Archive for March, 2010

Who Owns Life, Part 2

Wednesday, March 31st, 2010

A federal judge has invalidated several of Myriad Genetic’s patents on two genes linked to breast and ovarian cancer, in a wide-ranging decision that undercuts the legal basis of potentially all genetic patents.

Approximately 20% of all human genes are patented.

In a 152 page decision delivered Monday, Federal District Court Judge Robert Sweet of the Southern District of New York invalidated portions of seven of Myriad’s patents on the genes BRCA1 and BRCA2 on the grounds that the genes are “products of nature,” and therefore not patentable subject matter under 35 USC Section 101.

Myriad had argued that it had created isolated, purified versions of the genes not found in the human body, so they qualified as “manufactures” or “compositions of matter” under Section 101, and were not products of nature.

Judge Sweet disagreed, ruling that, “purification of a product of nature, without more, cannot transform it into patentable subject matter. Rather, the purified product must possess ‘markedly different characteristics’ in order to satisfy the requirements of Section 101.” And the purified forms of the genes were not markedly different from the native forms, ruled the judge, if properly viewed from the perspective of the genes’ information conveying functions, rather than from mere chemical or structural differences– the purified forms are designed to have the same nucleotide sequences as the native genes in order to convey the same genetic information.

However, almost all prior applications for genetic patents claim to meet the Section 101 threshold precisely by identifying a purified form of a human gene. If this ruling survives on appeal, opponents of genetic patents are expected to use it as the basis to challenge thousands of other genetic patents.

The suit was brought by the American Civil Liberties Union on behalf of breast cancer patients and medical researchers, who claimed that Myriad’s patents made detection tests for the genes too expensive (more than $3,000 per test in the United Sates, versus $1,000 in Canada where the tests are not patent-protected), and inhibited further research into new cancer treatments and therapies.

Myriad issued a statement claiming that the decision will not have a great impact on its business, because it struck down portions of only seven of Myriad’s 23 patents on the two genes.

Furthermore, proponents of genetic patents say that Judge Sweet’s opinion badly misinterpreted both the nature of the patented genes, as well as prior case law, and will certainly be overturned on appeal by the patent specialist Court of Appeals for the Federal Circuit.

Judge Sweet’s decision could also be impacted by the Supreme Court’s imminent ruling in In Re Bilksi, which is widely anticipated to recalibrate the definition of “patentable subject matter” for the information age.

The Licensing Law Blog will soon post a preview of the issues at stake in Bilski.

From A Rookie To An All Star: Thanks!

Friday, March 26th, 2010

Nothing makes a rookie athlete’s day more than getting a nod of approval from a grizzled veteran.

So it is with great pride that The Licensing Law Blog got a big nod of approval as smart, funny, and knowing its stuff from one of the all time all star IP bloggers, Ron Coleman of the “Likelihood of Confusion” blog.

“Likelihood of confusion,” of course, is the legal standard for determining whether one trademark infringes another. And “Likelihood of Confusion” is the standard in the legal blogging community for up to the minute, incisive analysis of all things IP. Ron posts more top drawer stuff in one day than we do in one week.

Thanks, Ron!

Who Owns Life?

Friday, March 19th, 2010

Those who are not patent attorneys may be surprised to learn that it is possible to patent the human genetic code.

In fact, approximately 20% of all human genes are patented.

The US Patent and Trademark Office (PTO) has granted patents on genes and their DNA building blocks since the early 1980s, but this practice has recently reentered public awareness due to a lawsuit (Association for Molecular Pathology v. US Patent & Trademark Office) by a breast cancer survivor against Myriad Genetics, a company that has obtained patents on two genes closely associated with increased risk for breast and ovarian cancer, BRCA1 and BRCA2. These patents make Myriad the sole provider of tests to detect those genes, at a cost of over $3,000 per test.

Patents give their owners exclusive rights to use, manufacture, or sell the patented invention for 20 years from filing of the application. In order to qualify for a patent, an invention must be new, useful, and non-obvious to an expert in the field. However, patents cannot be granted on laws of nature or theoretical phenomena, for example the Theory of Relativity. Prior to the 1980s, the PTO considered that life forms were equivalent to the laws of nature, and therefore not patentable subject matter.

However, the Supreme Court ruled in Diamond vs. Chakrabarty (1980) that a scientist could obtain a patent on a lab-created bacterium that could consume oil slicks, on the grounds that the organism did not occur in nature, and therefore was a “manufacture” or “composition of matter” under 35 USC Section 101, and not equivalent to a law of nature. (more…)

Who You Callin’ Milkaholic? Lindsay Lohan’s IP Lawsuit

Friday, March 12th, 2010

Fans of both celebrity train wrecks and intellectual property law got a twofer with the recent news that actress Lindsay Lohan has filed a $100 million lawsuit against online brokerage E*TRADE for running a TV commercial that features a “milkaholic” baby named Lindsay.

The basis of Lohan’s lawsuit is a claim of misappropriation of her rights of publicity. New York law prohibits using, “for advertising purposes…the name, portrait or picture of any living person without having first obtained the written consent of such person….”

In the commercial, the protagonist, a male infant with the swaggering attitude typical of a twentysomething Maxim reader, calls his girlfriend via webcam to apologize for not calling the evening before. E*TRADE Boy freezes in panic when she asks, “And that milkaholic Lindsay wasn’t over?” A female infant pokes her face in front of E*TRADE Boy and asks the camera indignantly, “Milk-a-WHAT?” Lindsay the Baby does not bear any noticeable physical resemblance to Lindsay the Actress (below).

The fact that the E*TRADE commercial does not directly reference Lindsay Lohan is not necessarily fatal to Lohan’s case. In the most famous “misappropriation by allusion” case, Wheel of Fortune hostess Vanna White won a lawsuit against Samsung for a commercial in which a robot turned letters on a Wheel of Fortune-type crossword board. Also: Johnny Carson won against a portable toilet company which sold a “Here’s Johnny” model; Bette Midler won against Ford for a commercial with a sound-alike singer; and rap group the Fat Boys won against Miller Beer for a commercial with sound-alike rappers.

But pause for a moment to think about the logic that Lohan’s lawyer needs to argue to win:

1) “Milkaholic” really means “alcoholic” (so far, so good)

2) Any reference to a boyfriend stealing alcoholic named Lindsay can lead only to the conclusion that the ad is about Lindsay Lohan (stop the music!)

Even if she is right, does Lindsay Lohan really want her lawyer to make that argument at this point in whatever is left of her career?

Now, of course, after my former client Paris Hilton and her friends famously referred to Lindsay Lohan as “Fire Crotch,” if the E*TRADE commercial had mentioned Baby Lindsay’s diaper rash, THAT would be a case worth fighting.

Sports Licensing Corner: Licensing Revolution on the Campuses?

Monday, March 8th, 2010

An antitrust lawsuit brought by a former UCLA basketball star has the potential to upend the cozy, lucrative world of collegiate sports licensing, and even to make fundamental changes to the amateur nature of college sports.

Collegiate licensing is a $4 billion a year industry, about 80% of which is handled by the Collegiate Licensing Company (“CLC”), official licensing agent to the NCAA and over 200 universities.

One of the foundations of that industry is that college athletes are required to sign documents that relinquish in perpetuity their rights of publicity for college sports-related purposes, as a condition of participating in NCAA-sponsored college athletics. That means the NCAA can, without compensation to the athletes, license their names and images for apparel, video games, broadcasts, and highlight DVDs, long after they have graduated from college.

Ed O’Bannon, a former basketball star at UCLA during the 1990s, said he got angry seeing his highlight clips from 15 years ago being used to promote NCAA broadcasts, so last July he filed a class action lawsuit against the NCAA and CLC in federal District Court in San Francisco on behalf of himself and other former student-athletes.

The nub of O’Bannon’s legal argument is that requiring student athletes to sign away their rights of publicity in perpetuity is a violation of Section 1 of the Sherman Antitrust Act. Section 1 prohibits, “Every contract, combination…, or conspiracy, in restraint of trade or commerce among the several States….”

Agreements among the NCAA, CLC, and NCAA member universities, as well as the students’ relinquishments of their rights of publicity, are obviously “contracts,” so the next question under Section 1 is whether these contracts unreasonably restrain trade in a particular market. The NCAA will probably argue that: 1) the former athletes should not be able to bring an antitrust lawsuit in the first place, because they validly traded their rights of publicity for room, board, and tuition provided under their athletic scholarships; and 2) prohibiting college athletes from receiving payments for their athletic skills preserves the amateur nature of the college game, and therefore promotes, not restrains, competition in the market for college sports and sports products.

O’Bannon is likely to reply that: 1) requiring a college freshman to sign away his intellectual property rights in perpetuity without the presence of an attorney is invalid; and 2) assuming that amateurism by college athletes increases competition in the market for college sports, it is totally irrelevant to former athletes, who are no longer playing in games. O’Bannon argues that the NCAA, by prohibiting the former student-athletes from cutting their own apparel or video game licensing deals, is lessening competition, decreasing innovation, eliminating compensation to former athletes, and increasing prices to college sports fans, in violation of the Sherman Antitrust Act.

Indeed, by limiting their lawsuit to former students, the O’Bannon plaintiffs have considerably strengthened the legal arguments of their case.

The O’Bannon plaintiffs recently survived the defendants’ motion to dismiss the case before trial, but there is plenty of game left to play, sports fans. With so much money at stake, it is likely that no matter which side wins, there will be years of appeals before the matter is finally settled.

But if O’Bannon wins, the NCAA, CLC, and many college athletic departments could take a large financial hit. They all derive substantial revenue from that $4 billion in licensing fees, but the O’Bannon plaintiffs would claim a major (as yet unspecified) chunk as compensation to former student-athletes whose rights of publicity were utilized in licensing deals. In fact, antitrust law allows victorious plaintiffs to triple their damages. And of course the former college athletes would have the right to cut their own licensing deals going forward, independent of the NCAA and their alma maters.

Furthermore, if O’Bannon wins, it is possible that current college athletes might utilize the rationale in any O’Bannon victory to attempt to weaken or throw out the current system of signing their rights of publicity over to the NCAA and CLC. For example, if the court were to rule the waivers were defective because the NCAA failed to advise students that they should seek legal counsel before signing away rights to future compensation for their intellectual property, then current athletes might argue they too should have the right to be represented by counsel in negotiating rights waivers during their college playing careers. Then star college athletes could get embroiled in contract negotiations, just like professional athletes.

Stay tuned, licensing and college sports fans…