Thursday, March 22, 2018

Songwriters Collect Big Against Music Streaming Services

After a massive dispute, streaming services will now be required to pay more for the music they play. The Copyright Royalty Board ruled to increase royalty payments to songwriters and music publishers from music streaming companies by 43.8 percent (they go into effect for interactive streaming and limited download services for the years 2018-2022). This jump is the biggest rate increase to date. This decision will require streaming services to pay 15.1 percent of their revenue to songwriters and publishers (up from 10.5 percent). 

The action involved songwriters and music publishers against five large technology companies, who were seeking to reduce the low rate of royalties they currently pay to songwriters for using their music on their streaming services. The ruling affects only the mechanical license, which includes albums, CDs and downloads. The ruling also instigates a late fee, which means streaming companies must pay their royalty rates on time or face an 18 percent interest fee annually. Before this legislation, artists and record labels were left to create their own deals with streaming services, and oftentimes, they were limited by a content cost cap or a low percentage. 
This decision was largely influenced by upcoming federal legislation known as the Music Modernization Act, which seeks to overhaul the digital mechanical licensing process.

Tuesday, March 13, 2018

Patent Tuesdays and Application Thursdays: Understanding Patent Office Publications

The bargain envisioned in the United States Constitution is that inventors disclose how to practice an invention, making the knowledge available to the world, in exchange for a time-limited monopoly.  Such a disclosure would be useless if it were not made available to the public.  Similarly, it is common for people reviewing an issued patent to ignore the "prosecution history" -- even though the prosecution history often lays out weaknesses in the claims or, more frequently, involves concessions made by the inventor as part of getting the patent issued.
For example, a claim that says "We do X in conjunction with widgets A, B, and C" may have as part of the prosecution history a document where the inventor's lawyer states something like "in order to overcome the cited art, we clarify in these claims that X must be directly done using widgets A, B, and C".  Such a statement would limit or eliminate the ability to argue that "in conjunction with" does not require direct use, so the claim covers any device that involves A, B and C where C is present but X is done without C's direct use.
This kind of limiting effect of the prosecution history is sometimes referred to as "prosecution estoppel", but leaving aside the Latin words and legalize really means "you can't say the claims mean one thing during prosecution of the patent and a different thing after issuance".

To find patents, applications, prosecution history, and the name of the current owners, one needs only an internet connected device.

To find issued patents, we can search the original source at the US Patent and Trademark Office ("USPTO") by visiting  New patents issue at midnight Eastern time every Tuesday (so Monday night at 9 pm on the West Coast).  It is not unusual to have data mining operations hitting the USPTO's servers hard right after patent issuance happens so you may need to be patient in trying to do that search.  The other source for issued patents is, a site that allows you to search for patents that are several weeks to several months old or older.  Of course, Google's site allows you to download an actual image of the issued patent whereas the USPTO's site requires you to download it page by page (and let's be serious, nobody is downloading a 50 page patent that way).  There are services that allow you to do so, though, such as, a site that allows downloads as soon as the patent issues.

Similar resources exist for pending applications.  Patent applications are published at midnight Eastern time on Thursday (9 pm Wednesday night on the West Coast).  The USPTO has a search facility at  If you don't need the most up to date list of patent applications, you can use  Note that the same issues exist regarding how busy the servers get right after publication happens.

If you know how to program PERL, I've included source code at the end of the article that allows you to perform your own conversion of a patent or patent application into a single PDF.

To find the owner of a patent or patent  application, one can access the patent assignments database.  There are a lot of legal terms related to assignments ("bonafide purchaser for value", anyone?), but the basic things to remember are:

(1) The USPTO has errors in the assignments database. Some of these are data entry or other errors by the USPTO.  Others are errors by lawyers for other inventors in entering data.  Either way, you'll want to review the underlying assignment documents before buying or licensing a patent.

(2) Assignments should be recorded.  If an assignment is not recorded, the last recorded owner of the patent (or if no assignment is recorded, the inventor or applicant) can be (pretty) safely assumed to have the right to sell or license the patent unless the buyer or licensee knows that there has been another assignment that wasn't recorded.  Assignments that happen but aren't recorded can create what is known in the art as "a horrible mess that can and probably does cost a fortune to straighten out, and sometimes can't be straightened out".

(3) Assignment obligations are subject to state law.  What this means is that if the statute of limitations on a written contract is 6 years and you have a contract that says "I agree that I will assign my patent to you", you have only until the statute of limitations runs out to compel such an assignment.  After that passes, you are out of luck.  See Stanford v Roche, 563 U.S. 776 (2011) or the discussion about it on Patently-O.  Prior to the Stanford case it was pretty common to see contract language that said "I agree I will assign ...".  After the Stanford case, contracts were rewritten across many industries to say "I shall and hereby do assign ...".  It is quite possible that companies have tried to circumvent this case (or simply are unaware of it), leading them to record a contract where an assignment is promised.  Such a filing is unlikely to create an effective assignment.  The bottom line is you should probably have a lawyer look at the assignment history of the patent before assuming that you know the identity of the current owner.

Finally, we come to the file wrapper.  After navigating a somewhat annoying CAPTCHA, allows you to search for the prosecution history of patents and pending patents.

Let's walk through the prosecution history for a drug patent.  One application number in that family is 07/882,988.  We visit and search for that application number:

When you hit search, you may discover one of the dirty secrets about the US patent office: They are using some very outdated technology and just can't keep up with demand for access to prosecution histories.  As a result, you may get an error message saying it isn't available for that application, that it is too busy, that there is a database error, etc.  These error messages are almost always transient and resolve within minutes (sometimes) or hours.

Having run the search (and been lucky enough that the system returned data instead of an error), we get this result:

The fields on the "Application Data" tab are pretty self-explanatory.

We next hit the "Transaction History" tab. 

Transaction history tells you (almost) everything that has happened during the life of the application.  In this case, we can see that there was FDA involvement, the issue notification was sent 8/31/1993, the patent term extension certificate issued 7/11/2002, etc.

A list is fine, but how do we find the referenced documents?  Easy -- we hit the "Image File Wrapper" tab.  If we hit checkbox next to the "PDF" button and then hit the PDF button, it will generate a single PDF with the entire prosecution history in it.  You can download the history in a single file this way.

Critically, you should note that the status on the "Application Data" tab, the most recent status in the "Transaction History" tab and the latest in the "Image File Wrapper" tab sometimes don't match.  It is not uncommon, for example, to see "Issue Notification" on the transaction history tab, a "-" in the status field on the "Application Data" tab, and no reference to an issue notification in the Image File Wrapper tab.  Since issue notices are handed down on Wednesdays, this is a reproducible bug (although it manifests in situations other than issue notices as well).  It is important to review all three tabs to be sure you know the actual status of the patent application.

To find if there are other applications or issued patents in the family, we hit the "Continuity Data" tab.

From that tab, we can see that the issued patent has two children and an abandoned (non-patented) parent.  Why was the parent abandoned?  Perhaps the examiner cited a reference in that application that can be used to invalidate some of the claims in the children.  Perhaps the company hoped to get a different examiner.  To figure out what is really going on, you will need to review the prosecution history of the parent and children applications.

The "Foreign Priority" tab often does not appear as there is no foreign priority claim.  If there is one, it can be found under that tab (although again, read the file wrapper as there is no guarantee that the data on foreign priority was entered correctly).

The "Fees" tab takes you to the maintenance fee page.  The "Published Documents" tab takes you to the text-formatted published applications or patents (the same ones we showed you how to find earlier in the article).

"Address & Attorney/Agent" is self-explanatory.

The "Assignments" tab is another way to approach finding assignments.

Finally, the "Display References" tab is where publications referenced in the file history can be found (but they can often also be found in the Image File Wrapper tab).

In no way is this an endorsement of trying to work your way through a legal decision on patents yourself.  Enforcing, purchasing, licensing, challenging or otherwise interacting with patents is complex and a lawyer's help is well worth the investment.  Reading the file history, however, is a great way to make sure your time with the lawyer is spent productively.

PERL code to convert patent applications or issued patents to a PDF (written on Windows, not tested on Linux or Mac):

use strict;

use LWP::UserAgent;
use PDF::API2;
use List::Util qw( reduce );
unless (-d "C:\\cgi\\tmp") {
system("md C:\\cgi\\tmp")

my($username)=getlogin || getpwuid($<);


unless (length($patnum)>2) {
print "Enter patent number:";

$patnum=~ s/\,//g;
unless ( ($patnum=~ m/^\d\d\d\d\d\d\d$/) || ($patnum=~ m/^\d\d\d\d\d\d\d\d$/) ) {
print "$patnum is not a patent number";
print "looking at patent $patnum\n";
$urlbase=~ s/7777777/$patnum/g;
if ($result=~m/^error/i) {
print "Error on try of $urlbase\nGot $result";
$result=~ m/\<embed src\=\"(http\:\/\/\/\d\d\/\d\d\d\/\d\d\d\/)1.pdf"/i;
print "Found $base\n";
while($going > 0) {
my($path)=$basepath . "$patnum" . "_" . $going . ".pdf";
my($base2)=$base . $going . ".pdf";
print $base2 . "\n";
if ($result2=~ m/^error/i) {
if ($going==1) {
print "Got $result2 on trying $base2";
} else {
print "writing $path\n";
print OUT $result2;


# Given two pdfs and a page number, appends the given page of the second pdf to the first pdf
sub append_page_to_pdf {
    my ( $pdf1, $pdf2, $pg ) = @_;
    $pdf1->importpage( $pdf2, $pg );

# Given two pdfs, appends the second to the first.  Closes pdf2
sub merge_2_pdfs {
    my ($pdf1, $pdf2) = @_;
    map &append_page_to_pdf( $pdf1, $pdf2, $_ ), 1..$pdf2->pages;
    return $pdf1;

# does what it says
sub open_pdf {
    my $file = $_[0];
    my $pdf = PDF::API2->open( $file );
    print "Opened pdf ( $file )\n";
    return $pdf;

# reduces merge_2_pdfs over an array of pdfs
sub merge_pdfs {
    my @files = @_;
    my $starting_filename = shift @files;
    my $start_pdf = &open_pdf( $starting_filename );
    my $final_pdf = reduce { &merge_2_pdfs( $a, &open_pdf( $b ) ) } $start_pdf, @files;
    return $final_pdf;

# Get the arguments ie save_name, file1, file2, file3, ...
my $save_name="C:\\users\\" . $username . "\\desktop\\" . "patent" . $patnum . ".pdf";
print "saving to $save_name\n";
my $save = &merge_pdfs( @files );
$save->saveas( $save_name );


sub grab {
# create a UserAgent
my ($agent_name)="PPMOD-Agent/LWP";
$agent_name="Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; AskTB5.6";
my ($ua) = LWP::UserAgent->new($agent_name);

# and a request object
my ($request) = HTTP::Request->new(GET => $url);
#add an Accept header
$request->header(Accept => 'text/html');
$request->header(Accept => '*/*');

#make the request and print the result
my ($response) = $ua->request($request);

if ($response->is_success) {
return (($response->content));
} else {
return ( "Error: " . $response->status_line . "\n" );

Wednesday, March 7, 2018

The Benefits of Licensing Agreements for IP Owners

          There are generally two ways to exploit the value of intellectual property rights: use the property yourself or transfer the rights to someone else to use.  A transfer of rights – whether in the form of an assignment or license – is often an attractive option for IP owners since it is not always possible or practical for an owner to put their intellectual property to use themselves. 

If a total and unrestricted transfer is made of the rights, then the transfer is referred to as an “assignment” or “sale.”  If fewer than all the rights are transferred, then the transfer is called a “license.”  In an IP licensing agreement, the owner of intellectual property (licensor) grants permission for another (licensee) to use the property, subject to the terms of the agreement.  In exchange for permission to use the IP, the licensee pays the licensor an agreed amount of money, typically in the form of a royalty.  A licensing agreement can have tremendous benefits for licensors. 
For one, licensing to an already established company can allow an IP owner to avoid the manufacturing, marketing, and distribution costs associated with getting their IP into the market.  Additionally, licensing to an already established company may allow a licensor to penetrate the market much sooner.  The reality is that many IP owners have valuable ideas but either lack the methods, resources, or know-how to build their IP into a profitable business, or decide to remain exclusively a creator or inventor.  The utility of licensing is that it allows a licensor to partner with a licensee to monetize the licensor’s IP in a way that would not be possible if the licensor had to do everything on their own.  
Unlike an assignment or sale, a licensing agreement can be structured to allow for the return of the rights should the deal fail to live up to the licensor’s expectations.  Major advantages of a license also include the ability to split rights geographically (wherein a licensee's rights are limited to a specific region) and the ability to split rights temporally (e.g., granting an exclusive license for 5 years after which the license becomes non-exclusive).  Also, a license allows an IP owner to grant rights to multiple licensors, whereas an assignment transfers the rights to a single party subject to any existing licenses.  Finally, an IP owner who enters into an assignment gives up all rights to any future profit derived from the IP, subject to any profit sharing or royalty provisions.
While licensing agreements have many advantages, a poorly drafted one can lead to unexpected troubles.  Moreover, because IP licensing agreements tend to be complex documents, many important components are routinely overlooked by inexperienced drafters.  An article on some of the most overlooked components in IP licensing agreements is forthcoming. 
Authored by Brandon Hamparzoomian

Thursday, March 1, 2018

Quick Look: Fair Use Does Not Allow News Clipping Services to Send Ten Minute Long Videos to Customers

This is a Second Circuit opinion, so it does not directly cover California.  However, it will be persuasive when the Ninth Circuit, which covers California, addresses similar issues.  In short, the case is titled Fox News v. TVEyes, Inc., and holds that while it is fair use to allow searching of copyrighted material, actually providing a significant amount of that material (in this case, 10 minute long clips) is copyright infringement.

From the text of the case:
This appeal shares features with our decision in Authors Guild v. Google,
Inc., 804 F.3d 202 (2d Cir. 2015) (“Google Books”).    That case held that Google’s
creation of a text‐searchable database of millions of books (including books under
copyright) was a fair use because Google’s service was “transformative” and
because integral features protected the rights of copyright holders.    However, we
cautioned that the case “test[ed] the boundaries of fair use.”    Google Books, 804
F.3d at 206.    
We conclude that defendant TVEyes has exceeded those bounds. 
TVEyes’s re‐distribution of Fox’s audiovisual content serves a
transformative purpose in that it enables TVEyes’s clients to isolate from the vast
corpus of Fox’s content the material that is responsive to their interests, and to
access that material in a convenient manner.    But because that re‐distribution
makes available virtually all of Fox’s copyrighted audiovisual content‐‐including
all of the Fox content that TVEyes’s clients wish to see and hear‐‐and because it
deprives Fox of revenue that properly belongs to the copyright holder, TVEyes has
failed to show that the product it offers to its clients can be justified as a fair use

The bottom line is that fair use is complicated, and simply hoping you're ok or that you won't be noticed is no substitute for a proper review and analysis by skilled copyright counsel.

It also raises the question of whether a service that has been around for decades -- namely newspaper clipping  -- is copyright infringement.  Those typically function by searching major newspapers for specific terms, such as a name.  When articles are found, they are copied and sent to the client.  It strikes me that an astute copyright holding newspaper could make good money bringing such suits, taking advantage of the large statutory damages available for infringement.

Tuesday, February 27, 2018

Quick look: Sovereign Immunity Does Not Prevent Post-Grant Review Proceedings

Patent owners have long complained that the Post-Grant Review Proceedings ("PGR") created in the America Invents Act tilt strongly in favor of invalidating patents.  The PGR procedures are so effective at destroying patent rights that the former Chief Judge of the Federal Circuit Court of Appeals has called the administrative panels deciding PGRs "death squads destroying property rights." Indeed, patent valuations have cratered in response.

Allergan decided that the best chance of protecting the fruits of its enormous investment in innovation was to assign some of its patents to a Native American tribe.  In Mylan and Teva v. St. Regis Mohawk Tribe, the Patent Trial and Appeal Board held that PGR is the type of proceeding to which sovereign immunity does not apply.

Given the enormous potential value of the patents at issue, it is likely that this case will end up at the Federal Circuit and, potentially, the U.S. Supreme Court.  At the moment, however, the complications introduced by assigning patents to sovereign entities seem pretty high compared to the likely benefits (or lack of benefits).

Stay tuned.  In the meantime, it could all become moot if the PGR system is held to be unconstitutional in a pending case expected to be decided in the coming months.

Thursday, February 22, 2018


Some software, such as Oracle and SaaP, is so complex that companies hire consulting firms to program and maintain the software.  A question arises as to whether a maintenance company violates the software license agreement and copyright if the maintenance company copies the software in order to provide maintenance.  The short answer is yes, according to the 9th Circuit’s recent decision in Oracle USA Inc. v. Rimini Street Inc.

Rimini provides software support for Oracle products.  In providing maintenance, Rimini used a copy of an Oracle update obtained by one of its customers to provide services to other customers.  Oracle sued Rimini Street for copyright infringement and related claims.  The jury found in favor of Oracle and entered judgment against Rimini under California’s Unfair Competition Law for roughly $50 million for improperly downloading and using Oracle's copyrighted software (interest, costs, and attorney's fees increased the award up to roughly $120 million).  A permanent injunction was also granted.  Rimini appealed. 
On appeal, two main issues in dispute were analyzed: Whether Rimini copied Oracle’s software in a manner that infringed on Oracle’s copyright and whether Oracle was misusing its copyright to prevent competition for third party maintenance.  While it was undisputed that Rimini used the software to develop and test updates for its own customers (Oracle’s licensees were entitled to hire Rimini to perform work for them), Rimini would not restrict its use of the update for its customer with a lawful Oracle license.  Instead, Rimini would also use the software to provide updates to some of its existing customers (without lawful licenses) or for unknown or future customers (rather than restricting copying to work for that particular customer).  The court found that this “cross-use” amounted to copyright misuse and Rimini was acting in excess of the scope of the licenses held by its customers.  More simply stated, the copying of software should have been restricted to work only for that particular customer. 

As to Rimini’s contention that Oracle was misusing its copyright to prevent competition in the aftermarket for third party maintenance, Rimini claimed that the copyright misuse doctrine prohibits copyright holders from leveraging their monopoly to allow control over areas outside the monopoly, and here, Oracle was stifling competition.  The court rejected this argument, concluding Oracle did nothing wrong by requiring third party maintenance vendors to comply with their own copyrights.

This ruling is an excellent reminder to third party software vendors to be cautious of whether their proposed services run afoul of the software owner/developer’s copyright interests.  Every company should take steps to assure that the software it is using is properly licensed and that updates and maintenance are provided using properly licensed products.

Authored by Jennifer T. Poochigian