March 2016

“What’S in a Name?” Billions of Dollars, That’s What

March 22, 2016
International Law, Trademark Law

Travis Waller, MJLST Staffer

Cease-and-desist letters have long been one of the most commonly used, and perhaps more potent, of the tools relied upon by organizations and legal counsel to cut short unauthorized 3rd party use of material relating to that company’s trademarks. In 2013, Marcella David published a fascinating article in vol. 14 of the Minnesota Journal of Law, Science & Technology entitled “Trademark Unraveled: The U.S. Olympic Committee Versus Knitters of the World”. This article discussed the “scandal” surrounding the U.S Olympic Committee’s (USOC) harshly worded cease-and-desist letter sent to the operators of a website for knitters, called ravelry.com. What did ravelry.com do to receive this response? Ravelry.com hosted a kind of knitting competition, which it called the “ravelmpics”, in which the site would promote various events (such as the afghan marathon) and award “blog badges” to the winner of these events. Ravelry.com even had commemorative pins made up to memorialize the event.

Soon after the announcement of the “ravelmpics”, the USOC sent a cease-and-desist letter to ravelry.com. The outrage surrounding the USOC’s cease-and-desist letter (which complained that the “ravelympics” made light of Olympic athlete’s lifetime of training and dedication, among other things) was immediate and intense, so much so that the USOC actually apologized to ravelry.com for the letter twice, as well as blamed the contents of the letter on an over-zealous summer associate within the organization’s legal department.

While this event may mark the upper limits of the strange when it comes to brand protection, the Olympic committees appear to have not lost their appetite for using their trademark rights in the word “Olympic” as a sword, as the International Olympic Committee recently carved up the name of a Portland charcuterie shop, now known as Olympia Provisions.

Bologna, right? Not necessarily. (Olympia Provisions prides itself on it’s salami). While organizations like the USOC’s actions against these companies may seem harsh – even ridiculous – at first blush, there can be very real harms to an organization’s branding efforts and trademark protection if prevention of unauthorized use is not vigorously enforced. Remember Aspirin? Linoleum? Trampoline? These names, which have now fallen into common use as terms for items, used to be trademarks. That is, aspirin used to denote a brand of acetylsalicylic acid, made by the company Bayer, and branded as “aspirin”.

This loss of rights is due to an aspect of trademark law that allows the expiration of trademark protection for certain marks that lose their status as “source identifiers”. While it may be difficult now to imagine the word “Olympic” as ever losing its connection to the Olympic Games, words have a funny way of changing meaning simply through their usage over time. To this point, consider “literally”, which today is synonymous with both “actually” and “figuratively” (“literally” antonyms of each other).

Aside from the USOC, the NFL is another large entity that actively enforces it’s use of the “SUPER BOWL” mark through cease-and-desist letters, and does so out of many of the same fears that the USOC uses in justifying it’s strict enforcement of it’s marks.

To bring this discussion to a head, cease-and-desist letters are probably more a tool of necessity than an expression of corporate malice. While there may be the rare occasion of an “over-zealous summer associate” or two, the astronomical economic value associated with the trademarks of many of the worlds most famous brands provides ample incentive to stymie even the most negligible 3rd party uses, strong likelihood of confusion or not. This is because, like it or not, language is slippery, and far is the fall to “generic”.

The Path of Pollutants Under the Clean Water Act

March 19, 2016
Environment, Environmental Law, EPA

Ted Harrington, MJLST Staffer

In 1972, the Clean Water Act set forth a lofty goal—to “[r]estore and maintain the chemical, physical, and biological integrity of the nation’s waters.” (33 U.S.C. §1251(a)). Yet, the Clean Water Act only regulates point sources that discharge pollutants into navigable waters (33 U.S.C. §1251(a)(1)). As a result, many forms of water pollution escape federal jurisdiction, most notably, groundwater. This is because CWA regulation depends on how a pollutant reaches navigable water, instead of focusing on the end result. This added constraint is hardly logical when juxtaposed against the stated goal.

For example, if a pollutant is discharged into groundwater, and eventually reaches navigable Water Body B, the CWA does not have the ability to regulate the groundwater. In other terms, if the polluted effluent passes through groundwater, considered a “nonpoint source,” before it reaches Water Body B, no CWA regulation occurs.

To combat this issue, Federal District Courts in Hawai’i, North Carolina, and Pennsylvania have begun adopting the “Conduit Theory” (See Allison Kvien note Volume 16). The conduit theory states that if a body of water (groundwater) simply acts as a conduit, it should be viewed as an extension of the point source from which it is receiving the pollutant. This theory directs its attention to the ultimate result—the pollution of Water Body B. It is only logical that if Water Body B is being polluted, the source should fall under CWA jurisdiction. Why should we leave a source of pollution unregulated simply because the effluent isn’t being directly discharged into a navigable water? As the Court in Rapanos v. United States noted, “The [Clean Water] Act does not forbid the ‘addition of any pollutant directly to navigable waters from any point source,’ but rather the ‘addition of any pollutant to navigable waters.’”

The issue of groundwater as a pollutant is receiving increasing attention in the courts. In the Northern District of Iowa, a case concerning the discharge of groundwater through tile drains is currently in litigation‑ Board of Water Works v. Sac County Board of Supervisors. This could be an opportunity for Iowa to take one of the first stances on the conduit theory in the 8th Circuit. Stay tuned!

Geostationary Earth Orbit: Property for the Space Age

March 10, 2016
Property Law, Space Law

Ian Blodger, MJLST Note & Comment Editor

The past several years have seen great advances in space based technology and exploration. Most recently, scientists used the LIGO to prove the existence of gravitational waves. While the two detectors used to make this discovery were located in the United States, scientists have plans to deploy more advanced and precise measuring tools in space, likely in Geostationary Earth Orbit (GEO). GEO’s unique properties make it a perfect choice for this and similar satellite technology. Essentially, GEO is an orbital path around Earth where satellites remain in a fixed position above a specific point on Earth. This aspect of GEO makes it easier for the satellite to communicate with Earth based operations because the satellite operator does not need tracking technology to follow the satellite, but can simply build a stationary receiver. One additional result of GEO is that satellites that enter this orbital path remain there forever unless they are pushed out of orbit somehow. This is distinct from satellites in Low Earth Orbit (LEO) where satellites are not fixed above one point on Earth and remain for only a few years. This gives GEO satellites an additional advantage of reducing costs over the long term because operators do not need to replace them with the same frequency as LEO satellites. With the special conditions and long term cost savings of GEO, it is no wonder that more and more satellite operators and manufacturers are interested in placing a satellite in GEO.

One issue that will become more important as satellite operators continue to utilize GEO’s special attributes is the issue of property rights. Currently, satellite operators who place a satellite in GEO have no property right over that orbital position. In my Note “Reclassifying Geostationary Earth Orbit as Private Property: Why Natural Law and Utilitarian Theories of Property Demand Privatization,” recently published in Volume 17 of the University of Minnesota Journal of Law Science & Technology, I argue that this lack of a defined property right is both contrary to the underlying theoretical assumptions of various space treaties, and that granting a property right would be a good idea from a utilitarian perspective.

Allowing individuals to obtain property rights over a region of space makes sense from a natural law perspective. The various space treaties cite natural law for the proposition that an individual cannot own space, likening the vast emptiness to the sea. Under traditional natural law theory, the sea is not subject to homesteading and other means of property acquisition because it is so large and is not capable of being contained. However, Grotius, the natural law philosopher most responsible for this theory argued that when an area of the sea was slightly separated and could be wholly controlled, then property rights could exist.

While space generally is more like the uncontrollable sea, GEO is more akin to small inlets capable of control. First, GEO only comprises a small area of space; if satellites are too close to Earth or too far, they will not maintain their synchronicity with the planet’s rotation. Second, objects placed in this orbit will remain in a fixed position relative to the Earth. This is different than a ship on top of the ocean that moves with the waves and tides relative to shore. Finally, individuals who place satellites in orbit expend large amounts of money and energy to do so, and therefore meet the labor requirement expressed by both Grotius and Locke’s theories of property.

Granting property rights over certain portions of GEO makes sense from a utilitarian approach as well. This approach to property looks to see whether leaving things in common causes more harm than benefits. In this case, the tragedy of the commons has caused large costs and dangers that could be rectified by allowing GEO property rights. First, without property rights, individuals have little incentive to ensure their satellites leave orbit after failure. Under the current approach to GEO, satellite operators have little incentive to move their satellites to a graveyard orbit following failure because they can obtain another, similar, GEO position and do not have to worry about selling the inhabited position at a loss. With property rights over these positions, there would be a great incentive to move the satellite to a graveyard orbit to secure the best price for the position. Second, because no satellite operator has a property right which is harmed by space debris in the area, manufacturers create a race to the bottom in terms of quality parts, which in turn results in malfunctions and potentially more debris in the area. This leads to debris defense costs, such as special plating to deflect debris, that add up over the long term. Thus, a utilitarian approach to property yields the same result as the natural law: satellite operators should obtain a property right over GEO.

This is an interesting and fast moving area of law, and the decisions we make now can have great impacts on the future of space operations, especially considering debris in GEO will remain there forever.

Drug Shortages: A Mask for Reprehensible Activity?

March 10, 2016
Competition, Drug Policy, Economics, Healthcare

Ethan Mobley, MJLST Articles Editor

Access to life-saving prescription medication grabbed headlines after Turing Pharmaceuticals raised the price of its HIV drug, Daraprim, by about 5,000% overnight. While the Daraprim price hike initially appears to be driven by pure greed, it’s at least conceivable that basic economic principles of supply and demand may have played a minor role. Indeed, many other drugs have undergone serious price hikes arising from innocent supply constraints. While the defensibility of Daraprim price hikes remains uncertain, the story does bring to focus an issue affecting accessibility of hundreds of other life-saving prescription medications—drug supply shortages.

Drug shortages naturally restrict many patients’ ability to obtain life-saving medication, which can have disastrous effects. The Minnesota Journal of Law, Science & Technology addressed the issue in 2013 with a note written by Eric Friske. Friske found that drug shortages are often caused by a “combination of perturbed supply, manufacturing capacity, and utilization.” Friske then analyzed the efficacy of proposed (and now failed) legislation meant to reduce these supply shortages by requiring manufacturers to notify the FDA of impending shortages; the legislation would have also allowed the FDA to collaborate with manufacturers in order to streamline production. However, Friske determined these tools were insufficient to properly combat the shortage problem and proposed his own solution. In addition to notification requirements, Friske pushed for affirmatively incentivizing manufacturers to produce certain drugs and streamlining the drug manufacturing approval process.

Since Friske’s proposal, we’ve seen new legislation and regulation that aims to reduce the number of drug shortages. What’s more, the legislation and regulations contain notification requirements, manufacturer incentives, and streamlined approval processes—just like Friske proposed. While it’s obvious the drug shortage problem has not been solved, it is equally clear drug shortages have decreased over the past few years. Hopefully the trend continues so that life-saving drugs remain accessible to everyone, and drug companies will no longer be able to use supply shortages as justification for obscene price hikes.

Compulsory Licensing and Health Law

March 10, 2016
Competition, Drug Policy, Healthcare, Intellectual Property

Nolan Hudalla, MJLST Staffer

In her articleA Public Health Imperative: The Need for Meaningful Change in the Trans-Pacific Partnership’s Intellectual Property Chapter, Roma Patel discusses the benefits that TRIPS “flexibilities” provide to the pharmaceutical markets in developing nations. Specific to this discussion, Ms. Patel notes that malaria is a permissible reason for a country to declare a “national emergency” or “circumstance of extreme urgency” under TRIPS. Such a declaration would allow a nation to utilize the TRIPS compulsory licensing provision. This permits “a government to allow the sale and manufacture of patented medicine without the patent holder’s consent.” With the recent development of aviable malaria vaccine, what can we expect the impact of this provision to be? In particular, will countries invoke compulsory licensing on the basis of a malaria “national emergency,” and, if so, what results can we anticipate?

According to history, we can’t expect much. According to Nicol & Owoeye, “[t]o date, there is little to suggest that the Implementation Decision and the Protocol [for the compulsory licensing provisions] can meaningfully contribute to reversing the failure of the industrialized world to supply essential medicines to the countries that need them the most. Nor does there appear to be widespread enthusiasm for using Implementation Decision and Protocol mechanisms to facilitate the provision of low-cost or no-cost pharmaceuticals to those most in need.” This certainly appears to be true for impoverished African nations. For example, the continent has already been devastated by the HIV/AIDS epidemic, yet compulsory licensing has not provided a sufficient solution. In fact, according to a UNAIDS report, “[o]f the 21.2 million people in Africa eligible for antiretroviral therapy in 2013 under the 2013 WHO guidelines, only 7.6 million people were receiving HIV treatment as of December 2012.”

Brian Owens’ article Questions Raised about Whether Compulsory Licenses get Best Pricesdiscusses one of the reasons for the disappointing results of compulsory licensing. He notes that “[t]he use of so-called ‘compulsory licenses’ by developing countries to obtain cheaper drugs for HIV and AIDS by circumventing patents has not been the best strategy for achieving the lowest prices over the past decade . . . .” Expanding on this, Owens states that, “of the 30 cases of compulsory licensing from 2003 to 2012 for which reliable data was available, the median price achieved through international procurement was lower for 19 of them [than compulsory licensing]—in the majority of cases by more than 25% . . . . The effect was strongest in the poorest countries, where in six out of seven cases the procurement price was more than 25% lower than the compulsory license price.” Amir Attaran, the director of the study discussed in Owens’ article, asserts that “countries should not rush into using compulsory licenses until they have exhausted all other options. “Countries can save money using compulsory licenses, but they can save more by negotiating and using international procurement channels . . . If saving money is paramount, then compulsory licenses may not be the optimal strategy.”

Unfortunately, saving money is paramount for many African nations. Thus the greatest “flexibility” given to these nations is not always a practical solution. Perhaps the arrival of the first malaria vaccine will motivate international leaders to learn from prior experience. Hopefully the international community will reconsider compulsory licensing, as Roma Patel did, to determine how it can better provide access to life-saving medications.

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