Overview
During the 2024 IP Outlook webinar, Sarah Bro, Jason Leonard, Shane Nichols and Brian Oaks discussed the latest trends affecting patent, trademark, copyright and trade secret holders.
Top takeaways included:
- What the Inflation Reduction Act of 2022 (IRA) means for drug prices: The IRA requires price negotiations with the US Department of Health and Human Services for selected drugs sold to Medicare. The drugs are chosen by the Centers for Medicare & Medicaid Services from the top 50 drugs by total annual spend for Medicare. IRA negotiations are technically “voluntary,” but companies that choose to not participate will have an excise tax of up to 95% of a product’s US sales placed on the selected drug. Notably, there is ongoing Fifth Amendment and First Amendment litigation regarding the validity of the IRA price negotiations. The IRA is expected to impact the prices of drugs and could potentially result in less money spent on research and development by pharmaceutical companies.
- Copyright authorship and infringement may be impacted by artificial intelligence (AI): For material to be copyrightable, it must have some form of human creativity, and copyright applicants have a duty to disclose when works have an appreciable amount of AI-generated material. Additionally, new arguments are being made that the AI training process may infringe the works upon which the AI is trained. While litigation in this area is ongoing, it remains an open question as to whether the AI training is fair use or some form of infringement—whether direct or vicarious.
- Rights to publicity and the new NO FAKES Act: A bipartisan proposal was put forward to protect the name, image and likeness rights of individuals from generative AI. The NO FAKES Act aims to hold AI owners and platforms liable for producing authorized digital replicas of an individual. If the NO FAKES Act is implemented, it will provide stronger protections for individuals against ever-growing generative AI content.
- Trademark litigation in 2023 may predict trademark protection trends for 2024: In Jack Daniel’s v. VIP Products, the Supreme Court of the United States found that the Rogers v. Grimaldi test does not apply if the trademark use in relation to a creative work is used as a source identifier. This holding was cited by the US Court of Appeals for the Second Circuit in upholding a temporary restraining order against MSCHF Product Studio, which created a shoe spoofing an iconic pair created by Vans. Companies thus need to be aware that using a trademark as a source identifier, even in a creative work, will not excuse infringement.
- The Unified Patent Court (UPC) shows promise while newly introduced legislation may impact Patent Trial & Appeal Board (PTAB) processes and the standard for patent eligibility: The newly introduced Patent Eligibility Restoration Act of 2023 (PERA) would remove all judicially created exceptions to patent eligibility and eliminate Sections 102, 103 and 112 from the patent eligibility analysis. Further, the Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act was recently introduced to reform the PTAB by lessening its ability to invalidate patents and to reduce duplicate litigation. Lastly, since the UPC has been introduced, preliminary injunction requests have been favorable for patentees and have been granted on a quick timeline. PERA, the PREVAIL Act and the UPC are helpful to patent owners and should be considered in 2024.
- Trade secret protections remain important for companies: Trade secret identification remains a hot button issue in misappropriation litigation, both at the pleadings stage and thereafter. The US Department of Justice is increasingly focused on the criminal prosecution of trade secret theft, particularly those committed by foreign actors. Trade secret owners will need to seek protection from other agreements if the Federal Trade Commission follows through on its proposed rule to ban noncompete agreements.
