Quarterly Journal 50-1 Volume 50, Issue 1 March 2022

OPEN SOURCE SOFTWARE AND STANDARDS DEVELOPMENT: COMPETITION LAW IMPLICATIONS

Technical standards developed by standards development organizations (“SDOs”) increasingly involve software-based solutions that implicate open source software (“OSS”). Traditional SDO standards activities and open source projects are not mutually exclusive, and both can drive innovation and competitiveness. As noted by the European Commission’s 2017 communication on the EU’s approach to SEPs, integration between open source projects and standards development processes may be “a win-win situation,” and “[f]lexible and effective interactions between standardization and open source communities will promote and accelerate the uptake of advanced technology developments.” This paper considers the competition law implications of integrating standards development and open source efforts, to help facilitate that potential “win-win” outcome, and achieve the pro-competitive goals of standards development, rather than create risks of competitive harm that will deter innovation. This paper submits that consensus-based approaches to standards development, where account is taken of all stakeholder interests, and which abide by principles of openness, balance and due process, should apply equally when SDOs accommodate open source projects. Experience shows that such procedural safeguards are fundamental to avoid potential anti-competitive effects resulting from imposing IPR policies that favor discrete stakeholder interests. This paper further explains that EU and US competition law provide the necessary tools to challenge conduct related to standardization and open source licensing that may diminish competition and innovation.

THE UGLY SIDE OF BEAUTY: OUTDATED REGULATIONS CONTROLLING THE GROWING AND EVOLVING E-COMMERCE COUNTERFEIT COSMETICS MARKET

Trademark owners and law enforcement have been working to combat the counterfeit
trade for years with little success. Recently, the cosmetics industry has been disproportionately
targeted by counterfeiters due to social media popularization of products through content posted
by beauty influencers. Moreover, the popularity of e-commerce has been further exacerbated by
the COVID-19 pandemic, which continues to motivate consumers to seek out alternatives to
traditional in-person shopping. Counterfeiters have been able to adapt their behavior to best
capitalize on these changes in consumerism and United States consumers and businesses are the
ones suffering. Specifically, counterfeit cosmetics products are detrimental to the profitability
and integrity of United States brands and pose a serious threat to the health and safety of consumers.

Two factors that have allowed counterfeiters to thrive despite these changes are their
ability to maintain anonymity on the internet and the lack of federal legislation specifically
regulating the e-commerce marketplace platforms that United States consumers have come to
heavily rely on. Existing legislation is also ill-equipped to handle these changes in consumerism
and strides in technology—especially given the increased sophistication of the counterfeit
trade—because the laws are shockingly outdated.

Accordingly, this Note calls for stringent e-commerce focused intellectual property
regulation to combat the current counterfeit trade and deter its efficacy in the future. Using
Amazon as a case study—though other e-commerce platforms, such as eBay and Alibaba, are
also riddled with counterfeit products—this Note examines the current e-commerce marketplace
environment. This Note ultimately concludes that the SHOP SAFE Act lays a solid foundation to
combat the sale of counterfeit cosmetics via the internet and, with a few proposed amendments,
will be able to effectively protect United States consumers and trademark owners.

SAFE HARBOR FOR REVERSE PAYMENT AGREEMENTS: ADOPTING REGULATIONS TO HELP PARTIES SETTLE WITHOUT ANTITRUST CONCERNS

The Hatch-Waxman Act has enabled low-cost generic drugs to enter the market and benefit patients. Meanwhile, it also benefits brand name drug companies by adjusting their patent terms. The reverse-payment made after the paragraph IV challenge under the Hatch-Waxman Act, however, has attracted great antitrust concerns. This Note will review the antitrust problems of reverse-payment and analyze the solutions previously proposed, then propose new solutions to address the antitrust concerns in the reverse payment agreement.

HOW TO GET RICH WITHOUT EVEN TRYING: THE MUSIC MODERNIZATION ACT GIVES MUSIC PUBLISHERS AN ADVANTAGE TO UNFAIRLY PROFIT FROM THE WORK OF INDEPENDENT SONGWRITERS

The Music Modernization Act of 2018 authorized the Register of Copyrights to create the Mechanical Licensing Collective (MLC). The MLC collects blanket mechanical licenses from Digital Service Providers, like Spotify, and distributes the royalties to the appropriate copyright owners. As part of their distribution efforts, the MLC maintains a public database of musical works and matches each with those appropriate copyright owners. However, if royalties remain unmatched or unclaimed they are distributed to members of the MLC according to market share.

Music publishers, as opposed to songwriters, disproportionately benefit from the current scheme in three ways. First, music publishers hold a supermajority on the MLC’s Board of Directors.Second, music publishers make up the greatest proportion of the market share. Third, the audit procedures lack efficient accountability measures. Thus, independent songwriters stand to remain unfairly compensated for their works.

This Note proposes that 17 U.S.C. § 115(d)(3)(D)(i) should be amended to evenly split power on the Board between songwriters and music publishers. Additionally, 17 U.S.C. §  115(d)(3)(J)(i) should be amended to reallocate 50% of unmatched and unclaimed royalties to be distributed in the form of grants to causes that incentivize creation. Lastly, 17 U.S.C. § 115(d)(3)(D)(ix)(II) should be amended to authorize the U.S. Copyright Office to have final approval over the chosen auditor for the MLC. This legislation is necessary to balance the power of songwriters with that of music publishers within the MLC to ensure accountability and fair compensation.