Supreme Court Considers Intellectual Property Issues In Current Term

During the current term, the Supreme Court has either heard or will be hearing oral arguments, and has either issued or will be issuing its ruling for three important intellectual property cases. In Kirtsaeng v. John Wiley and Sons, the Court issued its ruling regarding the "first sale" doctrine for copyrighted foreign works. In Association for Molecular Pathology v. Myriad Genetics, Inc., the Court heard oral arguments about its determination of whether or not human genes are patentable. And finally, in Bowman v. Monsanto, the Court has heard oral arguments and will be issuing its decision with regards to patent exhaustion as it pertains to selfreplicating technologies.

Supreme Court Upholds First Sale Doctrine for Foreign Works

On March 19, 2013, the U.S. Supreme Court issued its ruling in Kirtsaeng v. John Wiley & Sons, Inc., upholding the application of Section 109(a)'s "first sale" doctrine, which allows for legally acquired copyrighted work to be resold by their owners, to works manufactured overseas.1 In a 6-3 decision authored by Justice Breyer, the Court rejected the Second Circuit's attempt to geographically limit the scope of the words "lawfully made under this title" within Section 109(a).

The Court explained that §109(a)'s language in context with the common-law history of the "first sale" doctrine favored a non-geographical interpretation,2 and that a contrary holding would expose normally germane business transactions involving copyrighted works to the disruptive threat of infringement suits.3 Ultimately, the Court reasoned that the probable transaction costs arising from such a narrow interpretation of the "first sale" doctrine, requiring entities to procure authorization from copyright owners prior to the distribution and display of a work, would lead to "intolerable consequences" and an "absurd" perception "that copyright owners can exercise downstream control even when it authorized the import of first sale."4 The Court acknowledged that its decision would likely hinder the ability for Wiley and other publishers to maintain the preferred division between foreign and domestic markets, which allows publishers to charge different prices for the same items solely based on geography.5 By contrast, resellers of copyrighted works, like Kirtsaeng, can take comfort in the Court's unwillingness to bestow on copyright owners the financial gain that previously accompanied the strategic segmentation of international and domestic...