Technology + Law®

A long standing principle of copyright law is that a purchaser of a copyrighted work has the right to resell the item without obtaining permission from the copyright owner.  So, it is permissible, for example, to resell a college text book at a used book store. This legal principle, known as the ‘first sale doctrine’ is codified in Section 109(a) of the Copyright Act.  However, Section 602(a)(1) of the Copyright Act, prohibits the importation of a work without the authority of the copyright’s owner – and the interplay between these sections of the Copyright Act is the issue in the  case Kirtsaeng v. John Wiley & Sons Inc., to be decided by the U.S. Supreme Court.

The facts are as follows: Supap Kirsaeng came to the United States as a college student in 1997. While in this country Mr. Kirsaeng started a side business importing from his native Thailand college text books which he then re-sold on Web sites such as eBay. For various reasons, publishers charge much less for books in developing countries such as Thailand than in the United States.  When publisher Wiley & Sons discovered Mr. Kirsaeng’s business, they filed suit in federal court alleging a violation of Section 602(a)(1) of the Copyright Act, whereas the defendant argued that he had a right to resell the books based on the first sale doctrine. The federal district court held for Wiley & Sons, and on appeal the same result. Kirsaeng then appealed to the  U. S. Supreme Court.

If Kirsaeng prevails, publishers such as Wiley & Sons will be less likely to supply books at discounted prices in Third World countries – and this would be unfortunate.

However, as some commentators have noted, if the decision is upheld, the case could have certain unintended consequences. For example, would it be unlawful to import a copyrighted work, such as a book or magazine? Should such items  be seized at customs when a person enters the U.S.?

In my opinion, any “solution” should be narrowly tailored, but it appears the real problem lies with the Copyright law.  Congress should address the issue and amend the Copyright Act to allow publishers to go after re-sellers but make exceptions for  importation of copyrighted material which is done for personal use.

This week a federal appeals court indicated that it may not retreat from its ruling last year that isolated human genes can be patented. The U.S. Court of Appeals for the Federal Circuit is revisiting its 2-1 ruling from last July that upheld Myriad Genetics Inc.’s patents on two genes that can tell whether a woman faces greater risk of developing breast cancer or ovarian cancer. Myriad’s patents allow the company to act as the sole provider of genetic screenings for the diseases.

The main issue in arguments before the Court of Appeals is whether isolated DNA is ineligible for patent protection as a product of nature. Myriad’s attorneys argue that the patent claim is not for something that is naturally occurring, but for a man-made creation that was the direct result of human ingenuity.

The ACLU disagreed, arguing that Myriad is trying to patent “products of nature” which cannot be patented. The group, along with others, claims that genetic patents stymie medical treatment and further scientific research. The Myriad case has split the medical community with some scientists saying they have been obstructed in their quest for new medicines and treatments because they fear coming up against demands for royalties or letters demanding they stop using patented inventions.

Several months ago the Supreme Court told the Federal Circuit to reconsider the Myriad case in light of a recent ruling that restricted rules on medical-testing patents. Oral arguments for that rehearing took place last week and the panel of judges indicated from their questioning that their views may not have changed.

For instance, Judge Alan Lourie again made comments indicating that he agreed with Myriad. He went on to say that the process of extracting and isolating a gene from the human body makes the gene chemically distinct from the DNA that exists naturally.

The other judge that sided with Myriad, Kimberly Moore, indicated that the U.S. Patent and Trademark Office has allowed patents on DNA sequences for decades and said doing anything to harm that industry risked potential large losses of money. Judge Moore did voice concerns over whether some of Myriad’s claimed inventions are really patentable, leaving open the door for a reversed decision.

A final ruling by the Court of Appeals is expected in the coming months and no matter how the case turns out most everyone expects that the loser will appeal to the Supreme Court.

Source: “Myriad Defends Patent Claims on Genetic Material in Court Case,” by Victoria Slind-Flor, published at Businessweek.com.

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The big patent infringement trial between Apple and Samsung kicked off earlier this week in a California court. With infringement claims pending against both huge tech companies, billions of dollars are at stake.

The trial can be quickly summarized by glancing at the first few lines in each company’s pre-trial brief. Apple says that Samsung is on trial because it made a deliberate decision to copy Apple’s incredibly popular iPhone and iPad devices. For its part, Samsung says that the suit exists because Apple has sought to unfairly stifle legitimate competition, thus limiting consumer choice in a highly profitable segment of the tech industry.

But before any of the meat of the case can be heard, both sides need to agree on where to sit in court, something that is proving far more complicated than you might imagine. Samsung has complained that its case against Apple is being referred to as Apple v. Samsung, which the company is suggesting could lead the jury to see it as the defendant in the patent suit. Samsung points out they are not just sitting on their hands, defending claims by Apple, oh no, they are busy lobbing bombs of their own and have filed a countersuit against Apple.

Given the countersuit, Samsung’s lawyers have asked for permission to switch seats with Apple’s lawyers when it’s their turn to present evidence. The point, they say, is to ensure that the jury is clear about who is suing whom. The filing by Samsung said:: “Both parties will at times be acting as plaintiffs and both as defendants, and it is therefore important that both parties are treated the same.”

Samsung suggested that both parties should be treated equally with regard to where they sit in the presence of the jury while presenting their cases. Samsung’s proposed musical chairs would, they claim, “mitigate any prejudice to Samsung that may result from Apple being in closer proximity to the jury throughout the trial.”

Apple, unsurprisingly, disagreed. The company said that Samsung’s request to sit nearer to the jury is both unnecessary and inconvenient. Apple went on to say that it is the plaintiff in the case, not Samsung, as it was the first to file a complaint. Apple requested that it be made clear that Samsung be referred to as a “defendant-counterclaimant.”

Judge Lucy Koh issued a final ruling on the issue, hoping to move things along, which denied Samsung’s request for musical chairs. However, Judge Koh did not leave Samsung empty-handed, she made sure that the sign outside the courtroom has been adjusted to read both Apple v. Samsung and Samsung v. Apple.

Source: “Samsung, Apple Even at Odds Over Where They Will Sit at Trial,” by Ina Fried, published at AllThingsD.com.

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• The Patent Office has announced that it is opening three new satellite offices – in Dallas, Denver, and Silicon Valley. A Detroit satellite office is already scheduled to open July 23. The new hubs would hire about 100 examiners each, and, more importantly, serve as places where examiners who work at home can periodically meet without having to travel to Alexandria, Virginia. Patent attorneys would benefit because they would be able to more easily schedule examiner interviews earlier in the day.

• According to a statement, Yahoo and Facebook announced Friday they have “entered into definitive agreements that launch a new advertising partnership, extend and expand distribution arrangements, and settle all pending patent claims between the companies.”  The deal has been praised by analysts as likely being good for both sides.

• The judge who tossed Apple’s case against smartphone rival Motorola has been quoted as questioning the merits of software patents – and indeed, most patents except for those for pharmaceuticals.  As reported by Reuters, Judge Posner, of the 7th U.S. Circuit Court of Appeals in Chicago, stated, “It’s not clear that we really need patents in most industries.”

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Besides Steve Jobs, who was of Syrian extraction, one of the most notable Syrian inventor was Issa Abboud, 27, who was the recipient of a WIPO Gold Medal Award for “the world’s youngest inventor”, and who was issued over 100 patents. To put this in perspective, since the formation of the Syrian Patent Office in 1946, there have only been about 5,700 Syrian patents issued, and Mr. Abbound was issued about 5% of them. Unfortunately, it has been reported that Mr. Abboud was shot dead in his car by criminal armed gangs at al-Nozha neighborhood in Homs on Sunday.

In the aftermath of Google’s $12.5 billion acquisition of Motorola Mobility smartphone business, seen by many as a way for Google to obtain Motorola’s 17,000 patents, analysts are looking at other companies with large patent portfolios. In a recent Bloomberg News article, it was noted that Kodak’s patent portfolio is estimated at about $3 billion while the market value of the company is a mere $600 million. Most of Kodak’s patents relate to digital imaging technology. Potential buyers include Microsoft and Samsung. Meanwhile, it has been reported that Kodak is looking at ways to monitize its digial imaging patents, including possibly auctioning them off.

Kodak was granted its first patent (No. 306,594) in 1884, for “Photographic Film”: