"Design Around": Is What's Sauce for the Patent Goose Sauce for the Copyright Gander?

One of the more interesting aspects of IP law and practice is the use of terms that are not taken from explicit statutory language, but nevertheless have become part of the currency of IP thought and expression. This occurs without necessarily giving thought about the proper metes and bounds of such a term. One notable such term is "design around." As used in connection with patent law, the notion embodies a basic aspect of the patent system. We are taught that the "right" of a third party to design around a patent is part and parcel of the patentee's exclusive rights in the invention. The inventor agrees to disclose the invention in exchange for enjoying certain exclusive rights for a fixed period of time. A third party can certainly wait until the patent registration expires and the invention enters the public before making use of the disclosed invention. But the patent incentive system is not limited to post-expiry activity. Instead, it seeks to incentivize third parties to invent during the pendency of the patent, i.e., to design around the existing patent. In this way, both inventors are rewarded for their inventions in the short term, while the public benefits from the teaching of not one but two (or more) inventions in the longer term. Seen in this light, "design around" is an unabashedly positive notion, which contributes to a robust patent system.

So imbued is this Kat with the idea that "design around" is something to be encouraged that he never gave much thought to the possibility that there might be circumstances in which something akin to "design around" might be viewed in less positive IP terms. But this Kat's complacency was jarred earlier this week in connection with a talk that he gave about the U.S. case, WNET v Aereo. On 1 April 2013, the Second Circuit Court of Appeals affirmed a decision by the lower court to deny a request for a preliminary injunction against Aereo for the operation of its distinctive content retransmission system, here. Under this system, a farm of coin-sized antennae was set up in Brooklyn to enable Aereo to download broadcast content for retransmission, without permission of the content owner. For each user, there is a separate and distinct antenna that enables the user either to view content virtually simultaneously with transmission or to enable viewing at a later time.

The majority reasoned that a retransmission broadcast to individual users under such circumstances is not a public performance under the U.S. Copyright Act, as construed by the court in 2008 in the so-called Cablevision decision here. As such, it was not captured by the retransmission provisions of the Act. This result was vigorously objected to by the respected Judge Denny Chin. In his dissent, he called Aero’s “technology platform” a “sham,” describing it as a “Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.” In short, as one of the members of the audience then noted, what Aereo had done was to “design around” the Copyright Act. “What an intriguing idea”, I thought to myself—“One can “design around” a law as well around a patent. Here, however, at least in the view of Judge Chinn, “designing around” the Copyright Act was an unashamedly undesirable activity.

What exactly accounts for this stark difference in approach? One might be tempted to say that “designing around” a patent is by its very nature a productive activity, while “designing around” a law is not. But that seems too facile. After all, not every successful effort to design around an existing patent yields an invention of any practical value (indeed, the same can be said of patents in general). At most, only a relative handful of issued patents are ultimately of any material significance. When one adds to that the uncertainty in the scope of claims and the relatively limited amount of time that an examiner can actually devote to any given patent application, one is tempted to argue that “designing around” has the potential to add to the already overabundance of problematic patents, depending upon the circumstances..

As for “designing around” a law, this Kat feels a bit uneasy at Judge Chin’s characterization that the Aereo system is merely a “sham.” A “sham” is defined by dictionary.com as “a confidence game or other fraudulent scheme, especially for making a quick profit; swindle.” Whatever one thinks about Aereo’s retransmission system, calling it a “sham” seems both a bit over the top and inapt. Moreover, at least in principle, if Aereo’s system is viewed as” unfairly” exploiting the current provisions of the Copyright Act with respect to retransmission, there always exists the opportunity to correct this "error" by amending the copyright legislation. (As well, there have been suggestions that the case may be ripe for an appeal to the Supreme Court.) Indeed, there is much less flexibility with respect to an invention that has successfully designed around an existing patent, whether for good or for bad. Unless the patent is not renewed or is cancelled, it will be around for a 20-year period. The broader point is that, when we use extra-statutory terminology to communicate notions about intellectual property, we all too infrequently think about the full panoply of meanings replete by the use of such term. This richness of possibilities both enriches our IP vocabulary, but at the same time it can also undermine the precision of language to which we presumably aspire.

More on Rube Goldberg here.