Current economic and logistical realities of the COVID-19 pandemic are challenging IP rights holders in new ways. Should the filing strategies companies pursued prior to the onset of the crisis continue? Should enforcement be curtailed or stepped up? How should rights holders approach the acquisition of IP given the economic fallout caused by COVID-19? How might the crisis influence litigation strategies? Here are some observations and key takeaways regarding COVID-19 considerations for IP matters:
- IP Filing: Continue to File First. The USPTO and patent offices around the world are not changing their first-to-file rules in light of COVID-19, so inventors still need to submit their applications as soon as possible to ensure priority over potential competitors. Therefore, filing provisional patent applications in the U.S. remains as important a priority as ever during the crisis, while subsequent deadlines may provide opportunities for extensions, as explained in the second key takeaway, below. Although first to file strategies are not necessarily as important for trademark and copyright protection, there are still advantages to filing as early as possible to secure nationwide rights for a brand or ensure the highest potential damages awards for copyright infringement. Accordingly, adhering to the same basics of filing would seem to be the best strategy for most companies going forward. Even as budgets for filing may be shrinking, for now, careful thought should be given to trying to maintain a strategy that assumes the economy will bounce back. Put another way, given that the window to protect valuable IP may not be recoverable, it seems the best initial strategy now is to stick to any filing strategy put in place prior to the pandemic.
- IP Prosecution: Extensions of Response and Fee Deadlines May Ease Budget and Strategy Concerns. As the pandemic expands, the world economy is sending legal teams searching for ways to reduce legal budgets. One place where new budgetary constraints could find some relief is in the possibility of delaying or stretching out legal costs to respond to matters that are pending before U.S. and foreign intellectual property offices. On a case-by-case basis, the USPTO, TTAB, and Copyright Office will excuse certain delays in payments or filings by individuals or small businesses affected by COVID-19 illness or related economic hardship pursuant to the CARES Act. See Notice of Waiver of Patent-Related Timing Deadlines under the Coronavirus Aid, Relief, and Economic Security Act; Notice of Waiver of Trademark-Related Timing Deadlines under the Coronavirus Aid, Relief, and Economic Security Act, and Operations Updates During the COVID-19 Pandemic. Similar extensions are available in many of the international patent and trademark offices. Such extensions of time may allow large portfolio managers to manage payments and even legal fees a bit. Importantly, the USPTO’s extensions do require applicants to show that their delay is caused by the COVID-19 crisis, and are more narrowly tailored to the pandemic than other IP offices around the world, such as the EUIPO and Canadian IP offices, which are offering blanket extensions of time during the crisis. Portfolio managers should consult foreign counsel and updated announcements from each office to ensure extensions and delayed payments are acceptable.
- IP Enforcement: A Potential New Paradigm? Be Reasonable, Be Flexible, and Consider Charitable Opportunities. Legitimate IP enforcement remains an important strategy to protect long-term rights, and practitioners should not ignore infringement, especially where there are resources to take action. However, protaganists may want to be mindful in this challenging time when many companies and individuals are not operating at full capacity to be a bit more generous with enforcement deadlines and creative methods of compliance.
Additionally, there is a twist in enforcement priorities for those who hold IP that may help humanity fight the pandemic. Specifically, patent and copyright owners are signing on to the Open COVID Pledge, which seeks to make IP related to solutions to the pandemic freely available. The Pledge was the brain child of the Open COVID Coalition, an international group of concerned scientists and lawyers, and “calls on organizations… to make their patents and copyrights freely available in the fight against the COVID-19 pandemic.”
In a similar spirit of community support to assist those adversely impacted by the pandemic, many support removing licensing obstacles to remote education efforts through relaxation of IP enforcement or extension of the fair use doctrine to facilitate continued education of students who are currently unable to attend schools in person. Hence, content owners who are considering enforcement strategies might consider similar alternate paths as the pandemic continues.
- IP Litigation: Continue to File and Proceed on Paper Where Possible, But Expect Overall Delays. Much like in the world of IP prosecution, filing early remains a priority in IP litigation to assert legal rights, meet statutes of limitations, and optimize potential damages awards. However, many subsequent norms of litigation, such as jury trials, in-person hearings, mediations, depositions, and hard-copy document productions are temporarily hindered due to national and state social distancing recommendations and requirements. Courts are extending deadlines and encouraging parties to proceed purely on paper or postpone civil proceedings where possible, so they can focus their limited resources towards more urgent proceedings, such as criminal matters. State court closings in COVID-19 hotspots (such as New York, most recently) are also affecting trade secret and licensing contract claims. Even where tech-savvy courts are permitting or even utilizing remote options, such as video and teleconferencing capabilities, there is a transitional period where attorneys, parties, and the judiciary adjust to such novel methods of litigating while trying to ensure fairness in the judicial process. The overall disruption to the normal course of litigation is causing many parties and practitioners to delay proceedings where it is not possible to progress purely on papers. Overall, these inevitable delays may serve an overall benefit to parties involved in litigation by easing budgetary concerns during this crisis, without sacrificing the parties’ legal rights.
- IP Licensing Agreements: Include an Updated and Well-Crafted Force Majeure Clause. If companies and contract attorneys only take away one lesson from this unprecedented public health crisis, it should be this: include a standard force majeure clause specifically naming health pandemics as a reason for rescission in all future contracts. Although such clauses are not the only opportunities for relief during such a crisis, as common law doctrines of “impossibility,” “commercial impracticability” and “frustration of purpose” may provide alternate avenues for reprieve from contractual obligations during a pandemic, a clear force majeure is the simplest and most cost effective avenue for protection. Aside from such contractual considerations, business considerations including impacted capital are affecting new licensing agreements amidst the pandemic, which has substantially lowered the economic status of a number of entities and individuals.
The COVID-19 health crisis has widely impacted how the world operates, and the realm of intellectual property law is no exception. However, many practitioners can and should continue to proceed as diligently as possible to secure, enforce, and protect IP rights that will far outlast the current crisis, while others may even be able to use their IP technologies to join the fight against the pandemic. With persistence, patience, and adaptive strategies, individuals and entities may survive the current crisis and emerge with decades of strong IP rights in their future.
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