SOW Honored to Participate in the 2nd IP Monetization and Commercialization Forum in China

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On June 26, 2016, SOW was honored to participate in the 2nd IP Monetization and Commercialization Forum in the ancient city of Suzhou, China.  There were over 1000 enthusiastic professionals in attendance including notable government dignitaries.  The focus of the forum was high level discussions on the increasing importance of intellectual property rights for the long-term prosperity of the Chinese economy.

The keynote speaker was Mr. Yongtu Long 龙永图, whom has held the position of Secretary-General of the Boao for Asia  since 2003.  Secretary-General Long served as the chief negotiator for China’s accession into the World Trade Organization (WTO) in 2001, when he served as a Director-General  at the Chinese Ministry of Foreign Trade and Economic Cooperation.  Secretary-General Long convincingly encouraged the forum’s participants to grow the “innovation economy” of China, with a particular emphasis on patents.

Other speakers included the Chief of Jiangsu Province IP Bureau, the Mayor of Suzhou, the CEO of WTOIP, as well as other Chinese dignitaries, celebrities, and foreign guests.

SOW’s own Daniel H. Sherr was honored to be a panelist in the Summit Discussion of Global IP Business as an expert on patent transactions and patent strategy.  Mr. Sherr’s commentary focused on the practical challenges to maximizing the power of intellectual property rights in the increasingly innovative global economy.

Suzhou in an ancient city that was founded 2,500 years ago in 514 BC, located about 100 km (62 miles) northwest of Shanghai.  Suzhou is often called the “Venice of the East” due to the cities extensive infrastructure canals, stone bridges, pagodas, and meticulously designed gardens.  In recent history, Suzhou has been an economical hub for the prominent Jiangsu Province, with a population of more than 10 million people.  China is deeply proud of Suzhou, which made it the perfect setting for the 2nd IP Monetization and Commercialization Forum.

Check out photos from the event:

 

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New Website Showcases Talented Personnel and Evidences Rapid Firm Growth

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We are very excited to present our brand new website and showcase the talented personnel here at SOW and the various legal services we provide.  The accumulation of talented personnel is a result of rapid growth of our firm, including new offices in Washington DC and Rochester, NY in the last year, and an office outside Boston, MA. Please browse our site and meet our dedicated attorneys and agents.

SOW Welcomes Daniel Sherr to Head Up our Washington DC Office

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SOW is proud to welcome Daniel Sherr to the firm, who will be managing our Washington DC office.  Dan graduated from Virginia Polytechnic Institute and State University with a degree in Electrical Engineering, and George Mason University School of Law, and is a former Patent Examiner.  He brings a wealth of knowledge and experience in patent licensing and monetization, and is well versed in a broad spectrum of electrical technologies.  Welcome Dan!

Law Alert – “De Minimis” Exception for Copyright Infringement of Sound Recordings

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Ninth Circuit Rules that the “De Minimis” Exception for Copyright Infringement Applies to Sound Recordings, Creates Circuit Split

The Ninth Circuit, in a 2-1 decision, has ruled that Madonna is not liable for copyright infringement for incorporating a 0.23 second horn blast from a disco song in her 1990 song “Vogue,” holding that the “de minimis” exception, which excuses the unauthorized use of a small piece of a copyrighted work, applies to sound recordings. The Court held that, as reasonable juror could not conclude that an average audience would recognize the appropriation of the horn blast, Madonna has not benefited from the original artist’s expressive content and therefore, there is no infringement.

This ruling directly contradicts a decision by the Sixth Circuit in Bridgeport Music v. Dimension Films, a 2005 decision which expressly held that the “de minimis” exception didn’t apply when it comes to sound recordings. Bridgeport Music v. Dimension Films, 410 F.3d 792, 799 – 800 (6th Cir. 2005). The court in Bridgeport found that no unauthorized sampling was too small to constitute copyright infringement, stating in no uncertain terms “get a license, or do not sample.” Id. at 801.

As it was an open question in the Ninth Circuit whether the “de minimis” exception applied to claims of infringement of a copyrighted sound recording, the court began its analysis with the statutory text. The Plaintiff argued that Congress intended to create a special rule for copyrighted sound recordings, eliminating the “de minimis” exception. VMG Salsoul, LLC v. Ciccone at 24 (9th Cir. 2016). The plaintiff, and the Sixth Circuit, relied on 17 U.S.C § 114(b) which states:

The exclusive rights of the owner of copyright in a sound recording under clauses (1) and (2) of section 106 do not extend to the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording.

The Sixth Circuit held that as Congress stated that protection did not extend to independent sounds, even those which sound similar to the copyrighted sound recording, protection did extend to everything else. Bridgeport Music v. Dimension Films, 410 F.3d at 800. In other words, the Sixth Circuit found that if the infringing recording consists of anything but independent sounds, the copyright extends to it. Id.

The Ninth Circuit rejected this interpretation of § 114(b). The court stated that “a statement that rights do not extend to a particular circumstance does not automatically mean that the rights extend to all other circumstances.” VMG Salsoul, LLC v. Ciccone at 27. As the court found that the “de minimis” exception applied to all other copyrighted artistic works, they could not conclude that Congress intended to eliminate the “de minimis” exception for sound recordings through § 114(b). Id. at 29.

The Plaintiff further argued that because Congress has not amended the copyright statute in response to Bridgeport, the court should conclude that Bridgeport correctly interpreted congressional intent. Id. at 31. The court stated that the Supreme Court has held that congressional inaction in the face of a judicial statutory interpretation, even with respect to the Supreme Court’s own decisions affecting the entire nation, carries almost no weight, and rejected the argument. Id.; Alexander v. Sandoval, 532 U.S. 275, 292 (2001).

The court held that the “de minimis” exception applies to actions alleging infringement of a copyright to sound recordings. VMG Salsoul, LLC v. Ciccone at 32. The court was aware of the impact of creating a circuit split, but deemed it necessary stating:

We acknowledge that our decision has consequences. But the goal of avoiding a circuit split cannot override our independent duty to determine congressional intent. Otherwise, we would have no choice but to blindly follow the rule announced by whichever circuit court decided an issue first, even if we were convinced, as we are here, that our sister circuit erred. Id at 29.

The opinion was accompanied by a strongly worded dissent from U.S. Circuit Judge Barry G. Silverman, believing that in any other context this would be called theft. Id. at 33. Judge Silverman stated that:

The majority chooses to follow the views of a popular treatise instead of an on-point decision of the Sixth Circuit, a decision that has governed the music industry in Nashville – “Music City” – and elsewhere for over a decade without causing either the sky to fall in, or Congress to step in. And just exactly what is the Sixth Circuit’s radical holding in Bridgeport Music, Inc. v. Dimension Films that the majority finds so distasteful? It’s this: if you want to use an identical copy of a portion of a copyrighted fixed sound recording – we’re not talking about “substantially similar” tunes or rhythms, but an actual identical copy of a sound that has already been recorded in a fixed medium – get a license. You can’t just take it. Id at 34.

True, Get a license or do not sample doesn’t carry the same divine force as Thou Shalt Not Steal, but it’s the same basic idea. I would hold that the de minimis exception does not apply to the sampling, copying, stealing, pirating, misappropriation – call it what you will – of copyrighted fixed sound recordings. Id. at 38.

Congratulations to Joyce Patrick-Bai!

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Our firm proudly congratulates Joyce Patrick-Bai, CLM who was named the Association of Legal Administrator’s Region 6 Volunteer of the Year last week at the 2016 ALA Conference in L.A. Joyce has been a member of the Greater Phoenix-Valley of the Sun Chapter since March 1999. She has held various volunteer roles at the Chapter level including Business Partner Chair, State Bar Chair, President.

In, 2004, Joyce was selected as a Region 6 officer and in 2006 she was appointed to ALA’s International Board of Directors where she served for 2 years. In 2011, she served on the Association Nominating Committee; in 2015 she was a member of the IP Conference committee and she was just named the 2016 IP Conference Chair. Along with all these volunteer roles, Joyce is above all always an ambassador for ALA. She is a friend to all and very much likes to see others succeed. She without a doubt embodies what the Region 6 volunteer award is all about. Well done!

Law Alert – Amendments in Inter Partes Review (IPR) Proceedings

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Federal Circuit Reaffirms USPTO’s Approach to Amendments in IPR Proceedings

Aqua Products appealed from a final decision of the Patent Trial and Appeal Board (“Board”) in an IPR of U.S. Patent No. 8,273,183, denying Aqua Products’ motion to substitute claims. Aqua challenged that the Board inappropriately places the burden on the patentee to demonstrate the amended claims would be patentable over the art of record and that the Board abused its discretion by failing to evaluate objective indicia of non-obviousness and the new limitations in the proposed claims. The court affirmed that the burden belongs on the patentee and held that the Board is only required to address arguments that Aqua Products actually raised in its motion to amend.

In their substituted claims, Aqua Products added 4 new limitations to overcome cited prior art. In Re: Aqua Products, Inc., at 4. However, in its motion to amend Aqua Products only specifically addressed one of these limitations as rendering the substitute claims not obvious in view of the prior art. Id. In denying the motion, the Board addressed only this limitation, stating that it would have been obvious in view of the prior art. Id.

The court noted that under 37 C.F.R. § 42.121 the Board may deny a motion to amend if the amendment expands the claim scope or “does not respond to a ground of patentability involved in the trial.” In Re: Aqua Products, Inc., at 6. As PTO regulations place the burden for any motion on the movant, see 37 C.F.R. § 42.20(c), the Board has interpreted § 42.121 as placing the burden on the patentee to show the proposed amendments would make the claims patentable over the known prior art. Id. The court cited several prior decisions affirming that the burden belongs on the patentee and affirmed that again in this decision. Id.; Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 130 –1308 (Fed. Cir. 2015); Prolitec, Inc. v. ScentAir Techs., Inc., 807 F.3d 1353, 1363 (Fed. Cir. 2015); Nike, Inc. v. Adidas AG, 812 F.3d 1326, 1333–1334 (Fed. Cir. 2016).

In addressing whether the Board abused its discretion by failing to address the additional limitations Aqua Products added in its proposed claims, the court held that the Board is only required to address the arguments which Aqua Products actually raised. In Re: Aqua Products, Inc., at 6 – 7. Aqua Products argued that the Board was “on notice” of the additional limitations as they were referenced throughout the proceeding. Id. at 7.  The court held that as these additional limitations were not referenced in the motion to amend to explain why the substitute claims were not obvious in view of the prior art, the Board was under no obligation to consider them in evaluating the motion to amend. Id. The court reasoned that requiring the Board to consider arguments not brought in support of patentability would require the Board to fully reexamine the proposed claims in the first instance, effectively shifting the burden from the patentee to the Board. Id. The Board is only required to show that it fully considered the particular arguments raised by the patentee and that it provided a reasoned explanation for why those arguments were unpersuasive. Id. The court found that those requirements were satisfied here. Id.

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