Patent

Open COVID Pledge: Patents To Be Freed Up To Fight COVID-19

(Left to right: Mark Lemley, Open COVID Pledge's logo, and Tedros Adhanom Ghebreyesus)





In response to the COVID-19 pandemic, a number of universities and companies are coming together to free up patents, to spur the development of vaccines, cures, and other treatments. The initiative, called “Open COVID Pledge,” gives scientist and researchers freedom to explore and utilize other company’s patents to develop treatments without the threat of infringement or the need to obtain licensing agreements.

Specifically, companies that take part in the Open COVID Pledge would allow anyone to use their patents under a royalty free temporary license to develop treatments against COVID-19. As per Mark Lemley, a Stanford Law Professor and one of the founding members of the project, states that “[t]he pledge prevents [companies and individuals] from being sued for things they do during the pandemic. Once things return to normal, we hope companies will work together to come up with commercially reasonable license terms, but they can go back to owning and asserting their IP.”

Medtronic PLC and Smiths Group PLC, have already opened its designs of its ventilators to assist in the shortage of existing ventilators. A number of other companies and universities, such as Intel, Stanford Law School, Montreal Neurological Institute Hospital, etc., have signed up since the pledge went live on April 7, 2020.

Also this week, World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus said he supports a proposal from Costa Rican president Carlos Alvarado and Health Minister Daniel Salas, which would "to create a pool of rights to tests, medicines and vaccines, with free access or licensing on reasonable and affordable terms for all countries."

"We are working with Costa Rica to finalize the details," the director-general said Monday.





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Copyright

The Robin Hood of Books? The “National Emergency Library” Free Distribution of E-Books During COVID-19





The Internet Archive (i.e., a non-profit organization that stores websites and other in digital form) recently launched what it calls the “National Emergency Library.” This library according to its website is “a collection of books that supports emergency remote teaching, research activities, independent scholarship, and intellectual stimulation while universities, schools, training centers, and libraries are closed.”

Specifically, this library has built up a collection of 1.4 million e-books, many of which are still under copyright protection, by manually scanning copies of books it received or purchased onto its website to create an e-book. The library is allowing any person to logon to its website to borrow an e-book without restriction until June 30.





But how is this legally possible? The Internet Archive points to the concept of “controlled digital lending” (CDL) and legal doctrine of “fair use.” CDL is a “method that allows libraries to loan print books to digital patrons in a ‘lend like print’ fashion. Through CDL, libraries use technical controls to ensure a consistent ‘owned-to-loaned’ ratio, meaning the library circulates the exact number of copies of a specific title it owns, regardless of format, putting controls in place to prevent users from redistributing or copying the digitized version.” The doctrine of “fair use” in copyright law could be summed up as any copying of copyrighted material done for a limited and “transformative” purpose, such as to comment upon, criticize, or parody a copyrighted work. Such uses can be done without permission from the copyright owner.

The Internet Archives sums up its legal defense of establishing the National Emergency Library under the concept of CDL and doctrine of fair use by pointing to legal experts and white papers in regards to libraries’ ability to distribute digital copies. Specifically, it points to the “White Paper on Controlled Digital Lending of Library Books” and quotes the following:

Our principal legal argument for controlled digital lending is that fair use— an “equitable rule of reason”—permits libraries to do online what they have always done with physical collections under the first sale doctrine: lend books. The first sale doctrine, codified in Section 109 of the Copyright Act, provides that anyone who legally acquires a copyrighted work from the copyright holder receives the right to sell, display, or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. This is how libraries loan books. Additionally, fair use ultimately asks, “whether the copyright law’s goal of promoting the Progress of Science and useful Arts would be better served by allowing the use than by preventing it.” In this case we believe it would be. Controlled digital lending as we conceive it is premised on the idea that libraries can embrace their traditional lending role to the digital environment. The system we propose maintains the market balance long-recognized by the courts and Congress as between rightsholders and libraries, and makes it possible for libraries to fulfill their “vital function in society” by enabling the lending of books to benefit the general learning, research, and intellectual enrichment of readers by allowing them limited and controlled digital access to materials online.

Google, although not distributing or loaning out free e-books, has similarly made digital collection of books in the past and have won various cases brought against it from authors and publishers.

But regardless of the legal concepts, authors and publishers have come out against the “National Emergency Library” citing that such a free distribution of copyrighted work without their permission constitutes copyright infringement and irreparable financial harm. As per the Authors Guild’s 2018 survey, the median income of those who identified as a full-time author in the United States was $20,300, which is well below the federal poverty line for a family of three or more. Thus, potentially losing income from its copyright license fees may push authors already struggling during the pandemic deeper into debt and poverty.

No cause of action has yet been officially brought against the Internet Achieve at this time.

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Trademark

3M Sues Suing Price Gougers For Trademark Dilution

On Friday (April 10, 2020) 3M Company sued a New Jersey based company, Performance Supply LLC, under federal trademark law for allegedly acting as an authorized vendor for 3M branded N95 respirator masks and offering to sell those masks to New York City officials at prices roughly around 500 -600% over suggested retail price.

Although the respirators offered were not counterfeit products, the lawsuit alleges that Performance Supply misused the 3M trademark by using its trademark and other deceptive tactics to misled state officials into thinking that the company was authorized by 3M to sell those respirators at marked up rates, i.e., acting in a capacity that dilutes 3M’s trademark.

Given the growing COVID-19 pandemic in the United States and abroad, prices of respirators have been driven up as supply struggles to meet demand. In response, 3M has invested capital and resources and has doubled its global output rate to nearly 100 million respirators a month, with goals of doubling its current global annual output of 1.1. billion respirators. To meet demand in United States, the world’s current hot bed for the COVID-19 outbreak, 3M plans to produce and deliver 50 million respirators by June 2020, with additional plans to import 166.5 million respirators from its overseas factories within the next three months.

In its complaint, 3M has stated that despite all of its efforts and capital investments it has decided against increasing prices charged for its 3M respirators due to COVID-19. In fact, 3M has set up efforts to counter fraud and price gouging, such as working with law enforcement and setting up on “3M COVID-19 Fraud hotline” in the united states and Canada that end users and purchasers of 3M products can call for information to help detect fraud and avoid counterfeit products. Despite this, “unsavory characters continue their quests to take advantage of healthcare workers, first responders, and others in a time of need and trade off the fame of the 3M brand and marks.” 3M claims that Performance Supply LLC “is a prime example of this unlawful behavior.”.

Specifically, it alleges that on or about March 30, 2020 Performance Supply LLC sent a Formal Quote to NYC to sell millions of 3M branded N95 respirator respirators priced at 500-600% over 3M’s list price, for an aggregated total price of $45 million. In part of its bidding process, Performance Supply used the 3M logo in its proposal and made several references to 3M to indicate that it was acting as an authorized retailer for 3M. Additionally, in NYC’s “Bid Evaluation Request,” it mistakenly identified Performance Supply LLC as a “vendor” for 3M, which Performance Supply did not correct.

"The mere association of 3M's valuable brand with such shameless price-gouging harms the brand, not to mention its more serious threat to public health agencies that are under strain in the midst of a worldwide pandemic," the company wrote.

3M said in a statement that it seeks injunctive relieve and damages and will donate any damages recovered to COVID-19-related nonprofit organizations.





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Multiple Colors can be Inherently Distinctive When Used on Product Packing

The U.S. Court of Appeals for the Federal Circuit (CAFC) reversed the Trademark Trials and Appeals Board (TTAB) decision in In re Forney Industries, Inc., 127 USPQ2d 1787 (TTAB 2018) that refused to register color marks for multiple colors applied to product packaging and held that “color marks can be inherently distinctive when used on product packing, depending upon the character of the color design.” This is a precedential ruling as the CAFC weaved through the Supreme Court’s opinion on Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000), which held that color alone cannot be inherently distinctive.

Specifically, in this case Forney Industries, Inc., a company that sells accessories and tools for welding and machining, sought to register a mark comprising of the colors "red into yellow with a black banner located near the top as applied to packaging." The TTAB, denied the registration by relying on Wal-Mart and Qualitex in concluding that "'a particular color on a product or its packaging' . . . can never be inherently distinctive and may only be registered on a showing of acquired distinctiveness." More specifically, the TTAB saw "no legal distinction between a mark consisting of a single color and one, such as [Forney’s], consisting of multiple colors without additional elements, e.g., shapes or designs."

The CAFC found that the TTAB "erred in two ways: (1) by concluding that a color-based trade dress mark can never be inherently distinctive without differentiating between product design and product packaging marks; and (2) by concluding (presumably in the alternative) that product packaging marks that employ color cannot be inherently distinctive in the absence of an association with a well-de-fined peripheral shape or border."

In regards to the first point the CAFC found that the Supreme Court has not “gone as far as the . . . [TTAB] did here, where the mark is proposed for product packaging, as distinct from product design.” That is although color alone cannot be inherently distinctive, it may be distinctive when used in conjunction with product packing, “depending upon the character of the color design.” The CAFC stated that other courts have similarly made this distinction. “In considering a mark very similar to the one at issue here, the Tenth Circuit held that “the use of color in product packaging can be inherently distinctive (so that it is unnecessary to show secondary meaning)” in appropriate circumstances.”

As to the second point, the CAFC simply found no explanation in the TTAB’s conclusion that “color may only be inherently distinctive when used in conjunction with a distinctive peripheral shape or border."

The CAFC vacated and remanded the case for the TTAB “to consider, whether, for the uses proposed, Forney’s proposed mark is inherently distinctive under the Seabrook factors, considering the impression created by an overall view of the elements claimed.”

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