Genetic Engineering, Self-Replicating Technologies–and Used Books: Intellectual Property Law in 2013

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| February-25-2013 | ,

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Supreme Court cases reflect changing times.  Suffolk University Law Review began in 1967, the year of Loving v. Virginia, [1] a civil rights case that struck down state laws barring interracial marriage.  In 2013, the Court has before it cases to determine the validity of federal and state laws limiting same-sex marriages. [2]

 

This piece looks at a different sector of the Court’s docket.  Not coincidentally, Suffolk University Law Review Online begins as courts are paying increased attention to issues of high technology.  The Supreme Court presently has four intellectual property cases pending (and two just decided), after decades in which it commonly considered one or two such cases per year.

 

Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office [3] addresses an issue with philosophical implications:  Are human genes patentable?  The case represents a recent surge of Supreme Court patent cases.  In 1980, Diamond v. Chakrabarty held that a living thing, a genetically engineered, “human-made micro-organism” is patentable subject matter. [4] In 1981, Diamond v. Diehr established that computer-implemented inventions could be patentable. [5]  The invention in question was a process for curing rubber, involving measuring certain temperatures and using a computer to calculate the appropriate length of time to run the curing process.  Those cases also established three categories of nonpatentable subject matter:  abstract ideas, laws of nature, and natural phenomena.  The Supreme Court then did not address the issue of patent subject matter for decades, leaving the lower courts struggling to define the boundaries of those three vague exceptions.

 

In 2010, Bilski v. Kappos held that a general process for using commodity exchange transactions to hedge risks was an unpatentable abstract idea. [6]  In 2012, Mayo Collaborative Services v. Prometheus Laboratories, Inc. held unpatentable a diagnostic method, which consisted essentially of measuring the level of a metabolite in a patient’s blood and adjusting the dose of a drug accordingly. [7] The Court held that this method was unpatentable as encompassing a law of nature combined with “well-understood, routine, conventional activity previously engaged in by scientists who work in the field.” [8]

 

The Federal Circuit in Ass’n for Molecular Pathology held that Bilksi and Prometheus did not govern the patentability of genes, on the theory that its analysis did not apply to the third category of unpatentable subject matter:  products of nature. [9]  Rather, the Federal Circuit held that human genes were patentable—not in natural form in the body—but in the isolated form captured in a laboratory.  The isolated form, the lower court ruled, was a different molecule than the natural form and so not simply a product of nature. [10]  If, however, the Supreme Court does extend the general approach of Prometheus, it might well hold that the gene itself is an unpatentable product of nature, and the isolated form is simply the result of “well-understood, routine, conventional activity previously engaged in by scientists who work in the field.” [11]

 

Notable also is the fact that Ass’n for Molecular Pathology will not answer the broad question of whether human genes are patentable?  The facts of the case raise only the issue of whether human DNA, once isolated, is patentable.  But “human genes” could encompass many other issues:  Whether synthetic genes put into humans are patentable; whether DNA isolated from fossil ancestors of homo sapiens are patentable; whether genes from another species combined with human genes are patentable; and whether human DNA that did not code for a gene—but was nevertheless useful—was patentable.

 

Genes are also at the heart of Bowman v. Monsanto Co., [12] in which the question is:  “Whether the Federal Circuit erred by (1) refusing to find patent exhaustion in patented seeds even after an authorized sale and by (2) creating an exception to the doctrine of patent exhaustion for self-replicating technologies?” [13]  In plain English, whether a farmer who purchases patented genetically modified seeds may plant the seeds that grow from the resulting plant.  Such self-replicating technologies indeed raise new questions for the law.

 

Software can also fall into that category, and raises analogous issues.  An important issue is whether someone who buys software may resell it without infringing the copyright in the software.  Courts so far have enforced limitations on resale incorporated in intellectual property licenses, whether for patented seeds or copyrighted software.  By contrast, copyright holders of yore were not able to shut down markets in used books.

 

John Wiley & Sons, Inc. v. Kirtsaeng [14] reflects the increasing internationalization of trade and communications. [15]  The case addresses the question of whether the importation of books printed abroad under license from a copyright owner infringes the copyright owner’s exclusive right to distribute the work in the United States.  A student from Thailand noticed how much more expensive textbooks were in the United States than their foreign counterparts.  The enterprising student imported and sold thousands of books until publishers successfully sued him for copyright infringement.  If a book is printed and sold in the United States, the purchaser may freely resell it under the “first sale” doctrine.  But the Second Circuit held that first sale does not apply to books printed outside the United States, even if authorized by the copyright holder. [16]  The case turns on laborious issues of statutory interpretation and has good policy arguments on both sides.  If first sale does not apply to foreign works, then museums in the United States are infringing by displaying foreign-made artworks they own, such as Picasso’s paintings.  If first sale does apply, then perhaps United States publishers will no longer sell less expensive editions abroad, hurting education in developing countries.

 

Federal Trade Commission v. Watson Pharmaceuticals, Inc. addresses a different aspect of the control over the market for a product covered by intellectual property. [17]  When patented pharmaceuticals are reaching the end of their patent term, patent holders often sue makers of the generic versions for patent infringement.  Sometimes those suits are resolved in a counterintuitive way:  The patent holder pays the accused infringer as part of the settlement.  Such “reverse settlement payments” look like antitrust violations:  A monopolist paying a potential competitor to stay out of the market.  But some courts have tended to uphold such settlements, on the theory that they encourage settlement of litigation and offer an incentive to develop generic versions of patented drugs.  Watson will address the elementary question of how closely courts will scrutinize such transactions under antitrust laws.

 

Gunn v. Minton addressed an institutional issue, holding that state courts have jurisdiction to hear legal malpractice claims involving patents. [18]  Exclusive jurisdiction in patent and copyright cases has made intellectual property primarily a federal area of the law.  The mere fact that Gunn reached the Supreme Court demonstrates how that has extended even to state law claims that involve federal intellectual property rights, such as the claim that a patent lawyer negligently drafted the claims in a patent application or gave faulty advice in patent litigation.  The Supreme Court unanimously held that exclusive federal jurisdiction over patent law does not deprive state courts from exercising jurisdiction over state law claims in a case involving a patent. [19]  Gunn echoes the issues of federalism in 1967 and today, whether and how states and the federal government could regulate marriage.

 

Already, LLC v. Nike, Inc. addressed the question of how easy it should be for someone to sue himself or herself. [20]  Among legal entitlements, intellectual property rights are notoriously vague, ambiguous, and uncertain.  Rights holders often assert infringement without filing suit, such as to gain leverage in licensing negotiations.  The accused party may then seek to clarify rights–by suing itself by bringing a declaratory judgment action seeking a court order that it is not infringing.  The party asserting rights will then backpedal, arguing there is no controversy and so no justiciable case.  Already held that there was no jurisdiction where the trademark holder had filed a covenant not to sue the other party. [21]

 

These high-profile cases give a flavor of the role that technology and intellectual property have come to play in today’s society.  Suffolk University Law Review Online will reflect and embody these changes.


Preferred Citation:

Stephen McJohn, Commentary, Genetic Engineering, Self-Replicating Technologies–and Used Books: Intellectual Property Law in 2013, 1 Suffolk U. L. Rev. Online  5 (Feb. 25, 2013), http://www.suffolklawreview.org/mcjohn-ip2013.


Author Notes:

Stephen McJohn, Professor of Law, Suffolk University Law School.


Footnotes:

  1. 388 U.S. 1 (1967).
  2. See United States v. Windsor, 699 F.3d 169 (2d Cir. 2012), cert. granted, 133 S. Ct. 786 (2012) (challenging validity of federal Defense of Marriage Act, which limits interstate recognition of same-sex marriages); Perry v. Brown, 671 F.3d 1052 (9th Cir. 2012), cert. granted sub nom Hollingsworth v. Perry, 133 S. Ct. 786 (2012) (addressing constitutionality of state constitutional prohibition of same sex marriages).
  3. 689 F.3d 1303 (Fed. Cir. 2012), cert. granted in part sub nom. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 694 (2012).
  4. 447 U.S. 303, 303 (1980).
  5. 450 U.S. 175, 191-93 (1981).
  6. 130 S. Ct. 3218, 3231 (2010).
  7. 132 S. Ct. 1289, 1297 (2012).
  8. Id. at 1298.
  9. Ass’n for Molecular Pathology v. United States Patent and Trademark Office, 653 F.3d 1329, 1350 (Fed. Cir. 2011), vacated, 132 S. Ct. 1794 (2012), cert. granted in part, 133 S. Ct. 694 (2012).
  10. See id.
  11. Prometheus, 132 S. Ct. at 1297-98.
  12. 657 F.3d 1341 (Fed. Cir. 2011), cert. granted, 132 S. Ct. 420 (2012).
  13. Petition for Writ of Certiorari at i, Bowman, 657 F.3d 1341 (No. 11-796), 2011 WL 6468161 at *i.
  14. 654 F.3d 210 (2d Cir. 2011), cert. granted, 132 S. Ct. 1905 (2012).
  15. See id.
  16. See id. at 216.
  17. 677 F.3d 1298 (11th Cir. 2012), cert. granted, 133 S. Ct. 787 (2012).
  18. 355 S.W.3d 634 (Tex. 2011), rev’d, No. 11-1118, 2013 WL 610193 (U.S. Feb. 20, 2013).
  19. Gunn v. Minton, No. 11-1118, 2013 WL 610193, at *10 (U.S. Feb. 20, 2013).
  20. 133 S. Ct. 721 (2013).
  21. See Nike, Inc. v. Already, LLC, 663 F.3d 89, 89 (2d Cir. 2011), aff’d, 133 S. Ct. 721 (2013).
Author: Stephen McJohn

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