The past ten years have seen amazing advances in technology and the next ten promise even more. How has the law kept up to ensure intellectual property rights are adequately protected and what are some major driving forces that will shape IP Law over the next decade.
- Globalization. With the rise of e-commerce and the Internet, falling borders and widening markets, businesses are now almost instantly global. No matter where a business is located, it must think beyond its borders and where its customers are and must take steps to protect their intellectual property across national boundaries. While only a select few businesses needed to worry about global IP protection during the 2000s, by 2020 the issue has become far more generally applicable. This has required businesses and their IP counsel to consider global issues at all phases of IP development and to devise appropriate global protection strategies.
- The Leahy-Smith America Invents Act (AIA). This 2011 overhaul to the United States Patent Act altered the long-standing US rule that the “first to invent” had superior rights to a “first to file” rule. This significant change brought the US patent system in step with the majority global rule. The AIA implemented other changes in the patent system, but the “first to file” change was most significant and just one of several that updated an antiquated statutory regime.
- IP as a Business Asset. For decades, the value of a business was primarily represented by its tangible assets — property, equipment, inventories, etc. This has changed, however, and intangible assets, specifically intellectual property assets, now account for significant portions of business valuation. Indeed, according to the IP-oriented merchant bank Ocean Tomo over 84% of the value of the S&P 500 in 2015 was represented by intangible assets. Further, the USPTO has reported that in 2014, “IP intensive industries” accounted for approximately one third of US GDP. With intellectual property becoming such a major component of the value of a business and such a significant element in our national economy during the past decade, businesses have had to adapt and become much more proactive to protect those assets.
- Alice. In Alice Corporation v. CLS Bank International, the Supreme Court ruled that merely applying an abstract idea on a computer is not patent eligible. What this effectively meant was that computer software programs that simply took abstract ideas—like hedging currencies—and implemented those ideas electronically could not be protected by the patent laws. This led to invalidation of a significant number of software patents and made it extremely difficult for software designers to patent their software. Designers had to react by resulting to different means to protect their inventions. While very few software patents have been issued since Alice, courts are beginning to interpret the decision in ways that pave the way for at least some wider availability of patent protection for software.
2020 and Beyond
- Globalization. The globalization trend that was so forceful in the past decade will continue. Borders are becoming more transparent and businesses are essentially instantly global via the Internet. At the same time, Intellectual Property protection, with few exceptions, remains highly territorial. Will continued globalization of the economy lead to more globally recognized Intellectual Property rights?
- Artificial Intelligence (“AI”). AI will have two significant impacts on Intellectual Property over the next decade. First, as a technology tool, AI and big data mining technologies will help businesses value, protect and manage their IP assets. Even now there are technologies available now that analyze images and content on websites to locate infringement and software that helps value IP assets, manage costs and streamline protection efforts. Technologies like this will become more prevalent providing IP owners with more and stronger tools to use to protect their assets. At the same time, AI software and systems will create new and novel IP issues themselves. As systems become more sophisticated and begin developing their own potentially protectable intellectual property, how will the current legal system adapt? Can machine-generated inventions be protected or, like the famous monkey selfie, can only human-generated inventions garner IP protection?
- Copyright Expiration and Public Domain. Copyright provides the creator of a work the right to reproduce that work and prevent others from doing so. When a copyright expires, the work enters Public Domain, where the public owns the work and it can be used, reproduced or displayed by anyone. In 1998, with the backing of powerhouses like Disney, the Sonny Bono Copyright Extension Act was enacted which extended copyright protection for works made in 1923 or later. The extension prevented thousands of works from entering public domain. Indeed, no copyrighted work entered public domain since 1998. However, the Sonny Bono extensions are beginning to expire and for the first time in 20 years works are beginning to enter the public domain. Unless additional extensions are granted by Congress, iconic works (including Disney’s Steamboat Willie and other shorts) will become public domain. Undoubtedly, businesses that rely on older works, such as Disney and other media outlets, will push for further extensions. What happens with this will impact public accessibility to copyrighted materials for potentially many years.
- Trademark depletion? In 2010, 284,560 trademark applications were filed with the USPTO. In 2019, that number increased almost 70% to nearly 480,000 applications. For the entire decade, almost 3.75 million Federal trademark applications were filed in the United States, which was up over 30% from the number of filings during the 2000-2010 period. Of course, these trends are global. This has led to an increasingly crowded trademark field. It is becoming much more difficult for businesses to find marks that are clear, especially when global clearance is necessary. The challenge facing businesses, and their trademark counsel, will be to come up with novel strategies and arguments to obtain trademark protection in the first instance and to vigilantly protect trademark assets from encroachment by others.
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