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Despite exonerating the specific defendants for the specific conduct at issue in the two cases, these new doctrines added both unpredictability and complexity to trademark law. In terms of unpredictability, when a circuit court creates a new defense or exception, an attorney can do little better than guess whether another circuit court will adopt it, and if so, in what form. For example, the Second and Third Circuits have adopted the nominative fair use defense, but both have modified it. While the Third Circuit modified the doctrine only slightly,190 the Second modified it far more substantially.191 The Sixth Circuit has so far rejected nominative fair use entirely.192

In terms of complexity, while complexity in trademark rules can improve our ability to match actual to optimal outcomes, complexity also increases the cost of trademark litigation. These increased costs have led, and will continue to lead, to a two-tiered trademark system: one system for those who can afford it, and a second for those who cannot. For those who can afford it, a complex legal system can produce reasonably sensible, albeit expensive, outcomes. For the far larger number of market participants who can no longer afford trademark litigation, theoretically perfect but complex trademark rules offer only theoretical justice. In reality, for those who cannot afford to marshal them, such rules offer no justice at all. Unable to afford the high costs of trademark litigation, these market participants can neither vindicate their own trademark interests when infringed by others, nor defend themselves against excessive and overbroad assertion of trademark rights by well-funded bullies.193

Inwood Standard” Indiana Law Journal, Iss. 2, Article 9, //DH

But the Tiffany standard is more than just Inwood for services. In addition to what it takes from Inwood, Tiffany creates a more defined and practical gray area within which courts can apply the knowledge requirement.155 Importantly, the Tiffany standard demands more than general knowledge but less than specific knowledge.156 It also leaves open alternative knowledge theories, such as willful blindness. The Second Circuit stated: "For contributory trademark infringement liability to lie, a service provider must have more than a general knowledge or reason to know that its service is being used to sell counterfeit goods. Some contemporary knowledge of which particular listings are infringing or will infringe in the future is necessary."157 This holding keeps with Inwood's narrow standard but also aligns with the Supreme Court's subsequent interpretations of Inwood in other cases.158 It rightly rejects general knowledge. If general knowledge were enough, online service providers would constantly be embroiled in contributory infringement actions merely because of their business model. In Tiffany, eBay conceded that it knew generally that there were counterfeit Tiffany goods on its site.159 With a case so easy to prove—all a plaintiff would need to show is that counterfeiting occurred somewhere on the site without having to provide an example—online service providers would be subject to witch hunts for damages simply because direct infringers chose the provider's site as a sales platform. Moreover, "some contemporary knowledge" is not as narrow as specific knowledge.160 This is a kinder standard to the plaintiff, as it is not as stringent and leaves open the window of circumstantial evidence. Additionally, contemporary knowledge ensures that the online service provider is not being sued merely for its business model, but instead because there were genuine infringing acts occurring that the provider knew of and should have stopped.

Introducing a licensing requirement for the development and adoption of generative AI systems would have profound economic implications.

•Barrier to Entry: Given the vast number of works an AI training dataset might need to use—and the fact that thousands or millions of individuals might own those works—obtaining licenses for all underlying content becomes a significant challenge. This could act as a barrier to entry for smaller companies or startups that lack the resources to negotiate and secure such licenses.

Third, even for commercially valuable works that are not orphaned, copyright ownership is far from clear for many works, making remuneration at scale destined for protracted litigation. While existing compulsory licensing regimes focus on areas of practice where licensing and transfer of rights has largely been standardized, most other areas of copyright do not have such clarity. For example, even with commercially published books, publication contracts, i.e., private agreements between authors and publishers, take a wide variety of approaches to allocating ownership rights across geographic locations, formats, and time. Whether, for example, using works as training materials for AI models would constitute an “electronic work” under those licenses would be an important question. This issue has been litigated and remains unresolved and largely unresolvable without close examination of each contract.57

3. GAI Copyright Litigation Is Expensive, Complex, and Unsustainable

As shown by the general overview of GAI in Part I, GAI models are complex and diverse in terms of techniques and approaches. These models often lack transparency, either due to their inherently opaque technical nature or because the law limits access to them, making the model a black box.131

Beyond the prior discussion of benefits arising from patent ownership, a relevant secondary consideration is the social cost that may arise from AI patents. More specifically, it is prudent to determine how these patents might be monetized and the societal impact arising therefrom. This concern is germane to a primary issue in modern patent scholarship, namely attempts to discourage the patent assertion entity (also referred to as “patent troll”) business model.288 The below discusses how AI patents might further troll litigation if these rights were allocated to software companies (in contrast to being allocated to AI users, as proposed herein).

Societal costs associated with patent troll litigation are substantial.289 Activity of this nature cannot proceed, however, unless trolls are able to purchase patents.290 That end is furthered where—as discussed below—patentees have no means of financially exploiting a patent except selling it. This would be the situation for many AI patent owners if patent rights were given to parties other than market participants (e.g., software companies).

Pretty much. In fact, quite the opposite, allowing AI-generated patents would have real negative social consequences. Patent trolls with enough money would then be able to build systems that read other patents and construct new patents based on them, and flood the patent office with garbage patents that they can then use to clog up the legal system with lawsuits against anybody who tries to patent something similar, all while contributing exactly nothing to the state of the art.

Patent eligibility, or the fundamental question of what is patentable, is currently under congressional review. Sens. Thom Tillis (R-N.C.) and Chris Coons (D-Del.) have introduced the Patent Eligibility Reform Act (PERA) to reform Section 101 of the U.S. Patent Act, which defines what can be patented. But some of the proposed changes do much more than clarify patent eligibility, aiming instead to reverse a series of Supreme Court decisions issued in response to growing concerns over patent abuse and its chilling effects on innovation. More importantly, while the Supreme Court has consistently held that “laws of nature, natural phenomena, and abstract ideas” are not patentable, these legislative proposals attempt to upend that position and expand the scope of patent eligibility directly contra to court rulings.

Enhancing Innovation or Creating Monopolies?

4. Strategic Reasons - Patents as Poker Chips & Ballistic Missiles

A shift in the paradigmatic value of patents has also increased the number of applications. Traditionally, the patent grant has been recognized as "an efficient method of enabling the benefits of research and development to be internalized, this promoting innovation and technological progress.""'9 However, patents are often sought for reasons far removed from recouping R&D investment costs and product commercialization. '7Applications are filed for a diverse number of strategic reasons. Patents are routinely treated as poker chips, facilitating the bargaining for technology necessitated by the interdependence of the Information Age. In addi-tion, firms increasingly seek to amass broad and overlapping patent rights as a means to threaten competitors when bargaining fails.

d. Expanding patent eligibility to include non-technological innovations would cause real and substantial harms.

While patents on football plays and marriage proposals are not themselves of much concern to HTIA, they demonstrate the vastness of the non-technological subject matter that falls between what is currently patent eligible and what would be eligible under PERA. As amply demonstrated by the history of patent litigation in this country, HTIA’s concerns are more than credible, given the well-documented harm imposed on HTIA members (and many others) by the assertion of patents for non-technological “inventions” such as business methods prior to the Alice decision. Having experienced the flood of lowquality patents claiming business methods “on a computer” in the wake of the introduction of personal computers and a second flood of similarly harmful patents claiming nontechnological processes performed “on the internet,” HTIA members and other similarly-situated technology companies were forced to absorb billions of dollars of additional (and completely unnecessary) litigation costs in order to defend themselves against infringement suits based on patents—mostly involving obvious implementations of business methods—that were invalid under Supreme Court caselaw and should never have been issued.

The bill - designed to simplify and improve design and patent protection, particularly for SMEs - would make it a criminal offence, punishable with up to 10 years in prison, to deliberately copy a registered design. It passed through the House of Lords on Tuesday July 30, 2013 with an amendment to improve defences available to those prosecuted after the bill has passed into law.

The proposed amendment includes a clause allowing those accused of infringement to defend their themselves on the grounds that they ‘reasonably believed’ that they had not done so.

The strength of the patent right also drives application demand. The patent holder's ability to sue those who infringe the patented invention is the government's quid pro quo for the patent holder's disclosure of the underlying innovation to society And the government lives up to its end of the bargain by extending powerful rights to patent holders. There is a strong presumption that an issued patent is valid and this showing can only be rebutted by a potential infringer by clear and convincing evidence." The patent holder, however, must prove infringement by a mere preponderance of the evidence.' The deck is clearly stacked against infringers from the start. It only gets worse for alleged infringers from there.

Courts have become markedly sympathetic to patentees since the creation of the Court of Appeals for the Federal Circuit in 1982."6 Also, the infringement action is more liberally construed in the United States. The doctrine of equivalents extends the exclusionary power of the patent to cover substantial similar products that are the equivalent of the claimed invention. ' This form of infringement is rarely adopted elsewhere. 6 The actual work that this doctrine does for patent holders has been questioned. 63 But, its mere existence is another strong, if only symbolic, indication of a distinctly propatent legal system.

A coalition of tech companies, retailers and tech activist groups lined up on Monday in opposition to the latest legislative effort to limit patent invalidation in the courts, warning that unseating legal precedents over eligibility would lead to a coming “wave of crippling [damaging] litigation.”

Called the Patent Eligibility Restoration Act of 2023, the law would create new boundaries for when a patent can be invalidated under Section 101 of the Patent Act that would wipe away a decade of judicial decisions on eligibility that attorneys often say are unpredictable. The industry groups, joined also by more activist-bent advocacy groups like the Electronic Frontier Foundation and the center-right think tank the R Street Institute, painted a grim picture of a world with more patent rights.

3. Substantive Patent Laws - If You Build It, They Will Come

Another reason applicants have inundated the USPTO with applications is because U.S. patent law has exceedingly liberal requirements for patentability and strongly favors patent holders. Thus, the appeal of a U.S. patent is generally much greater than patents in other jurisdictions. As discussed earlier, the USPTO must not discriminate on the grounds of national origin when extending patent protection. The office also does not discriminate on the grounds of subject matter, and seemingly, any true showing of an inventive step. Coupled with the empowerment of the U.S. patent holder in court, applications flood the office from all over the world.

Disputes in general arise from a divergence of interests or belief and/or breach of fiduciary duty that cannot be reconciled.18) The occasional occurrence of such disputes is inevitable among parties that differ in interests, perceptions, and preferences, but they can be managed and resolved, when they occur, through various mechanisms. Dispute resolution mechanisms somewhat differ in countries because they are specified by national laws that reflect a country's history, political system, economic and social circumstances, and cultural factors.19) Generally, the methods for resolving disputes can be divided into two procedures: court litigation and alternative dispute resolution (ADR) methods. 20)

Judicial litigation in court is the traditional way of resolving disputes; however, beginning in the late 1980s and early 1990s, many enterprises became increasingly concerned that civil lawsuits were too expensive, too slow, and too cumbersome.21) This concern led to the growing use of mechanisms for alternative dispute resolution (ADR), such as mediation and arbitration. 'Alternative' dispute resolution is usually considered to be an effective substitute to litigation because it has many advantages, such as being generally less time-consuming and costly. As a result, ADR techniques (including negotiation, conciliation, and arbitration), once seldom used to resolve disputes, are employed with increasing frequency, in both IP disputes and in many other fields. Table 2 provides a comparison of these four methods for resolving disputes (litigation, negotiation, conciliation, and arbitration), and the following text provides detailed descriptions of each.

2023 was an eventful year for the patent world. The USPTO sought comments on the ANPRM and Patent Eligibility Restoration Act. The Unified Patent Court (UPC) launched. Pressure mounted in the EU to create a SEP commission. Despite the implemented changes or those proposed, litigation levels remained constant. IP Edge continues to be notably absent, but others, like Jeffrey M. Gross and Intellectual Ventures, have increased their assertions.

Highlights:

NEW YORK, April 26, 2024 /PRNewswire/ -- A newly released study from Marcum LLP reveals surprising trends in two decades of patent litigation, shedding light on unexpected patterns that counter the steady increase in patents granted by the U.S. Patent and Trademark Office. The 2024 Marcum Patent Litigation Study examines the decline in patent infringement lawsuits, median damage awards, the impact of court decisions on permanent injunctions, and shifting legal venue preferences, providing strategic insight for business and legal professionals.

Key Findings:

The first graph in the report clearly dispels the notion that patent litigation is excessive. It shows the trends over time in the number of patent grants and the number of patent infringement complaints filed in U.S. district courts. As seen in the graph, there is a sharp increase in the number of complaints filed after 2011 due to the anti-joinder provisions of the America Invents Act (AIA). As astute observers of the U.S. patent system understand, this increase in complaints does not represent new disputes but merely a separation of defendants into individual lawsuits thereby mechanically increasing the number of complaints. Therefore, the decline in complaints observed after 2013 is more impressive than it appears as the decline would have been even greater were it not for the anti-joinder provision. Even still, complaints are only about a third higher than they were in the period leading up to the AIA. Furthermore, patent infringement complaints as a share of granted patents is low and is also declining. Marcum reports this share averaged 1.7% from 2013 to 2017 and is less than 1% today.

Dec 2 (Reuters) - Expectations of a massive federal court case backlog brought on by courthouse closures and other COVID-19 pandemic-related disruptions did not come to fruition thanks to a decline in arrests and newly-filed lawsuits, according to a new study.

The Federal Judicial Center, the federal judiciary's research arm, in a report, opens new tab released this week confirmed that the pandemic led to a nationwide slowdown in criminal and civil cases as public health concerns delayed trials.

This law-centric orientation is strikingly different from that of most Americans, despite popular claims about their litigiousness. 8 Most individuals never even identify the civil legal problems they experience as "legal." Only a tiny minority will ever seek legal advice in response to a problem, and most are more likely to do nothing than to file a lawsuit. Decades of empirical scholarship have confirmed that despite the prevalence of civil legal problems in everyday life, there is remarkably little recourse to formal law.

Footnote 8: