1. COPYRIGHT CLAIMS AGAINST PATENT FIRMS

2. Steve Gillen Wood Herron & Evans LLP 2700 Carew Tower 441 Vine Street Cincinnati, OH 45202 513.241.2324 ext 470 sgillen@whe-law.com Copyright © 2012 by Steve Gillen. All rights reserved. The opinions expressed herein are those of the author, given the information available to him at this time, and not necessarily the opinions of Wood Herron & Evans LLP or of any of its clients. The author reserves the right to change his opinion in response to additional information as it may become known to him. sgillen@whe-law.com

3. The Back Story STM publishing (scientific/technical/medical) is a $15B market 4 publishers control more than half of it

4. The Back Story STM is one of the more profitable segments of publishing But as pressure on library budgets increases, margins are shrinking

5. STM Publishers vs. Research Libraries

6. Increasing Pressure on STM Revenue Over the Past 10 Years

7. The Back Story STM publishers have responded by: – migrating publications from print to digital (where they are licensed rather than sold so that publishers have more control) –and by bundling (in 2011, Elsevier forced Purdue U. to take an all or nothing package for a $2.9M one-year license fee); Harvard’s annual cost is $3.75MM and has grown 145% in last 6 years –Lobbying for legislation Research Works Act in 2012 –and, evidently, by casting about for new revenue sources...

8. Enter: the patent prosecutors... Patent applicants have a duty to disclose to the PTO all information known to the applicant to be material to patentability 37 CFR 1.56 They fulfill this duty by submitting Information Disclosure Statements (IDS’s) 37 CFR 1.97 Some of the relevant info is non-patent-literature (NPL) and some of this includes copyrighted journal articles An IDS must include a legible copy of each publication or the relevant portion of same 37 CFR 1.98

9. Enter: the patent prosecutors... Patent prosecution firms complying with IDS obligations on behalf of their clients: –make a copy for their file –make a copy for their client –make a copy to submit to the PTO

10. Enter: the PTO PTO also makes copies of NPL: –when citing the art to an applicant –when providing an official copy of the file wrapper to the public (for a fee)

11. The Lawsuits The plaintiffs: –John Wiley & Sons (Blackwell Publishing is a subsidiary) - $2B/yr business with 57% from its STM side –American Institute of Physics - $74M/yr business (not all of which comes from publishing); 501(c)(3) status (tax preferenced charity)

12. The Lawsuits Lead counsel for both plaintiffs in all 4 lawsuits is Dunnegan & Scileppi of Manhattan –(one 30-year lawyer and four others; they have handled two other cases for Wiley in recent years)

13. The Defendants Feb 29 –Chicago firm of McDonnell Boehnen Hulbert & Berghoff in ND IL –Minneapolis firm of Schwegman Lundberg & Woessner in D MN April 20 –Dallas firm of Winstead PC in ND TX (Blackwell and AIP are plaintiffs in this case) –Overland Park KS firm of Hovey Williams in D KS

14. The Complaints... 7-page, bare-bones, cookie cutter –Δ is identified as a party that claims expertise in IP –One article from each π is cited as having been infringed (with the © registration identified by reg. # but not attached), but the associated patent case is not identified

15. The Complaints... Interestingly... –In ND IL, Wiley is identified as a “United Kingdom corporation with its principal place of business in Chichester, England” (note that UK law does not provide for “corporations”) –In D KS, Wiley is identified as a “New York corporation with its principal place of business in Hoboken, New Jersey” –In D MN, Wiley is identified as a “Delaware corporation with its principal place of business in Hoboken, New Jersey” –In ND TX, Blackwell is “a company registered in England and Wales with its principal place of business in Oxford, England”

16. The responses One answer (Chicago) Two motions to dismiss (Minneapolis and Dallas) One dismissal with prejudice (Kansas)

17. Chicago Rep’d by Kirkland & Ellis In a 3-page “preamble” to its answer, K&E takes the position that MBHB is: –Just doing what it’s always done (and what everybody else does) –Just doing what the PTO requires –π’s seek to introduce a “costly new requirement into this long-standing practice”

18. Chicago Affirmative defenses – –Some you’d expect: non-infringement; fair use; laches; estoppel; waiver; license; first sale; copyright misuse; unclean hands; lack of damages –Some surprises: non-public distribution and display (public display and distribution not really part of the claim asserted); Noerr- Pennington immunity

19. Chicago PTO moved to intervene (mid June); it has subsequently intervened in MN and TX also –Alleging harm to PTO if πs prevail –Motion allowed 2 days later –The next day the PTO filed its answer and counterclaimed for a DJ of non-infringement Πs have challenged PTOs standing Πs have filed amended complaint, tweaked ever so slightly to allege copying not in patent prosecution but in research

20. Minneapolis Rep’d by Robert Clarida and Winthrop & Weinstine –Moved to dismiss arguing failure to plead specific facts in support of claim No © certificate appended to complaint No particular patent application cited Failure to comply with Form 19 to FRCP Failure to plead compliance with SoL –π’s memo in op asserts © not required at pleading stage (but they attach) They alleged copying Distribution to PTO is distribution to the public SoL is affirmative defense

21. Minneapolis Schwegman reply –© cert not adequate because it claims ownership of journal issue only as a collective work (WFH) not ownership of individual articles at issue (and no transfer statement) –This is very interesting (and nuanced because of PRO IP Act 2008)

22. Minneapolis Motion to dismiss denied on 7/2 –Πs have pled sufficient facts –Πs have pled ownership –No requirement to attach reg. cert. –Whether registration only as collective work is sufficient to satisfy 411 requirement can’t be decided at this stage –SoL is an affirmative defense

23. Dallas Vinson & Elkins move to dismiss on both technical and substantive grounds –First, because lawyers have a protected fair use right/legal duty to submit IDS to the PTO and to maintain client files (this actually has some appeal as we are “officers of the court” – quasi public officials with a duty to the system –Second because Blackwell sued on a Wiley-owned © –Third because the IDS was submitted in 2005 (outside the 3-year SoL; though when might this have been discovered?)

24. Dallas MD Memo goes on to tackle fair use head on –Purpose & character quasi judicial nature of PTO proceeding Use as “evidence” – citing cases where copy of accused work introduced to support claim (book by ex-spouse as evidencing unfit character for custody – e.g, some connection between owner of work and party to the dispute) Use is transformative – meaning in this instance that it was used not for research but as prior art (I don’t think this is what we mean by transformative) Not a commercial use or exploitation – used because it is required, not to make a profit (but cf. Kinkos; Basic Books; American Geophysical)

25. Dallas – MD Memo Nature of the work –Factual and evidentiary character (true enough) –Used for factual rather than expressive content (if this were so, paraphrasing would be good enough)

26. Dallas – MD Memo Amount and substantiality – they argue this factor is neutral because they only copied the whole article because they were required to... (really?)

27. Dallas – MD Memo Effect on market or value – –it’s old news; –no market for it; –we paid for it once already (as part of a licensed database - what about breach of contract claims?) –CCC offers blanket or ala carte options; online; cheap; good STM coverage

28. Dallas Πs brief in opposition concedes copies to the PTO and focuses on research copies (Texaco case) Ignores ownership issue (but they have since filed an app to amend ownership) Argues that there are issues of fact on fair use factors

29. Overland Park Rep’d themselves and dismissed with prejudice before answer or other motion

30. PTO Internal Position Paper Addresses use by PTO –Copies for use in examination and copies to applicants when prior art cited against them –Copies to public as part of file histories (for a fee); but not on Public PAIR And use by applicants

31. PTO Internal Position Paper – Fair Use Analysis Purpose and character –Non-commercial, governmental (yes) –Transformative (doubtful)

32. PTO Internal Position Paper – Fair Use Analysis Nature of the work –Published –Fact intensive

33. PTO Internal Position Paper – Fair Use Analysis Amount and substantiality –PTO claims this is neutral –Makes an effort to take only portion relevant and instructs applicants to do the same (but, with a wink and a nod, acknowledging that taking less than the whole is often not an option)

34. PTO Internal Position Paper – Fair Use Analysis Market effect –No market for NPL because it is old, they don’t put it on PAIR, and they have not historically paid for it so there is no active market (what about CCC?)

35. PTO Internal Position Paper – Fair Use Analysis Same analysis for use by applicant –Acknowledging that law firms are for-profit, but arguing that they are not “exploiting” the work but just submitting it –Noting also that since the works have often been initially obtained through licensed access, they have already paid for it once (sound familiar?) –This for submission to the PTO only; they take no position on file copies or client copies