Imagine you and your neighbor have a dispute over the boundary between your backyards. After trying and failing to work it out amicably, you sue your neighbor for encroaching on your property. The court, after hearing your neighbor’s argument he isn’t actually encroaching and that the property isn’t yours anyway, sides with you. You would expect the neighbor to accept defeat and stop his trespassing.
But what if instead, he simply asked the court to permit him to continue doing what he was doing before, even though he is a trespasser? You’d think that would be a ridiculous outcome. How can one be a trespasser, but retain the right to remain on your land? Yet, this is precisely what Comcast sought to do in a patent dispute between TiVo and Comcast. TiVo owns patents on technology that allows viewers to program their cable boxes remotely, and licenses these patents to other cable providers. Comcast, one of the nation’s leading cable service providers, was unwilling to continue paying for such a license, which it had previously done. Nor was it willing to spend money to design alternative technology.
Instead, Comcast imported cable boxes from abroad that incorporated TiVo’s patented technology. When TiVo brought a complaint before the International Trade Commission, Comcast first asserted that TiVo’s patents are invalid and that in any event its own boxes don’t actually violate any of TiVo’s patents.
Comcast, of course, had a perfect right to assert these defenses. Indeed, the very purpose of the Commission is to decide such disputes. However, once Comcast had lost on its legal arguments, it tried to do something truly extraordinary. It then argued that even though TiVo’s patents are valid, and even though it infringes TiVo’s rights, the Commission should nonetheless permit it to continue to bring these infringing devices into the United States because blocking them would be contrary to the “public interest.”
In making this extraordinary motion, Comcast argued that disallowing it from importing infringing devices will actually hurt consumers. This stands the very idea of patent protections and property rights on its head. Consumers are not hurt by patents. Instead, patents ensure that the inventors are spurred to innovate. In order to entice people and companies to invest their time, money, energy, and know – how in innovative but uncertain activities we promise them exclusive rights if they are successful in their quest. But the incentives only work if we keep our end of the bargain – if the rights that we have promised to be exclusive will actually remain exclusive. Undermining these promises will send an unmistakable message that patent protections are not worth much and that inventors and investors should look elsewhere when deciding how to spend their intellectual and financial resources. That is what’s contrary to the public interest, not continuing importation of infringing products. Luckily, the Commission rejected Comcast’s arguments.
Most Americans have never heard of the International Trade Commission. Even the name itself suggests some U.N. – based body that has little or no effect on our daily lives. Yet, the Commission (which is an entirely American and not a foreign institution) is one of the most important bulwarks against unfair trade practices from foreign competitors.
The Commission is a bipartisan body, with equal number of Republican and Democratic commissioners, and it is charged with ensuring that the various articles of trade that enter the United States don’t violate the intellectual property rights of American citizens and companies. In its decision, the Commission showed once again that whatever differences we may have as Republicans and Democrats, as Americans we should come together to defend against what Chief Justice John Marshall termed “violent invasions of the sacred rights of property.”
Published in Daily Times, December 25th 2017.