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Star Wars, Erich Spangenberg, The Trademark Company, IP licensing, Spotify, PTAB, David Bowie – the week in IP



Michael Loney


IP disputes involving the Star Wars franchise, the correct way to analyse patent litigation, the USPTO being sued for allegedly violating a trade mark filer’s Constitutional rights, IP licensing companies’ tough year, Spotify facing another class action, and David Bowie’s copyright legacy were in the IP headlines this week

Also on the blog this week:

US Supreme Court to hear Cuozzo and Kirtsaeng cases

Some practical questions about the UPC



Star Wars IP wars

There was no way that Star Wars was going to break every box office record going without a story on the IP aspects of the cultural phenomenon coming out. Foley Hoag’s Trademark & Copyright Law blog this week obliged with a good post on the IP litigation concerning the franchise over the years.

The first IP spat came in 1977 when Ideal Toy company – which had turned down the chance to make the officially licensed products because it thought Stars Wars "was a rather ordinary property" – came out with a line of Star Team-branded action figures. These included a Knight of Darkness sporting a black helmet and two inseparable android friends. The official licensee, Kenner Products, was not best pleased and sought a preliminary junction alleging copyright and trade mark infringement. The Southern District of New York was not convinced.

Other IP disputes covered in the blog post are a dispute with the makers of Battlestar Galactica, a lawsuit against Clarks shoes, George Lucas trying to stop people from referring to Ronald Reagan’s Strategic Defense Initiative as "Star Wars", and unsuccessful attempts to block a porn parody "Starballz" (which Foley Hoag partner David Kluft describes as "offensive, unintelligible and only slightly more entertaining than The Phantom Menace").



A better way to look at litigation figures?

Some analyses of US patent litigation figures in 2015 have been released recently (us included – see my blog post here), which revealed that last year had the second-highest number of patent lawsuits filed ever.

Erich Spangenberg took to his blog this week to say that the more relevant number is not cases filed but "the rate of patent litigation". Spangenberg points out that the AIA had a big effect on cases filed because it changed the rules by limiting how many defendants could be put together in one case, which explains why there was a large increase in cases filed in 2012.

He said another problem with saying 2015 was nearly an all-time high for litigation is that it doesn’t take into account the fact there are now more patents. "If there are more patents, 'it must follow, as the night the day,’ that there will be more patent litigation. Since patents are a right to exclude they must be enforced to have any value, and that will mean more litigation," he wrote.

More accurate, said Spangenberg, is the number of defendants added divided by the number of active utility patents – which gives the rate of patent litigation. Last year was the second lowest number by this measure since 2010.

"Something interesting did happen in 2015 though – NPE litigation is way up," said Spangenberg. "Total defendants added in NPE cases, 5,349, IS at an all-time high. Operating company litigation actually showed a slight decline from 2014." He suggested one reason may be that IPRs and Alice may have ironically contributed to this by reducing operating companies’ willingness to negotiate a licence.



USPTO sued for alleged Constitutional rights violation

The proprietor of The Trademark Company is suing the USPTO for allegedly violating his Constitutional rights when investigating his practices in the filing and prosecuting of trade mark applications, reports The TTABlog.

Matthew Swyers believes the USPTO’s requests for information were "designed to harass, overburden, invade, injure and damage the plaintiff and his business". He is seeking injunctive relief and damages. 

The Trademark Blog says The Trademark Company is reportedly the second largest filer of trade mark applications in the US, and uploaded Swyers’ complaint here.



PIPCOs suffer tough 2015

The public IP licensing company index followed by the IP CloseUp blog was down 24.4% in 2015, compared with the 0.7% decline of the S&P 500.

Bruce Berman said in a blog post that the poor performance was a result of the weakening of patents and patent values, and the increase in uncertainty resulting from the AIA and cases such as Alice.  

Berman noted the worst performers were Marathon, Acacia and ParkerVision, down 81%, 74.7% and 74.7% respectively. The index’s only gainer in 2015 was Rambus, which was up 4.5%.



spotifySpotify sued for second time in two weeks

Spotify is facing its second class action suit alleging systemic and wilful copyright infringement, reports Billboard. The suit was filed by law firm Gradstein & Marzano and is led by recording artist Melissa Ferrick. It seeks $200 million in damages.

The suit says that Spotify outsources its licensing and accounting obligations to the Harry Fox Agency rather than pursuing direct licenses or using the compulsory mechanical licence mechanism. The suit says the agency "was ill-equipped to obtain licenses for all of the songs embodied in the phonorecords distributed by Spotify".

The latest lawsuit follows one filed on December 28 seeking $150 million in damages. That lawsuit was filed by rock band Camper Van Beethoven and David Lowery, the frontman of band Cracker. It alleges Spotify knowingly, willingly and unlawfully reproduces and distributes copyrighted songs without getting mechanical licences.



PTAB icon 250PTAB deems two decisions precedential  

The Patent Trial and Appeal Board this week designated two of its decisions as precedential, reports the Patents Post-Grant blog.

The two decisions were the LG Electronics v Mondis Tech inter partes review decision released September 17 2015 and the Westlake Services v Credit Acceptance covered business method review decision released May 14 2015.

The LG decision pertains to interpretation of "served with a complaint" for purposes of triggering the one-year time bar set forth in 35 USC § 315(b). The Westlake Services order interprets the estoppel provision of 35 USC § 325(e)(1).

"The first decision, LG is more noteworthy given it addresses the 12-month window, a topic that can get quite complicated in the case of multiple complaint filings," explained Oblon’s Scott McKeown in the blog post.



David Bowie and IP

David Bowie’s death this week has prompted an outpouring of grief. It has also caused intellectual property followers to note Bowie’s keen interest in IP matters.

Bowie was very forward thinking about IP and in particular the impact of the internet. For example, in an interview with the New York Times in 2002 he said: "The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I see absolutely no point in pretending that it's not going to happen. I'm fully confident that copyright, for instance, will no longer exist in 10 years, and authorship and intellectual property is in for such a bashing.''

He wasn’t quite right with that specific prediction, but he was correct in general. Bowie added: "Music itself is going to become like running water or electricity. So it's like, just take advantage of these last few years because none of this is ever going to happen again. You'd better be prepared for doing a lot of touring because that's really the only unique situation that's going to be left. It's terribly exciting. But on the other hand it doesn't matter if you think it's exciting or not; it's what's going to happen."

Bowie has previously attracted much interest when he sold "Bowie Bonds". The revolutionary deal in February 1997 allowed the rock star to raise $55 million on the back of future revenues from his back catalogue, a deal we covered here.

Some IP questions were even raised after his death. Techdirt analysed whether radio stations are able to play Bowie’s music all day in tribute. The answer was, because of copyright law, probably not.

In our news and analysis:

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Alonso Camargo of Olivares outlines how Mexico's opposition system runs in parallel to an application at… https://t.co/bvGh3FRzNK

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Here's our take on the #STRONGER Patents Act introduced by @ChrisCoons @TomCottonAR, @maziehirono & @SenatorDurbin… https://t.co/mlG01zpbnO

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