A Very Active White House on IP: The 2013 Joint Strategic Plan on IP Enforcement

The White House, through its Office of the U.S. Intellectual Property Enforcement Coordinator, has released the new 2013 Joint Strategic Plan on IP Enforcement which builds upon the 2010 Joint Strategic Plan.  If anything, the White House is taking a proactive stance on IP.  Interestingly, some stakeholders who ordinarily may disagree seem to think this is generally a “fair” plan (see here and for more discussion see here).  For example, the Electronic Frontier Foundation and the RIAA seem to both give it a cautious “thumbs up.”  One interesting action item concerns the examination of labor conditions of manufacturers of counterfeits.  Here is the discussion of that interesting issue:

There have been anecdotal reports that poor and dangerous working conditions, sometimes involving child labor, are found to exist in facilities where counterfeit and pirated goods are being manufactured overseas or in illicit distribution networks. A deeper analysis of the issue would shed greater light on the problem and provide an opportunity to strengthen our engagement with foreign governments and improve efforts to combat manufacturing and distribution of illicit counterfeit and pirated goods. In addition, the resulting information could enhance public awareness of the direct connection between purchasing infringing goods, supporting illicit businesses, and the impact on working men and women across the globe. Going forward: DOS will begin an examination of the nexus between unacceptable working conditions and the production and distribution of counterfeit goods in certain countries. Further actions will be considered depending upon the outcome of that examination.

It will be interesting to see how this plays out. 

Here is a list of the action items building on the 2010 Joint Strategic Plan (there are 26 including items included in the 2010 Joint Strategic Plan):

1) Facilitate voluntary initiatives to reduce online intellectual property infringement. IPEC will reach out to additional sectors (which may include data storage services, domain name registrars, and search engines) and will also encourage rightholders to adopt a set of best practices. USPTO will start a process to assess the voluntary initiatives; 2) Conduct a comprehensive review of domestic laws to determine needed legislative changes to improve enforcement;  3) Support small and medium-size enterprises in foreign markets. DOC will increase outreach and support to such enterprises through nationwide educational efforts;  4) Evaluate the enforcement process of exclusion orders issued by the U.S. International Trade Commission (ITC). IPEC will chair an interagency working group to improve the process for enforcement of Section 337/ITC exclusion orders; 5) Coordinate international capacity-building and training. IPEC will reorganize the interagency working group on capacity-building and training and embassies will follow up on a regular basis with governments that receive training to evaluate results; 6) Improve transparency in intellectual property policymaking. IPEC will look for additional ways to hear concerns and gather input from a wide range of stakeholders; 7) Improve law enforcement communication with stakeholders. DOJ and ICE will look for additional ways to engage a broad range of stakeholders in an effort to increase understanding of law enforcement operations and expand stakeholder relationships; 8) Assess the economic impact of intellectual property-intensive industries. DOC will issue an annual report on the number of jobs and contribution to the GDP of such industries; 9) Use legal software. IPEC, with the Federal Procurement Policy Administrator and the U.S. Chief Information Officer will review the mechanisms that agencies have in place in order to share best practices and ensure legal use; 10) Examine labor conditions. DOS will examine the relationship between unacceptable labor conditions and the manufacture and distribution of counterfeits and take further action if necessary; 11) Improve IPR enforcement efficacy by leveraging advanced technology and expertise. IPEC will chair an interagency working group to identify and advance new and innovative technologies to improve enforcement capabilities at the border. In addition, law enforcement agencies will look for ways to engage outside technology experts and Internet engineers to increase expertise on online enforcement approaches; 12) Increase focus on counterfeits shipped through international mail and work with express carriers. CBP will work to obtain advance data from international post operators and express carrier companies to improve targeting; 13) Educate authors on “fair use” copyright doctrine. The U.S. Copyright Office will summarize current law and provide general guidance targeted to artists seeking to apply the law to their own situations;  14) Protect intellectual property at the Internet Corporation for Assigned Names and Numbers (ICANN). The National Telecommunications and Information Administration (NTIA) and the FBI will work with ICANN, in collaboration with stakeholders, so that new top-level domains do not become new venues for infringement; and 15) Consider copyright and patent “small claims” courts. The U.S. Copyright Office and USPTO are considering alternative adjudicatory processes for hearing “small claims” cases brought by copyright and patent holders.

There is also an interesting list of government enforcement “successes” since 2010 and here is one of the items:

In April and May 2012, as a result of investigations generated by the IPR Center led Operation In Our Sites, in two separate cases ICE-HSI, working with DOJ, seized over $2 million in proceeds from online sales of counterfeit goods by Chinese perpetrators. The funds were seized from correspondent bank accounts located at the Bank of China in New York under 18 U.S.C. § 981(k), which permits the U.S. Government to seize funds from a foreign institution’s interbank accounts in the United States for forfeiture to the Treasury. This was ICE-HSI’s first use of section 981(k) to seize illicitly-derived proceeds identified as part of an intellectual property rights criminal investigation deposited in a Chinese bank.  . . . .

The White House Moves Against "Patent Trolls"

Today the Obama Administration announced “five executive actions and seven legislative recommendations to protect innovators from frivolous litigation and ensure the highest-quality patents in our system.”  The announcement is here.  The recommendations are below.  The recommendations that seem especially interesting include: expanding challenges to computer enabled patents at the PTO; changing the standard for issuance of injunctions at the International Trade Commission; incentivizing public disclosure of demand letters; increasing efforts to identify the real parties in interest; and making new rules concerning functional claiming in the software context. 

LEGISLATIVE RECOMMENDATIONS

In that spirit, the Administration recommends that Congress pursue at least seven legislative measures that would have immediate effect on some major problems innovators face.  These measures would:

1. Require patentees and applicants to disclose the “Real Party-in-Interest,” by requiring that any party sending demand letters, filing an infringement suit or seeking PTO review of a patent to file updated ownership information, and enabling the PTO or district courts to impose sanctions for non-compliance.
2. Permit more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney’s fees under 35 USC 285 as a sanction for abusive court filings (similar to the legal standard that applies in copyright infringement cases).
3. Expand the PTO’s transitional program for covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB).
4. Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use.  Also, stay judicial proceedings against such consumers when an infringement suit has also been brought against a vendor, retailer, or manufacturer.
5. Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts.
6. Use demand letter transparency to help curb abusive suits, incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.
7. Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges.

EXECUTIVE ACTIONS

Today the Administration is also announcing a number of steps it is taking to help bring about greater transparency to the patent system and level the playing field for innovators.  Those steps include:

1. Making “Real Party-in-Interest” the New Default.  Patent trolls often set up shell companies to hide their activities and enable their abusive litigation and extraction of settlements.  This tactic prevents those facing litigation from knowing the full extent of the patents that their adversaries hold when negotiating settlements, or even knowing connections between multiple trolls.  Today, the PTO will begin a rulemaking process to require patent applicants and owners to regularly update ownership information when they are involved in proceedings before the PTO, specifically designating the “ultimate parent entity” in control of the patent or application.
2. Tightening Functional Claiming.  The AIA made important improvements to the examination process and overall patent quality, but stakeholders remain concerned about patents with overly broad claims — particularly in the context of software.  The PTO will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field.
3. Empowering Downstream Users.  Patent trolls are increasingly targeting Main Street retailers, consumers and other end-users of products containing patented technology — for instance, for using point-of-sale software or a particular business method.  End-users should not be subject to lawsuits for simply using a product as intended, and need an easier way to know their rights before entering into costly litigation or settlement.  Today, the PTO is announcing new education and outreach materials, including an accessible, plain-English web site offering answers to common questions by those facing demands from a possible troll.
4. Expanding Dedicated Outreach and Study.  Challenges to U.S. innovation using tools available in the patent space are particularly dynamic, and require both dedicated attention and meaningful data.  Engagement with stakeholders — including patent holders, research institutions, consumer advocates, public interest groups, and the general public — is also an important part of our work moving forward.  Roundtables and workshops that the PTO, DOJ, and FTC have held in 2012 have offered invaluable input to this process.  Today, we are announcing an expansion of our outreach efforts, including six months of high-profile events across the country to develop new ideas and consensus around updates to patent policies and laws.  We are also announcing an expansion of the PTO Edison Scholars Program, which will bring distinguished academic experts to the PTO to develop — and make available to the public — more robust data and research on the issues bearing on abusive litigation.
5. Strengthen Enforcement Process of Exclusion Orders. Once the U.S. International Trade Commission (ITC) finds a violation of Section 337 and issues an exclusion order barring the importation of infringing goods, Customs and Border Protection (CBP) and the ITC are responsible for determining whether imported articles fall within the scope of the exclusion order. Implementing these orders present unique challenges given these shared responsibilities and the complexity of making this determination, particularly in cases in which a technologically sophisticated product such as a smartphone has been successfully redesigned to not fall within the scope of the exclusion order. To address this concern, the U.S. Intellectual Property Enforcement Coordinator will launch an interagency review of existing procedures that CBP and the ITC use to evaluate the scope of exclusion orders and work to ensure the process and standards utilized during exclusion order enforcement activities are transparent, effective, and efficient.