U.S. PTO or PTAB).  More relevant are CVC's arguments that Broad relied upon Mr. Kowalski's declaration and should not now be allowed to disclaim it ("Broad cannot use the Kowalski Declaration to support its European opposition proceeding and in a later proceeding, like this interference, discount and abandon the same sworn testimony"), citing Pfizer Inc. v. Teva Pharm. USA, Inc., 2006 WL 3041102 at *4-5 (D.N.J. 2006) and perhaps most tellingly, Therasense, Inc. v. Becton Dicksinson & Co., 864 F.Supp.2d 856 (N.D. Cal. 2012).  CVC also supports its argument that Mr. Kowalski's declaration is admissible in this interference in support of CVC's motion for invalidity due to misjoinder because it is an admission against interest, citing Garrido v. Holt, 547 Fed. Appx. 974, n.3 (Fed. Cir. 2013), and Fed R Evid. 804(b)(3) and distinguishing precedent cited by Broad in its opposition.

    Procedurally, CVC argued that Broad's motion to change inventorship as a remedy to any infirmities in inventorship is not appropriate for the reasons set forth in its opposition to Broad's motion for this remedy (see "CVC Files Substantive Motion No. 3 (for Improper Inventorship) and Broad Opposes"), as well as being barred by laches and purported bad faith.  Finally, CVC reiterates in brief its argument that only the Director is empowered under the statute to file a Certificate of Correction in an inventorship dispute and there is no evidence that the Director has delegated this authority to the Board.

  • CVC Files Reply to Broad’s Opposition to CVC’s Priority Motion

    By Kevin E. Noonan —

    University of California-BerkleyLast week, Junior Party The University of California/Berkeley, the University of Vienna, and Emmanuelle Charpentier (collectively, "CVC") filed its reply to Senior Party The Broad Institute, Harvard University, and the Massachusetts Institute of Technology (collectively, "Broad") motion in opposition (see "Broad Files Motion in Opposition to CVC Priority Motion") to CVC's motion for priority in Interference No. 106,115.

    The Reply is (relatively) direct and to the point (motivated no doubt as much by the page limit in Reply briefs as to the rhetorical force of a short, pithy, to-the-point argument).  (Although to be fair the brief begins with a reminder that the CVC inventors "revolutionized the field of genome editing, giving the world a new system capable of cleaving and editing genes in eukaryotic cells," mixing the irrebuttable with the precise question the Board is asked with answering.)  The critical component of this achievement (no matter who did it) is the development of the combination of the tracr RNA and crRNA into a single guide RNA (sgRNA).  Asserting their multiple instances of earlier conception, CVC contends that these conceptions predated any conception by the Broad's inventors, accompanied by CVC's diligence in achieving reduction to practice.

    The brief also counters Broad's long-running narrative, extending from the earlier interference between these parties (No. 106,048), that those skilled in the art would not have thought performing CRISPR in eukaryotic cells would be a routine extension of CVC's undoubted successes in performing prokaryotic CRISPR.  The brief asserts "new" testimony from its own witnesses (Barrangou and Sontheimer) as well as testimony adduced from Broad's collaborator Dr. Marraffini to the contrary.  The brief attempts to turn the Broad's inventors' achievements against Broad, as being actual corroboration of their assertions, by referencing Dr. Marraffini's testimony suggesting derivation of the sgRNA concept from a scientific talk by one of the CVC inventors, and then contending that the straightforward reduction to practice of this concept by Broad's inventors is actually evidence that doing so was straightforward and routine.

    The brief sets out three reasons why CVC should prevail on the priority question:

    • First, CVC argues earlier conception, coupled with "reasonable diligence" in actual reduction to practice.  And this "definite and permanent idea never changed," according to CVC, evidenced by its use in all later actual reduction-to-practice events.

    • Second, CVC had conceived of a "preformed" CRISPR-Cas9 complex that they showed (on August 9, 2012) could achieve CRISPR-mediated genetic changes in eukaryotic cells by microinjection.  This method for achieving CRISPR in eukaryotic cells occasions none of the technical impediments Broad has asserted against eukaryotic CRISPR, and neither the Count nor the claims-in-interference are limited to specific methods of introducing CRISPR-Cas9 into eukaryotic cells.  In addition, CVC argues with regard to this reason that Broad has not provided any evidence that CVC's diligence was deficient (other than attacking the completeness of CVC's conception based on purported failure of actual reduction to practice attempts).

    • Third, CVC finally gives full-throated voice to their allegation that the Broad inventors derived eukaryotic CRISPR from CVC's scientists.  The allegation is based on the testimony CVC adduced from Dr. Marraffini in his deposition, to the effect that Dr. Marraffini disclosed to the Broad inventors CVC's sgRNA embodiment after learning of it from review of a confidential manuscript and attending a scientific presentation.  This evidence is supported, according to CVC, by evidence from a graduate student working under Dr. Zhang that Broad's experiments relating to eukaryotic CRISPR had "all failed" prior to Dr. Marraffini's disclosure.

    With regard to the first of these reasons, CVC reiterates the evidence it has proffered for conception as early as March 1, 2012.  (While a necessary part of their argument, the facts of CVC's conception(s) are not in dispute; rather, Broad has argued that the history of CVC's attempts to reduce the invention to practice, which is their view was protracted due to the non-routine nature of these experiments, should be held to mean that CVC's conception was not complete until actual reduction to practice, which occurred after Broad's June 26, 2012 conception date.)  CVC's brief in this regard focuses on elements of its conception with respect to various features of the CRISPR-Cas9 system (the presence of a nuclear localization sequence, NLS, for example), as well as the formation of a CRISPR-Cas9 RNP in vitro capable of being introduced into eukaryotic cells by microinjection.  Moreover, CVC argues that the embodiment it relies upon for priority is the same embodiment disclosed in Example 2 of its P3 application (USSN 61/757,640, filed January 28, 2013; see "PTAB Decides Parties' Motions in CRISPR Interference"), for which the Board had recognized its sufficiency as for at least constructive reduction to practice of eukaryotic CRISPR:

    Table 1
    And regarding Broad's assertions that their inventors had "adapted" CRISPR for eukaryotic applications, CVC argues this embodiment had overcome any such impediments:

    Table 2
    Because the Board rendered this decision with regard to their motion for priority benefit, CVC argues, constructive reduction to practice of this embodiment prior to Broad's earliest asserted conception date mandates the Board to grant its motion of priority of claims corresponding to the Count.

    CVC also addressed Broad's various arguments regarding purported deficiencies in its conception, again with reference to this specific embodiment of eukaryotic CRISPR (and characterizing Broad's argument as "fabricat[ing] an illusion of doubt in the inventors' minds by cataloging snippets from 12 various CVC documents").  According to CVC, all Broad's "evidence" of CVC's deficiencies "simply reflect that the inventors understood and considered these routine implementation issues during the process and, at all stages, had a plan to address them," supported by inventor testimony.

    With regard to CVC's second reason it is entitled to priority judgment, the brief argues complete conception consistent with the elements of Count 1:

    Table 3
    This evidence establishes that CVC's conception was "definite and permanent" according to the brief, again relying on assertions by the Board regarding Example 2 of CVC's P3 priority application.  The brief asserts for the significance of this embodiment as actual reduction to practice regarding Broad's arguments that CVC's conception was deficient:

    There is no need for codon optimization, RNA or protein expression, concomitant folding, and co-localization of RNA and protein, because the complex is already formed before injection.  The use of pre-formed complexes also minimizes RNA and protein degradation, because the complex is protected from cellular factors, as it is in bacterial host cells [Testimony of Dr. Moens, CVC expert witness, italics in brief].

    In addition, CVC's brief sets forth its evidence that "[m]ultiple lab groups used CVC's system with only ordinary skill and routine techniques," as well as testimony from several references regarding expectations of those skilled in the art, as further evidence of complete conception (as well as reiterating its argument that Broad's efficient reduction to practice is actually evidence supporting CVC's complete conception).  Specifically CVC argues:

    The PTAB may not ignore the copious objective evidence showing that CVC and the rest of the field understood the alleged "problem" and knew how to solve it.  . . .  That neither CVC nor others encountered "perplexing intricate difficulties arising every step of the way" or "unduly extensive research or experimentation" when applying CVC's sgRNA CRISPR-Cas9 system in eukaryotic cells confirms the completeness of CVC's 22 conception [citations omitted].

    And the existence of some failures in attempts to practice eukaryotic CRISPR is "irrelevant," according to CVC, because "[t]he law does not require a 100% success rate for attempts at reduction to practice" and "[i]n fact, the law of conception does not require any success rate for reductions to practice."

    CVC also argues that, with regard to its priority motion granted by the Board regarding it P3 priority application, Broad had not argued a lack of diligence in "August, October, and November 2012, and through CVC's constructive reduction to practice in January 2013," but rather had focused these arguments on March and April 2012.  These dates are "outside the critical period" (i.e., between Broad's conception after CVC's asserted March 1, 2012 date of conception, through CVC's actual or constructive reduction to practice) and thus are unchallenged by Broad according to the brief.

    CVC then turns to its legal argument that Broad was attempting to "rewrite conception law" to require a reasonable expectation of success; CVC argues it does not, citing Burroughs Wellcome Co. v. Barr 13 Labs., Inc., 40 F.3d 1223 (Fed. Cir. 1994), and Dana-Farber Cancer Inst., Inc. v. Ono Pharm. Co., 964 F.3d 16 1365, 1372 (Fed. Cir. 2020).  CVC also argues that Broad has mischaracterized Hitzeman v. Rutter, 243 F.3d 1345 (Fed. Cir. 2001), "as requiring both the inventors and a POSA to have a reasonable expectation of success for the inventors to have had a complete conception"; according to CVC, inventors are persons of extraordinary creativity and that the standard is whether here is complete conception in the mind of the inventor rather than a person having ordinary skill in the art.  In any event, CVC argues, its inventors having conceived of and actually reduced to practice the sgRNA CRISPR system "as a pre-formed RNP complex outside of a cell and had a way of delivering the complex into a eukaryotic cell via microinjection" settles the argument.  And if there is any dispute whether CVC's inventors expected CRISPR to be operable in eukaryotic cells, the brief cites contemporaneous statements from both Dr. Doudna and Dr. Charpentier asserting that they did.  The brief also counters Broad's arguments that persons of ordinary skill in the art doubted utility of CRISPR in eukaryotic cells by testimony from witnesses "Raible, Sontheimer, Barrangou, and Marraffini."  Finally, the brief asserts that the purported difficulties of eukaryotic CRISPR did not exist because those impediments would arise (if they did) for protein-mediated methods, whereas CRISPR was fundamentally an RNA-mediated protocol.

    Finally regarding CVC's second basis for the Board to render a decision in its favor on priority, the brief notes its several corroborated instances of actual reduction to practice:  in zebrafish on August 9, 2012 and mammalian cells in October and November 2012.

    As to the third reason for prevailing, derivation, CVC reiterates its evidence and argument that Broad's inventors derived eukaryotic CRISPR from CVC's inventors, specifically with regard to sgRNA embodiments.  The basis for this argument is the testimony by Dr. Marraffini in his deposition regarding his role as a confidential reviewer of a draft paper that eventually published as the Jinek reference; that Dr. Marraffini attended a scientific conference during which CVC's inventor disclosed this embodiment for use in eukaryotic CRISPR; that Dr. Marraffini appreciated its significance; and that he transmitted this information to the Broad inventors.  An important aspect of these allegations is that, according to CVC, Broad's inventor was unaware of the functional significance of the tracr RNA component of the CRISPR-Cas9 complex until Dr. Marraffini informed him of the sgRNA-containing embodiments.  This evidence compels the Board to grant judgment to CVC in this interference according to the brief.

    In conclusion, CVC asserts:

    The law rewards inventors, such has CVC, not those who merely derive and then reduce to practice using ordinary skill.  The CVC inventors, not Zhang, invented the subject matter of Count 1.  Whether applying priority of invention law or derivation law, the PTAB should recognize what the scientific community recognized in awarding the Nobel Prize to Charpentier and Doudna: it was their teamwork that made the tremendous scientific leap forward to allow the world to reap the benefits of a single-guide RNA CRISPR-Cas9 system for genome editing in eukaryotes.  The extensive corroborated evidence of record shows this to be the case, and the PTAB should award priority to CVC.

  • New Vision Gaming & Development, Inc. v. SG Gaming, Inc. (Fed. Cir. 2021)

    By Kevin E. Noonan —

    Federal Circuit SealIn one of the more daring (and somewhat risky) strategies by an appellant challenging an adverse decision in a covered-business method (CBM) review proceeding, New Vision Gaming asserted a purported conflict of interest by Administrative Patent Judges (APJs) in making institution decisions.  According to the Appellant's argument, the pay, bonus, and supervisory structure of the Patent Trial and Appeal Board raised at least the appearance that APJs could be improperly motivated in their own self-interest to institute CBMs and other post-grant review proceedings (see "Appellant Raises Due Process Issues in New Vision Gaming and Development v. SG Gaming").

    New Vision's arguments were unavailing, however, as the Federal Circuit avoided the issue entirely, ruling last week that the Board's decision be vacated and the case remanded for hearing before a constitutionally properly appointed panel.  The basis for this decision is that New Vision had not waived its challenge under Arthrex, Inc. v. Smith & Nephew, now under review by the Supreme Court.  The Federal Circuit's opinion was written by Judge Moore joined by Judge Taranto and in part by Judge Newman, who also dissented-in-part.  It is Judge Newman's dissent that is noteworthy, because Judge Newman believed that the question of whether a contract/license between the parties, designating the District of Nevada as the forum for any dispute, should have precluded the PTAB from asserting jurisdiction (and as a threshold issue might have precluded remand if the PTAB had improperly done so).  The PTAB, intervenor in this appeal, maintained that the jurisdiction issue was not provided for under the America Invents Act (§ 18) and that the Federal Circuit's jurisdiction is restricted under 35 U.S.C. § 324(e).  Petitioner before the PTAB, SG Gaming, argued that the jurisdictional issue was not appealable as an institution decision under Thryv, Inc. v. Click-To-Call Technologies, LP, 140 S. Ct. 1367 (2020).  Judge Newman countered with her own Supreme Court precedent, that "precedent requires respecting an agreed selection of forum," M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972).  The Judge also raised Federal Circuit precedent, that "§ 324(e) does not bar review of Board decisions 'separate . . . to the in[stitu]tion decision,'" citing Facebook, Inc. v. Windy City Innovations, LLC, 973 F.3d 1321, 1332 (Fed. Cir. 2020), and that while appeals cannot be taken from the Board's determination of whether a substantial new question of patentability has been raised, Belkin Int'l, Inc. v. Kappos, 696 F.3d 1379 (Fed. Cir. 2012), the Board's conduct of the review (which presumably includes whether there should have been any reviewing conduct at all) is reviewable, citing St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014).

    New Vision Gaming & Development, Inc. v. SG Gaming, Inc. (Fed. Cir. 2021)
    Panel: Circuit Judges Newman, Moore, and Taranto
    Opinion by Circuit Judge Moore; opinion concurring in part and dissenting in part by Circuit Judge Newman

  • U.S. Trade Representative Releases 2021 Special 301 Report

    By Kevin E. Noonan —

    Plus ça change, plus c'est la même chose – Jean-Baptiste Alphonse Karr, 1862

    U.S. Trade RepresentativeOr maybe not.  On April 30th, Ambassador Katherine Tai, U.S. Trade Representative (USTR), issued the 2021 Special 301 Report.  In a press release, the USTR stated that "[i]ntellectual property rights incentivize our creators, manufacturers, and innovators to invent new products and technologies."  The press release notes that the review period underlying the Report took place during the COVID-19 pandemic, "the largest global health crisis in more than a century."  Consistent with recent decisions (including support for the proposed WTO IP waiver; see "Biden Administration Supports Waiver of IP Protection for COVID-19 Vaccines"), Ambassador Tai's press release asserts that:

    The top priority of the United States is saving lives and ending the pandemic in the United States and around the world.  As affirmed in the Doha Declaration on the TRIPS Agreement and Public Health, the United States, while recognizing the role of intellectual property (IP) protection in the development of new medicines, respects a trading partner's right to protect public health and, in particular, to promote access to medicines for all.

    The press release also highlights recent successes (IP rights protections and amended laws in China) and setbacks (citing "the European Union's aggressive promotion of its exclusionary geographical indications policies"), as well as providing a preview of the results set forth in the Report.

    According to the Executive Summary of the Report, "[a] priority of this Administration is to craft trade policy in service of America's workers, including those in innovation-driven export industries."  In sharp contrast with Reports issued during the prior administration, here the Summary asserts exhortation that:

    The Report informs the public and our trading partners and seeks to be a positive catalyst for change.  In addition, given the importance of innovation and IP in developing the advances necessary for fighting the ongoing COVID-19 crisis, this Administration is committed to trade policies that seek to save lives in this pandemic and ensure preparedness for the next one.  USTR looks forward to working closely with the governments of the trading partners that are identified in this year's Report to address both emerging and continuing concerns, and to build on the positive results that many of these governments have achieved.

    The Report is promulgated pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994).  The Trade Representative is required under the Act to "identify those countries that deny adequate and effective protection for IPR or deny fair and equitable market access for persons that rely on intellectual property protection."  The Trade Representative has implemented these provisions by creating a "Priority Watch List" and "Watch List."  Placing a country on the Priority Watch List or Watch List is used to indicate that the country exhibits "particular problems . . . with respect to IPR protection, enforcement, or market access for persons relying on intellectual property."  These watch lists are reserved for countries having "the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products."

    The Report also notes the USTR's continued efforts to enhance public engagement.  These efforts were limited to written submissions due to the COVID pandemic and the responses posted online (www.regulations.gov, docket number USTR-2020-0041).  The Report notes that the USTR received submissions from 50 non-government stakeholders and 22 foreign governments.

    The USTR reviewed "more than 100" of this country's trading partners and identified nine countries on a "Priority Watch List" (decreased by one from last year) and another 23 countries on the "Watch List" (the same number as last year), all relating to deficiencies in intellectual property protection in these countries.  The Priority Watch List in the 2020 Report includes Argentina, Chile, China, India, Indonesia, Russia, Saudi Arabia, Ukraine, and Venezuela (Algeria being removed from the list this year).  Countries on this list "present the most significant concerns this year regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection."  On the Watch List this year are Algeria, Barbados, Bolivia, Brazil, Canada, Colombia, Dominican Republic, Ecuador, Egypt, Guatemala, Kuwait, Lebanon, Mexico, Pakistan, Paraguay, Peru, Romania, Thailand, Trinidad & Tobago, Turkey, Turkmenistan, Uzbekistan, and Vietnam (the United Arab Emirates being removed from the list this year and Algeria shifting from the Priority Watch List to the Watch List).

    The Report contains two Sections (on "Developments in Intellectual Property Rights Protection and Enforcement" and "Country Reports") and two Annexes on particular issues (the statutory bases of the Report, and government technical assistance and capacity building efforts).

    The Report cites (and emphasizes) significant progress in several U.S. trading partners, including:

    • The United Arab Emirates, which was removed from the Watch List as a consequence of "resolving concerns with IP protection of pharmaceutical products by issuing Decree 321 that, among other things, provides protection against unfair commercial use, as well as unauthorized disclosure, of test or other data generated to obtain marketing approval" as well as addressing "long-standing IP enforcement concerns" in Dubai involving the movement of counterfeit goods;

    • Algeria, which moved from the Priority Watch List to the Watch List as a result of "steps the government has taken to engage and cooperate with stakeholders, improve enforcement efforts, and reduce IP-related market access barriers";

    • Brazil, while still being placed on the Watch List showed improvement in IP protection for cooperating with the U.S. DOJ as well as Homeland Security and their UK counterparts in "seiz[ing] the domain names of multiple commercial websites engaged in the illegal reproduction and distribution of copyrighted works";

    • Taiwan, for amending its trade secret law that resulted in imposition of a $3.4 million fine and 5-6 year prison sentence for stealing trade secrets related to semiconductor technology;

    • Peru, for enforcing actions against entities involved in pirating music and film from local websites showing U.S. stakeholder-owned copyrighted works;

    • Ukraine, which "continued to take positive steps in 2020 toward a transparent, fair, and predictable system for the collective management of royalties."

    Also noted in this section of the Report were member states participating in the 1991 Act of the International Union for the Protection of New Varieties of Plants Convention, with Saint Vincent and the Grenadines acceding to the treaty in 2020, and the WIPO Internet Treaties (the World Intellectual Property Organization (WIPO) Performances and Phonograms Treaty and the WIPO Copyright Treaty), with Afghanistan, Comoros, San Marino, and Vanuatu acceding to these treaties in 2020.

    Another Section of the Report involves "illustrative best practices" by U.S. trading partners.  These include "cooperation and coordination among national government agencies involved in IP issues is an example of effective IP enforcement," citing Thailand, India, Saudi Arabia, Brail, and Indonesia for these efforts; "specialized IP enforcement units," including those in Brazil, Malaysia, and India; "IP awareness and educational campaigns" in Spain, India, Thailand, and Vietnam; and "active participation of government officials in technical assistance and capacity building" in Singapore, Romania, Taiwan, Algeria, India, and Cambodia.  Micro-, small- and medium-sized enterprises (MSMEs) were particularly noted as "contribut[ing] widely to innovation, trade, growth, investment, and competition" and thus the Report applauds efforts in Hing Kong, the UK, Canada, and Mexico to support these businesses.

    Cooperation rather than confrontation is a running theme in this report, where the USTR sets forth its plan for improving trade relations and protection of U.S. stakeholders IP, including efforts to:

    • Engage with U.S. stakeholders, the U.S. Congress, and other interested parties to ensure that the U.S. Government's position is informed by the full range of views on the pertinent issues;

    • Conduct extensive discussions with individual trading partners regarding their respective IP regimes;

    • Encourage trading partners to engage fully, and with the greatest degree of transparency, with the full range of stakeholders on IP matters;

    • Develop an action plan with benchmarks for each country that has been on the Priority Watch List for at least one year to encourage progress on high-priority IP concerns; and

    • Identify, where possible, appropriate ways in which the U.S. Government can be of assistance.

    And to reinforce the tone, the USTR states the US "will conduct these discussions in a manner that both advances the policy goals of the United States and respects the importance of meaningful policy dialogue with U.S. trading partners."

    Multilateral and bilateral initiatives are discussed.  Perhaps significantly the primary multilateral initiative called out in the Report is the WTO, with regard to which the Report states that "[i]n the past year, the United States co-sponsored discussions in the TRIPS Council on the positive and mutually reinforcing relationship between the protection of IP, innovation, and business development."  Bilateral agreements mentioned in the Report include various Trade and Investment Framework Agreements (TIFAs) between the U.S. and several ("more than 50") trading partners, discussing specifically such arrangements with Pakistan, Argentina, Nepal, Central Asia countries, and Fiji.  The United States-Mexico-Canada Agreement, updating and revising NAFTA, is one such trilateral agreement which the Report states "secur[ed] strong improvements in the protection and enforcement of IP."  The UK's exit from the European Union is recited as providing "new opportunities for the United States to expand and deepen our existing relationship with the UK," which include strengthening IP protection and continuing efforts begun in the last administration to "review . . . the status and objectives of the United States-UK Free Trade Agreement (FTA) to inform our next steps with the UK."  Agreements with the EU was also not neglected, as were negotiations started in July 2020 to negotiate a trade agreement with Kenya.

    Turning to specific issues of concern, trademark counterfeiting is said to harm "consumers, legitimate producers and governments."  The problem is one with global scale, "and involved the production, transshipment, and sale of a vast array of fake goods . . . including semiconductors and other electronics, chemicals, medicines, automotive and aircraft parts, food and beverages, household consumer products, personal care products, apparel and footwear, toys, and sporting goods."  Many of these goods rise in China, whereas India is called out as a source of counterfeit medicines and Turkey for counterfeit apparel and foodstuffs.  Such goods are transshipped according to the Report through hubs in Hong Kong, Turkey and the UAE and sold in markets in Brazil, Nigeria, and Paraguay.

    Counterfeit pharmaceuticals are of particular concern, having "important consequences for consumer health and safety [that are] exacerbated by the rapid growth of illegitimate online sales . . . [and] contributes to the proliferation of substandard, unsafe medicines that do not conform to established quality standards."  Most of these goods confiscated by the U.S. were transshipped through China, Hong Kong, India, Canada, and the Dominican Republic and arose from China, India, the Philippines, Vietnam, Indonesia, and Pakistan (according to a report by OECD/EUIPO).  Counterfeit oncology drugs are produced by Bangladesh and Myanmar according to industry sources and "significant quantities of[counterfeit]  COVID-19 testing kits, personal protective equipment (PPE) such as N-95 and equivalent masks, and sanitizers, detergents, and disinfectants" were sourced from China and Vietnam.  These problems are exacerbated by use of legitimate delivery services and online pharmacy sites, particularly those involved in consumer-to-consumer sales, according to the Report.  The remedy again is cooperation, cajolery, and consultation:

    The United States continues to urge trading partners to undertake more effective criminal and border enforcement against the manufacture, import, export, transit, and distribution of counterfeit goods.  The United States engages with its trading partners through bilateral consultations, trade agreements, and international organizations to help ensure that penalties, such as significant monetary fines and meaningful sentences of imprisonment, are available and applied to deter counterfeiting.  In addition, trading partners should ensure that competent authorities seize and destroy counterfeit goods, as well as the materials and implements used for their production, thereby removing them from the channels of commerce.  Permitting counterfeit goods and enabling materials to re-enter the channels of commerce after an enforcement action waste resources and compromise the global enforcement effort.

    The Report does not ignore enforcement, but identifies countries (Columbia, Indonesia, and Turkey) and practices that fall short of adequate efforts.

    Online and broadcast piracy are also discussed, the Report noting that while "[t]he increased availability of broadband Internet connections around the world, combined with increasingly accessible and sophisticated mobile technology, has been a boon to the U.S. economy and trade," "technological developments have also made the Internet an extremely efficient vehicle for disseminating pirated content, thus competing unfairly with legitimate e-commerce and distribution services that copyright holders and online platforms use to deliver licensed content."  Sources of counterfeit optical disks mentioned in the Report include China, India, Mexico, and Pakistan, with Argentina, Canada, Chile, China, Colombia, the Dominican Republic, India, Mexico, the Netherlands, Romania, Russia, Switzerland, Thailand, Ukraine, and Vietnam being identified as "hav[ing] high levels of online piracy and lack effective enforcement" estimated as costing the U.S. economy "at least $29.2 billion and as much as $71 billion in lost revenue each year."  A particular form of copyright piracy (particularly of music), termed "streamripping," is practiced (or ineffectively prevented) in Canada, Mexico, the Netherlands, Sweden, and Switzerland.  Technology including illicit Internet Protocol Television (IPTV) services that "unlawfully retransmit telecommunications signals and channels containing copyrighted content through dedicated web portals and third-party applications that run on ISDs or legitimate devices" was used at high levels in Argentina, Brazil, Chile, China, Guatemala, Hong Kong, Indonesia, Iraq, Mexico, Saudi Arabia, Singapore, Switzerland, Taiwan, Thailand, Ukraine, and Vietnam.  China, according to the Report, with Iraq being identified as being a source of satellite receivers having "preloaded" pirate IPTV applications.  Also noted were the use of camcorders to produce expropriated contend, in Russia, India, and China, with impediments to counteracting such illicit activities found in Argentina, Brazil, Ecuador, India, Peru, and Russia (which don't effectively criminalize such activities).  The significance of the problem was synopsized in the Report as follows:

    In addition to the distribution of copies of newly released movies resulting from unauthorized camcording, other examples of online piracy that damage legitimate trade are found in virtually every country listed in the Report and include: the unauthorized retransmission of live sports programming online; the unauthorized cloning of cloud-based entertainment software, through reverse engineering or hacking, onto servers that allow users to play pirated content online, including pirated online games; and online distribution of software and devices that allow for the circumvention of TPMs, including game copiers and mod chips that allow users to play pirated games on physical consoles.  Piracy facilitated by online services presents unique enforcement challenges for right holders in countries where copyright laws have not been able to adapt or keep pace with these innovations in piracy.

    Difficulties in trade secret protection has its own subsection of the Report.  The problems of adequately protecting trade secrets have arisen "in a wide variety of industry sectors, including Information Communications Technology (ICT), services, pharmaceuticals and medical devices, environmental technologies, and other manufacturing sectors, rely on the ability to protect and enforce their trade secrets and rights in proprietary information" and include theft of "business plans, internal market analyses, manufacturing methods, customer lists, and recipes" that "are often among a company's core business assets," according to the Report.  The Report states that trade secret protection (or lack of it) is a particular problem in Russia, China, and India.  Certain U.S. trade partners have made successful efforts in 2020 (including the EU and Taiwan, as well as aspects of the trade deal struck between the U.S. and China last year; see "U.S. and China Approve Trade Agreement: Part 1"), the Report calls for action by international organizations such as the OECD and APEC.

    Another subsection of the Report involved "forced" technology transfer, indigenous innovation, and preferences for indigenous IP.  These include the following activities, many of which involved governmental action:

    • Requiring the transfer of technology as a condition for obtaining investment and regulatory approvals or otherwise securing access to a market or as a condition for allowing a company to continue to do business in the market;

    • Directing state-owned enterprises in innovative sectors to seek non-commercial terms from their foreign business partners, including with respect to the acquisition and use or licensing of IP;

    • Providing national firms with an unfair competitive advantage by failing to effectively enforce, or discouraging the enforcement of, U.S.-owned IP, including patents, trademarks, trade secrets, and copyright;

    • Failing to take meaningful measures to prevent or to deter cyber intrusions and other unauthorized activities;

    • Requiring use of, or providing preferences to, products or services that contain locally developed or owned IP, including with respect to government procurement;

    • Manipulating the standards development process to create unfair advantages for national firms, including with respect to participation by foreign firms and the terms on which IP is licensed; and

    • Requiring the submission of unnecessary or excessive confidential business information for regulatory approval purposes and failing to protect such information appropriately.

    China and Indonesia are recognized for such practices.

    As in other years, geographical indications (i.e., country or region of origin limitations primarily for wine and foodstuffs) are discussed, specifically in the EU.  This is particularly troubling for trademarks, the Report stating that "[t]he EU GI agenda remains highly concerning, because it significantly undermines the scope of trademarks held by U.S. producers and imposes barriers on market access for U.S.-made goods that rely on the use of common names, such as parmesan or feta."  These practices are particularly troublesome for MSMEs, according to the Report, because their trademarks are "among the most effective ways for producers and companies . . . to create value, to promote their goods and services, and to protect their brands."  Also a specific concern for the U.S. is that these GI practices produce a trade barrier to U.S. goods in the EU, particularly when GI protection is given to "common names" for a product (Havarti and danbo cheese being given as examples).  The effects of these practices are exacerbated by the "significant deficit in food and agricultural trade" between the US and the EU (with Europe exporting $1 billion in cheese to the U.S. versus $5.5 million of U.S. cheese being imported by the EU).  While having little luck dissuading the EU from continuing and expanding its GI practices, the Report cites several bilateral agreements (with Argentina, Australia, Brazil, Canada, Chile, China, Ecuador, Indonesia, Japan, Kenya, Korea, Mexico, Morocco, New Zealand, Paraguay, the Philippines, Singapore, Tunisia, Ukraine, Uruguay, Vietnam, and others) that have a number of provisions aimed at curtailing some of the deleterious effects of GI protection.

    With regard to pharmaceuticals and medical devices and market access for U.S. products, the Report contends that "[t]he COVID-19 pandemic has highlighted the importance of pharmaceutical, medical device, and other health-related innovation, as well as a lack of widespread, equitable distribution of these innovations," including the need for fighting the current as well as future pandemics.  The Report cites tariffs and other taxes levied by countries including Brazil, India, and Pakistan, as well as "unreasonable regulatory approval delays and non-transparent reimbursement policies" that "discourage the development and marketing of new drugs and other medical products."  The Report recites successful efforts in Canada, Mexico, Chine, the UAE, Korea, Japan, and Indonesia to address issues of transparency and fairness in this sector.  On the other hand, the Report also notes that stakeholders have "expressed concerns" about practices in Australia, Canada, China, Japan, Korea, New Zealand, and Turkey, "on issues related to pharmaceutical innovation and market access."

    Trademark issues are noted in the Report for China, India, Malaysia, the Philippines, Panama, Russia, Iraq South Africa, Kuwait, Oman, and the UAE with regard to "bad faith" trademark applications, slow opposition and cancellation proceedings, and delays in processing trademark applications.  Mandatory recordation requirements that impose "unnecessary administrative and financial burdens on trademark owners and create difficulty in the enforcement and maintenance of trademark rights" are asserted for Brazil, Ecuador, Egypt, and Spain.  Specific examples of trademark issues, including "unauthorized domain name registration and trademark uses in some country code top-level domain names," and copyright royalty collection issues have arisen in India and the UAE.

    Software concerns included in the Report involve government use of unlicensed software (costing $46 billion globally in 2018 according to The Software Alliance).  This issue is particularly noted in Argentina, China, Guatemala, Indonesia, Pakistan, Paraguay, Romania, Thailand, Turkey, Turkmenistan, Ukraine, Uzbekistan, and Vietnam but the Report states that "[t]he United States continues to work with other governments to address government use of unlicensed software, particularly in countries that are modernizing their software systems or where there are infringement concerns."

    As in prior years, the Report sets forth subsections on IP and the environment (stating that "[s]trong IP protection and enforcement are essential to promoting investment in innovation in the environmental sector" which "not only promotes economic growth and supports jobs, but also is critical to responding to environmental challenges) and IP and health.  This latter discussion is focused (perhaps inevitably) on the COVID pandemic.  Here, the "top priority" is "saving lives and ending the pandemic in the United States and around the world" (rather than protecting IP as it is throughout the other sections of the Report).  With a nod to the international consequences of the prior administration, the Report states that "[a]s part of rebuilding U.S. alliances, the United States is exploring every avenue to coordinate with the global community and is evaluating the efficacy of proposals in multilateral fora, including the WTO, by their true potential to save lives, end this pandemic, and respond to the next one."

    This section also includes an extensive discussion of the provisions of the TRIPS agreement, the Doha Declaration, and Article 31 TRIPS regarding compulsory licenses.  The USTR through this Report states that the U.S. "strongly supports the WTO General Council Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health" (which permits member states to issue compulsory licenses to export pharmaceuticals to countries who cannot produce these drugs themselves).  Also included in the Report is a section devoted to implementation of the TRIPS Agreement with regard to the requirement for "certain minimum standards of IP protection and enforcement."

    Finally, the Report notes that the U.S. "continues to monitor the resolution of concerns and disputes announced in previous Reports" and "will use all available means to resolve concerns, including bilateral dialogue and enforcement tools such as those provided under U.S. law, the WTO, and other dispute settlement procedures, as appropriate."

    Section II of the Report is a detailed, country-by-country discussion for each country on the Priority Watch List and the Watch List, relating to the activities (or lack thereof) of each country that results in placement of that country on these lists.

    As it has for the past several years (and across otherwise very different Administrations), the U.S. Trade Representative Special 301 Report provides insights into both the concerns of U.S. IP rights holders and the Administration's intentions to work with other countries to increase protection for IP rights of U.S. IP rights holders.  While enunciating U.S. interests and policies consistent with earlier Reports, this Report is notable for the lack of specific and detailed discussions of individual countries' deficiencies with regard to respecting IP rights, particularly U.S. stakeholders' IP rights.  It lacks some of the more broad-brush accusations or assertions against our trade partners, and uses more conciliatory language espousing cooperation rather than confrontation.  And it is very different in tone from earlier Reports wherein the complaints, and even the language enunciating these complaints, has remained dispiritingly the same, suggesting that despite pronouncements of small victories efforts to reduce unfair trade practices globally have fallen far short.  Consistent with other actions, real and symbolic, made by the Biden Administration, the USTR through this Report seems to be offering something of an olive branch to our trade partners.  The stick hasn't been particularly effective in promoting IP-respecting behavior in the past; perhaps the carrot(s) contained in this Report will have more success.

    For additional information regarding this and other related topics, please see:

    • "U.S. Trade Representative Releases 2020 Special 301 Report," May 10, 2020
    • "U.S. Trade Representative Releases 2019 Special 301 Report," April 29, 2019
    • "U.S. Trade Representative Releases 2018 Special 301 Report," April 29, 2018
    • "U.S. Trade Representative Issues 2017 Special 301 Report," May 4, 2017
    • "U.S. Trade Representative Issues 2016 Special 301 Report," May 19, 2016
    • "U.S. Trade Representative Issues 2015 Special 301 Report," April 30, 2015
    • "U.S. Trade Representative Issues 2014 Special 301 Report," May 19, 2014
    • "U.S. Trade Representative Issues 2013 Special 301 Report," May 30, 2013
    • "U.S. Trade Representative Issues 2012 Special 301 Report," May 1, 2012
    • "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 4, 2011
    • "U.S. Trade Representative Releases Special 301 Report on Global IPR," May 19, 2010
    • "New Administration, Same Result: U.S. Trade Representative's Section 301 Report," May 6, 2009
    • "Congressmen Criticize U.S. Trade Representative over Special 301 Report," July 1, 2008
    • "U.S. Continues Efforts to Protect Patent Rights Abroad," April 29, 2008

  • Conference & CLE Calendar

    CalendarMay 25, 2021 – "A Year in Review: PTAB Practice Updates, the Impact of COVID, and Lessons Learned Along the Way" (Intellectual Property Law Association of Chicago AIA Trials Committee) – 10:00 to 11:00 am (CT)

    May 25, 2021 – "Immunology and the Patentability and Enforcement of Immunotherapies" (IPWatchdog and Morningside IP) – 12:00 pm (ET)

    May 25, 2021 – "Inventor Diversity: How to Obtain and Leverage Inventor Gender Diversity Metrics" (Intellectual Property Owners Association) – 2:00 pm to 3:00 pm (ET)

  • IPLAC Fireside Chat on PTAB

    IPLACThe Intellectual Property Law Association of Chicago (IPLAC) AIA Trials Committee will be presenting a fireside chat entitled "A Year in Review: PTAB Practice Updates, the Impact of COVID, and Lessons Learned Along the Way" on May 25, 2021 from 10:00 to 11:00 am (CT).  Vice Chief Administrative Patent Judge Michael Tierney of the U.S. Patent and Trademark Office's Patent Trial and Appeal Board and George "Trey" Lyons, III of McDonnell Boehnen Hulbert & Berghoff LLP will look at changes to, and the impact of the COVID-19 pandemic on, AIA Trial Proceedings, including: discretionary denials, motion to amend pilot program, § 101, and appealability, as well as lessons learned from the pandemic that will influence PTAB practice moving forward.

    The panel discussion is free for IPLAC members.  Those interested in registering for event can do so here.