- On February 28, C4IP joined other organizations in co-hosting a Welcome Reception for the 118th United States Congress in collaboration with the Creative Rights Caucus.
- On February 24, C4IP co-chair Andrei Iancu published an opinion essay in Bloomberg Law arguing that AbbVie’s development of Humira demonstrates that America’s patent system encourages innovation and spurs competition.
- On February 23, C4IP Executive Director Frank Cullen published an opinion essay in The Hill discussing the need for the House Select Committee on China to investigate Chinese IP theft.
- On February 14, C4IP co-chairs Andrei Iancu and David Kappos published an opinion essay in the Pittsburgh Post-Gazette discussing U.S.-China competition and the importance of strong IP rights in maintaining U.S. competitiveness.
- On February 8, C4IP board member Judge Paul Michel (Ret.) coauthored an opinion essay in RealClearPolicy discussing the importance of USPTO’s “Fintiv” rules.
- On February 6, C4IP Executive Director Frank Cullen published two blog posts. The first details how music piracy harms the economy; the second dispels the myth that America’s patent system is broken.
- On February 2, C4IP co-chair David Kappos discussed C4IP’s response to the USPTO’s RFC on patent rights with Inside Health Policy.
- On February 2, C4IP co-chair David Kappos was featured in an IP Watchdog article discussing the need for the USPTO to be judicious in the questions it poses to the public or risk destabilizing effects on the patent system.
- On January 31, C4IP submitted a response to the USPTO RFC on Initiatives to Ensure the Robustness and Reliability of Patent Rights.
- On January 20, C4IP co-chair Andrei Iancu joined host Patrick Moorhead to discuss all things patents on an episode of the Moor Insights & Strategy Insider Podcast. Listen here.
- ICYMI: C4IP board member Judge Kathleen O’Malley (Ret.) recently spoke about the importance of protecting IP and expanding the U.S. innovation ecosystem to include more women entrepreneurs with the USPTO’s Empowering Women’s Entrepreneurship (WE).
- USPTO Extends Comment Deadline for RFC on Continuation and Other Patent Practices: USPTO announced that it is extending the comment period again for the Request for Comments (RFC) on proposed initiatives aimed at “bolstering the robustness and reliability of U.S. patents.” (USPTO, 02/14)
- USPTO Publishes RFC on Artificial Intelligence: The USPTO announced that it is seeking public comments on artificial intelligence (AI) and inventorship. In the RFC published February 14, the agency noted that “in order to foster and promote AI-enabled innovation, the USPTO requests further stakeholder feedback on the current state of AI technology in the invention creation process and on how to address inventions created with significant AI contributions.” Comments are due by May 15. (IPWatchdog; Federal Register, 02/14).
- New Report Shows that Pharma Industry Remains Leader of Innovative Companies: The newly published “Innovation Momentum 2023: The Global Top 100” report — supported by analysis from LexisNexis® PatentSight® — revealed this year’s top 100 innovators. The list captures companies with groundbreaking patent-protected developments; “for the second year in a row, the pharmaceutical industry leads with the number of companies present.” (IP Watchdog, 02/04).
Claim: During his State of the Union address, President Biden lauded the Federal Trade Commission’s (FTC) recent proposal to ban all non-compete agreements — which prevent employees who leave jobs from working for rival firms for a period of time — as a positive step taken to “restore the dignity of work.” He claimed that, under the current agreements, “a cashier at a burger place can’t cross the street to take the same job at another burger place to make a couple bucks more.”
Correction: The FTC’s proposed rule could harm every American worker by stunting job growth and curbing research and development investment across U.S. industries. And it would do so in the name of addressing a “problem” that rarely arises and that the courts already address with efficiency.
Non-compete agreements have been around for hundreds of years and are an essential component of the innovation economy. These agreements are most commonly utilized by high-tech industries for senior-level employees, who work with highly confidential data, formulas, source codes, processes, and other trade secrets. This specialized knowledge acquired on the job — and protection of such knowledge — drives innovation, competition, and economic growth that benefits American workers.
The courts have also long been equipped to handle rare instances of overreach and to prevent agreements from unfairly limiting an American workers’ earning potential or job mobility. Indeed, the courts consistently scrutinize and strike down non-competes over breadth, particularly those covering long periods of time or those seeking protection for alleged “trade secrets” that are readily ascertainable — as in the oft-cited Jimmy John’s case or President Biden’s hypothetical “burger place” example.
Bottom Line: This claim is false.
What’s Happening in Congress:
With the 118th Congress underway, Democratic and Republican lawmakers are weighing legislation to prioritize. Top of mind for those who follow intellectual property policy are:
- The Interagency Patent Coordination and Improvement Act of 2022: In June 2022, Senators Dick Durbin (D-IL), Thom Tillis (R-NC) and Chuck Grassley (R-IA) introduced the Interagency Patent Coordination and Improvement Act of 2022. The bill would create a task force to share patent filing information between USPTO and FDA officials. Given its reach, IP experts caution that Congress should hold off action until both the USPTO’s public comment period and joint USPTO-FDA public listening session on this matter conclude, so that valuable input from key stakeholders can be collected. A version of this bill was recently reintroduced in the 118th Congress.
- Patent Eligibility Restoration Act of 2022: In August 2022, Senator Thom Tillis (R-NC) introduced legislation aimed at restoring patent eligibility for important categories of inventions — including life sciences diagnostics, gene therapies, and artificial intelligence — as well as resolving questions regarding the scope of patent eligibility. Some version of this legislation is expected to be reintroduced in the 118th Congress. C4IP supports this important legislation.
- 118th Congress Organization: The House and Senate finalized the membership and ratios of the respective Judiciary Committees and Subcommittees. Below are the Chairs and Rankings:
- House Judiciary Committee: Jim Jordan (R-OH), Chairman; Jerrold Nadler (D-NY), Ranking Member; Darrell Issa (R-CA), IP Subcommittee Chairman; Hank Johnson (D-GA), IP Subcommittee Ranking Member.
- Senate Judiciary Committee: Richard Durbin (D-IL), Chairman; Lindsey Graham (R-SC), Ranking Member; Chris Coons (D-DE), IP Subcommittee Chairman; Thom Tillis (R-NC), IP Subcommittee Ranking Member.
Inside Look: Digital Piracy
Digital piracy — the illegal download or distribution of copyrighted digital content — continues to be on the rise. A recent report from research firm Muso found that illegal film streaming increased nearly 39% between 2021 and 2022. Meanwhile, website traffic for pirated television content rose by almost 9% over the same period.
This nefarious practice poses a serious threat to creative industries and the innovation economy writ large. After all, copyrights — and other intellectual property rights — provide creators with the incentives needed to pursue bold concepts and push the boundaries of innovation. This not only fosters a more diverse cultural landscape but also drives economic growth and job opportunities.
Digital piracy throws the entire creative ecosystem into disarray. As more people access and share copyrighted material without paying for it, creators cannot be fairly compensated for their work and they cannot afford to pursue creative endeavors. The losses incurred are staggering and economically disruptive. Indeed, it’s estimated that the United States loses nearly $30 billion — and as many as 560,000 jobs — each year to film and television piracy alone.
The proliferation of digital piracy also presents serious risks for consumers. Pirated content is rife with security threats, like malware, that can infect an individual’s devices and compromise their personal data. Indeed, in a consumer alert, the Federal Trade Commission warned that downloading illegal pirated content — on websites or apps — greatly increases the risk of downloading malware that hackers can use to steal credit card numbers and sensitive log-in information.
Industry and government stakeholders alike must work together to safeguard the intellectual property rights of creators and ensure that consumers have access to high-quality content without exposure to malware. There are several steps that can — and should — be taken in pursuit of this aim.
First, the United States Trade Representative (USTR) can limit piracy abroad by improving the enforcement of existing trade agreements. For instance, Mexico must protect against piracy under the United States-Mexico-Canada Trade Agreement (USMCA), but inadequate enforcement allows the practice to run rampant in that country.
Second, U.S. law enforcement agencies have the ability to prosecute criminal organizations involved in digital piracy and take down websites facilitating illegal downloads. At the same time, the television and film industries — along with the government — should strive to increase awareness among consumers about avoiding and reporting pirated content.
Absent these efforts, digital piracy will continue to undermine incentives for innovators to create valued cultural works, as well as the protections necessary for safe consumption of those works.
Celebrating American Innovation
This month, C4IP is recognizing the late inventor and candy company executive who mechanized the process of making marshmallow chicks and was affectionately known as “Father of Peeps.”
Bob Born, American inventor and executive of the Pennsylvania-based Just Born Quality Confections. Bob Born was the son of a Russian immigrant who came to New York in 1909. Born graduated from Lehigh University and then served in the U.S. Navy in World War II as a lieutenant and radar specialist. Later, the Navy sent him to the Massachusetts Institute of Technology and the University of Arizona to pursue graduate studies in math and physics. After graduating, Born applied to medical school and was accepted — but prior to classes starting, he went to work at Just Born and never looked back.
When Just Born acquired Rodda Candy Company in 1953, Born saw an opportunity to enhance the company’s production of its fluffy marshmallow treat — PEEPS®. With the help of an engineer, Born invented a machine that lowered the time it took to make PEEPS® by almost 27 hours.
Born’s legacy lives on as the company continues to use his machine design to produce over 5 million PEEPS® per day and approximately 2 billion per year. Today, Just Born Quality Confections still owns the PEEPS® trademark and employs over 600 associates in the United States and in Canada — most are based at the company’s headquarters and candy factory in Bethlehem, PA.