Strategic Keystone

If the proposed Keystone XL oil pipeline through the United States is not built, Canada is likely to redirect massive quantities of oil from its Alberta tar sands to China.  Proven oil reserves in Canada - largely Alberta - rival those of Saudi Arabia.  Losing access to them would be perceived by many in the U.S. as a strategic disaster.  Losing them to growing rival China would perceived as far worse.

Enter the environmental impact assessment process mandated by the U.S. National Environmental Policy Act ("NEPA") in the case of major federal actions.  President Barack Obama stated on July 27, 2013, that

I'm going to evaluate this [proposed Keystone XL pipeline] based on whether or not this is going to significantly contribute to carbon in our atmosphere.

On January 31, 2014, the U.S. Department of State released its Final Supplemental Environmental Impact Statement ("FSEIS") on the pipeline.  Section 1.4 of the FSEIS includes analysis of President Obama's evaluation criterion:

Approval or denial of any one crude oil transport project, including the proposed Project, remains unlikely to significantly impact the rate of extraction in the oil sands...

In other words, according to the FSEIS, approval of the Keystone XL pipeline will be essentially irrelevant to the amount of "carbon in our atmosphere." So, will the United States or China be directly responsible for releasing that carbon?  Based on the the State Department's FSEIS, it is now much likelier to be Canada's fossil fuel-hungry neighbor to the south.

Potent Patent Portfolios

Once a leading technology firm, Motorola Mobility, through its sale to Lenovo, has now completed its transformation from a hardware company, to a provider of Android platforms, and, finally, to a pure, yet powerful, portfolio of patents.  Which of these incarnations is the most valuable?  The patent portfolio has, because it has given Google some measure of legal security among the robust patent holdings of competitors like Apple, Microsoft, and Amazon.  Like a aircraft carrier purchased for the salvage value of its copper wire, Motorola Mobility is now being stripped down for its intellectual property.  For many companies, that is increasingly where their only true value lies.

Grand Patent Alliance

Two of the main combatants in the global patent war that has been raging over the past few years in the mobile/tablet industry have reached an intellectual property détente.  On January 26, 2014, technology titans Samsung and Google announced a grand cross-licensing deal that eliminates current, and avoids future, patent disputes.  Here is an excerpt from the Samsung announcement:

Samsung Electronics Co., Ltd. and Google Inc. today furthered their long-term cooperative partnership with a global patent cross-license agreement covering a broad range of technologies and business areas. The mutually beneficial agreement covers the two companies’ existing patents as well as those filed over the next 10 years.

This deal may relieve some of the competitive pressure facing Google after the September 29, 2011, patent treaty agreed between Samsung and Microsoft.  As in any world war, alliances between former combatants can decisively tip the strategic balance from disadvantage to victory.  More patent alliances are a certainty before this mobile/tablet war ends.

License To Patently Disagree

Today (January 22, 2014), the United States Supreme Court decided Medtronic v. Mirowski, a patent case in which the main issue was whether or not a patentee has the burden of proving patent infringement even when an allegedly-infringing licensee has sued for declaratory judgment of noninfringement.  Here is a summary of the dispute from the syllabus of the Court's decision:

Petitioner Medtronic, Inc., designs, makes, and sells medical devices. Respondent Mirowski Family Ventures, LLC, owns patents relating to implantable heart stimulators. They have a licensing agreement that permits Medtronic to practice certain Mirowski patents in exchange for royalty payments, and that specifies procedures to identify products covered by the license and to resolve disputes between the parties. Pursuant to those procedures, Mirowski notified Medtronic of its belief that several of Medtronic’s products infringed the licensed patents, and Medtronic then challenged that assertion of infringement in a declaratory judgment action, while accumulating disputed royalties in an escrow account for distribution to the prevailing party. The District Court concluded that Mirowski, as the party asserting infringement, had the burden of proving infringement and that Mirowski had not met that burden. The Federal Circuit disagreed. It acknowledged that a patentee normally bears the burden of proof, but concluded that where the patentee is a declaratory judgment defendant and, like Mirowski, is foreclosed from asserting an infringement counterclaim by the continued existence of a licensing agreement, the party seeking the declaratory judgment, namely Medtronic, bears the burden of persuasion

The Court decided in favor of Medtronic, holding that

When a licensee seeks a declaratory judgment against a patentee that its products do not infringe the licensed patent, the patentee bears the burden of persuasion on the issue of infringement.

The Court also nodded to the public policy considerations of its decision, noting that

General considerations relating to the public interest in maintaining a well-functioning patent system are, at most [in this dispute], in balance, and do not favor changing the ordinary burden of proof rule.

In holding that the patentee has the burden of providing infringement, whether it or an allegedly-infringing licensee files suit, the Court found for consistency and against the Court of Appeals for the Federal Circuit.

Patent licensees may now breath more easily as they consider challenging patents they have licensed.  Patent owners are now likely even more carefully to weigh the consequences of alleging that their licensees infringe their patents.

Kennedy's Dolphin Hunt Tweet

In 2009, a documentary called "The Cove" brought widespread attention to a dolphin hunt carried out annually in Taiji, Japan.  The film went on to win the 2010 Academy Award for Best Documentary Film.  This year's Taiji dolphin hunt has attracted attention, not just from Sea Shepherd and other conservation and animal rights organizations opposed to the hunt, but even from The U.S. Ambassador to Japan, Caroline Kennedy.  On January 17, 2014, @CarolineKennedy tweeted

Deeply concerned by inhumaneness of drive hunt dolphin killing. USG opposes drive hunt fisheries.

This may be one of the most direct criticisms of a close ally a U.S. Ambassador has ever made about the humane treatment of animals. 

FDA, DNA, & TMI

As discussed earlier on LEXVIVO, on November 22, 2013, the United States Food and Drug Adminstration ("FDA") sent a "WARNING LETTER" sent to 23andme warning that it considers the sequencing and reporting of consumers' genomic information

a device within the meaning of section 201(h) of the [Food, Drug and Cosmetic] Act ["FDCA"], 21 U.S.C. 321(h), because it is intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or function of the body.

The FDA asserted its authority to regulate approval and sales of this "device."

On January 15, 2014, in the leading international science journal, Nature, Robert C. Green (Associate Professor of Medicine, Division of Genetics, Brigham and Women’s Hospital and Harvard Medical School, and Associate Director for Research, Partners HealthCare Center for Personalized Genetic Medicine) and Nita Farahany (Director, Science & Society, Duke Institute for Genome Sciences & Policy, Professor, Law and Philosophy, and Professor, Genome Sciences and Policy) published an insightful critique of the FDA's decision to regulate consumer genomics.  They conclude as follows:

We believe that 23andMe should be more transparent about how accurate its genotyping chips are, and even more forthcoming about the limitations of its computer algorithms used for estimations of risk. But regulatory constraints might stifle consumer genomics and other emerging products that could make society healthier and that do not fit neatly into the model of physician-driven health care. The effects of these products should be monitored but, as long as emerging empirical data show no evidence of harm, we urge the FDA to let consumer genomics testing proceed.

The FDA would do well to take notice.

Innovation For Productivity

The Conference Board, Inc. ("Board") is a nonprofit that conducts and publishes broadly-based economic research that provides "trusted insights for business worldwide."  In its 2014 Productivity Brief, the Board raises the alarm about worldwide deficiencies in 2013 total factor productivity ("TFP") growth, which it explains as

the result of a combination of improvements in efficiency (fewer inputs are needed for a given output) as well as technology and innovation (more output is achieved from a given input).

In its Brief, the Board reported a remarkable slowdown in TFP growth:

One dramatic result...is that the growth rate of total factor productivity...is less than zero for the global economy.  This indicates a stalling in the efficiency of optimally allocating and using resources.  This stalling appears to be the result of slowing demand in recent years, which caused a drop in productive use of resources that is possibly related to a combination of market rigidities and stagnating innovation.

Market rigidities can be alleviated through reforms to the legal regulation of capital, labor, and taxation regulations.

The problem of "stagnating innovation" is much more difficult to solve.  Technological innovation is crucial to productivity growth, in large part because of its strong effects on production-possibility frontiers.  Even with current patent systems and government research subsidies, technological innovation appears to be lagging.  Perhaps open and user innovation deserve more attention from policymakers as one antidote to this problem.  In the meantime, worldwide productivity and innovation appear to be impeded.

Network Neutrality Nixed

Today (January 14, 2014), the highly-influential United States Court of Appeals for the District of Columbia rejected Federal Communications Commission ("FCC") rules aimed at ensuring network neutrality.  With two federal courts having rejected the FCC's network neutrality rules, it will likely not be long before the United States Supreme Court decides this issue.

Dan Goor's Nine-Nine Shine-Time

Congratulations to Executive Producer, Creator, and Writer Dan Goor on his Golden Globe Award for Brooklyn Nine-Nine!  It's been a long time since we both lived in Eliot House - he as a student and I as the Biology Tutor - and ate together in the Dining Hall.  He was brilliantly funny then, and it's been fun watching him rise in comedy from strength to strength.

Law Which Alters When It Alteration Finds

The New York Times published a wonderfully-detailed article on January 5, 2014, chronicling how the Big Island, Hawai'i, arrived at a new ban on genetically-modified organisms ("GMOs").  Entitled "A Lonely Quest for Facts on Genetically Modified Crops," the article follows the dogged pursuit of the science of GMOs by Gregor Illagan, a member of the Hawai'i County Council, in advance of a proposed GMO ban.  The ban, in Bill 113, was passed by the Council and signed into law by Mayor William P. Kenoi on December 4, 2013.
In 2007, I published article, "Intellectual Property as the Third Dimension of GMO Regulation," which discusses the issues surrounding GMO regulation.  Here is the abstract:

In the past, opposition to GMOs and GM crops has tended to focus on alleged dangers to human health and environmental safety. The United States, Canada, and Europe have all established regulatory frameworks whose stated aims are to ensure that GMOs and GM crops do not harm the health of their citizens or threaten the well-being of their environments. However, these jurisdictions have set up regulatory hurdles of significantly different heights. North American neighbors, the United States and Canada, have tended to regulate GMOs and GM crops with a relatively light touch that tends to ease approval for field-testing and commercial marketing. By contrast, Europe has applied much stricter regulatory standards, with the result that few GM crops have been field-tested or GM foods allowed onto the market there. A large and growing body of scientific studies into the human health and environmental safety of GMOs and GM crops has failed to find significant justification for the extreme precautionary approach adopted by Europe. Furthermore, a WTO panel decision forcefully critical of the European regulatory regime for GMOs and GM crops was recently accepted by Europe, and may herald the adoption of a new regulatory regime more accepting of GMOs and GM crops.

As prospects have faded that scientific evidence will demonstrate that GMOs and GM crops pose unique threats to human health and environmental safety, a third locus of anxieties has been growing in significance: patent monopolies over new and useful GM crops. Concerns about monopoly control of GM crops are the obverse of concerns about human health and environmental safety. Where the latter rationales counsel against the easy and widespread adoption of GM crops, the former rationale would operate to ensure such easy and widespread adoption. Both the United States and Europe offer patent protection for GM plants and animals, making regulation against patent monopolies in GM crops difficult. However, Canada does not allow the patenting of GM plants and animals, thus avoiding patent monopolies in GM crops per se. Ironically, just as Europe might look to Canada for a new method of regulating GMOs and GM crops, Canada may be undergoing a transition toward allowing such inventions to be patented.

Of the three loci of regulation of GMOs and GM crops, the patent system maintains the most integrity. The scientific justifications for strictly limiting GMOs and GM crops due to concerns over human health and environmental safety have yet to materialize to any significant degree. In fact, there is so little scientific evidence of unique risks of GMOs and GM crops that even invocation of a conservative precautionary principle may be unjustified. Regardless of how regulation of GMOs and GM crops changes in Canada and Europe in the future, it is likely that concerns over monopoly control will grow in significance as a rationale for regulation, while the rationales of human health and environmental safety will continue to fade in the absence of a reversal of the current trend of scientific evidence.

The issues involved in the Hawai'i debate recur predictably in almost debates over GMOs.  One of these is the initial emphasis on health and environmental safety followed by the emergence of concerns about monopolies and patents.  Plus ça change, plus c'est la même chose.