Business Law Chapter 39 Homework Act Since 1952 Subject Some Exceptions The

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CASE 39-3
SUPAP KIRTSAENG v. JOHN WILEY & SONS, INC.
Supreme Court of the United States, 2013
568 U.S. ____, 133 S.Ct. 1351, 185 L.Ed.2d 392
http://scholar.google.com/scholar_case?case=15712401143530412161&q=133+S.Ct.+1351&hl=en&as_sdt=2,34
Breyer, J.
[The business of respondent, John Wiley & Sons, Inc., includes publishing academic
textbooks. Wiley often assigns to its wholly owned foreign subsidiary, Wiley Asia, rights to
publish, print, and sell a foreign edition of Wiley’s English language textbooks abroad. Each
copy of a Wiley Asia foreign edition will likely contain language making clear that the copy
is to be sold only in a particular country or geographical region outside the United States.
Thus there are two essentially equivalent versions of a Wiley textbook, each version
Petitioner, Supap Kirtsaeng, a citizen of Thailand, moved to the United States in
1997 to study mathematics at Cornell University. He paid for his education with the help of
a Thai Government scholarship which required him to teach in Thailand for ten years on his
return. Kirtsaeng successfully completed his undergraduate courses at Cornell, successfully
completed a Ph. D. program in mathematics at the University of Southern California, and
then, as promised, returned to Thailand to teach. While he was studying in the United States,
Kirtsaeng asked his friends and family in Thailand to buy copies of foreign edition English
language textbooks at Thai bookstores, where they sold at low prices, and mail them to him
in the United States. Kirtsaeng would then sell them, reimburse his family and friends, and
keep the profit.
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infringed Wiley’s American copyrights by selling and importing without authorization
copies of eight of Wiley’s copyrighted titles and assessed statutory damages of $600,000
($75,000 per work). On appeal, the Second Circuit affirmed, concluding that the “first sale”
doctrine does not apply to copies of American copyrighted works manufactured abroad.]
Section 106 of the Copyright Act grants “the owner of copyright under this title”
certain “exclusive rights,” including the right “to distribute copies … of the copyrighted
Section 109(a) sets forth the “first sale” doctrine as follows:
“Notwithstanding the provisions of section 106(3) [the section that grants the owner
exclusive distribution rights], the owner of a particular copy or phonorecord lawfully made
under this title … is entitled, without the authority of the copyright owner, to sell or
otherwise dispose of the possession of that copy or phonorecord.” (Emphasis added.)
Thus, even though §106(3) forbids distribution of a copy of, say, the copyrighted
novel Herzog without the copyright owners permission, §109(a) adds that, once a copy of
Herzog has been lawfully sold (or its ownership otherwise lawfully transferred), the buyer of
that copy and subsequent owners are free to dispose of it as they wish. In copyright jargon,
the “first sale” has “exhausted” the copyright owners §106(3) exclusive distribution right.
What, however, if the copy of Herzog was printed abroad and then initially sold with
the copyright owners permission? Does the “first sale” doctrine still apply? Is the buyer,
like the buyer of a domestically manufactured copy, free to bring the copy into the United
States and dispose of it as he or she wishes?
To put the matter technically, an “importation” provision, §602(a)(1), says that
“[i]mportation into the United States, without the authority of the owner of copyright under
this title, of copies … of a work that have been acquired outside the United States is an
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In Quality King Distributors, Inc. v. L’anza Research Int’l, Inc., [citation], we held
that §602(a)(1)’s reference to §106(3)’s exclusive distribution right incorporates the later
subsections’ limitations, including, in particular, the “first sale” doctrine of §109. Thus, it
might seem that, §602(a)(1) notwithstanding, one who buys a copy abroad can freely import
that copy into the United States and dispose of it, just as he could had he bought the copy in
the United States.
But Quality King considered an instance in which the copy, though purchased
abroad, was initially manufactured in the United States (and then sent abroad and sold). This
case is like Quality King but for one important fact. The copies at issue here were
Putting section numbers to the side, we ask whether the “first sale” doctrine applies
to protect a buyer or other lawful owner of a copy (of a copyrighted work) lawfully
manufactured abroad. Can that buyer bring that copy into the United States (and sell it or
give it away) without obtaining permission to do so from the copyright owner? Can, for
example, someone who purchases, say at a used bookstore, a book printed abroad
subsequently resell it without the copyright owners permission?
In our view, the answers to these questions are, yes. We hold that the “first sale”
doctrine applies to copies of a copyrighted work lawfully made abroad.
* * *
We must decide whether the words “lawfully made under this title” restrict the scope
of §109(a)’s “first sale” doctrine geographically. * * *
Under any of [the] geographical interpretations, §109(a)’s “first sale” doctrine would
* * *
In our view, §109(a)’s language, its context, and the common-law history of the “first
sale” doctrine, taken together, favor a non-geographical interpretation. * * * We
consequently conclude that Kirtsaeng’s nongeographical reading is the better reading of the
Act.
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Other provisions of the present statute also support a nongeographical interpretation.
* * *
* * *
The “first sale” doctrine is a common-law doctrine with an impeccable historic
pedigree. * * *
* * *
The common-law doctrine makes no geographical distinctions * * *
* * *
Associations of libraries, used-book dealers, technology companies, consumer-goods
retailers, and museums point to various ways in which a geographical interpretation would
fail to further basic constitutional copyright objectives, in particular “promot[ing] the
Progress of Science and useful Arts.” U. S. Const., Art. I, §8, cl. 8.
The American Library Association tells us that library collections contain at least 200
million books published abroad (presumably, many were first published in one of the nearly
* * *
Technology companies tell us that “automobiles, microwaves, calculators, mobile
phones, tablets, and personal computers” contain copyrightable software programs or
packaging. [Citations.] Many of these items are made abroad with the American copyright
holders permission and then sold and imported (with that permission) to the United States.
[Citation.] A geographical interpretation would prevent the resale of, say, a car, without the
permission of the holder of each copyright on each piece of copyrighted automobile
software. * * * Without that permission a foreign car owner could not sell his or her used
car.
Retailers tell us that over $2.3 trillion worth of foreign goods were imported in 2011.
[Citation.] American retailers buy many of these goods after a first sale abroad. [Citation.]
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Thus, we believe that the practical problems that petitioner and his amici [parties
filing “friends of the court” briefs] have described are too serious, too extensive, and too
likely to come about for us to dismiss them as insignificant—particularly in light of the
evergrowing importance of foreign trade to America. [Citation.] See The World Bank,
Imports of goods and services (% of GDP) (imports in 2011 18% of U. S. gross domestic
Infringement and Remedies
To sue for infringement the copyright must be registered with the Copyright
Oce unless the work is a Berne Convention work whose country of origin is
not the United States. Infringement occurs when somebody exercises the
rights exclusively reserved for the copyright owner without authorization.
Intent is not necessary for infringement. Remedies after registration include:
(1) injunction; (2) impoundment and destruction of the infringing articles; (3)
*** Chapter Outcome ***
Explain what patents protect and the remedies for infringement.
E. PATENTS
The U.S. Constitution grants Congress the power “to promote the Progress of
Science and useful Arts, by securing for limited Times to . . . Inventors the
exclusive Right to their . . . Discoveries.” A patent is the exclusive right to
make, use, or sell an invention to the absolute exclusion of others. The
patent owner may also pro,t by selling the patent or by licensing others to
use the patent on a royalty basis. The patent may not be renewed, however:
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upon expiration, the invention enters the “public domain,” and anyone may
use it.
Patentability
Any new and useful process, machine, manufacture, or composition of
matter or any new and useful improvement thereof may be patented as a
utility patent. Naturally occurring substances and fundamental truths or
ideas are not patentable. To be patentable as a utility patent, the process,
machine, manufacture, or composition must be (1) novel; (2) useful; and (3)
nonobvious.
CASE 39-4
ASSOCIATION FOR MOLECULAR PATHOLOGY v. MYRIAD
GENETICS, INC.
Supreme Court of the United States, 2013
569 U. S. ____, 133 S.Ct. 2107
http://scholar.google.com/scholar_case?q=Association+for+MMolecular+Pathology+v.+Myriad+Genetics,
+Inc.&hl=en&as_sdt=4,60&case=16946808550965094679&scilh=0
Thomas, J.
Respondent Myriad Genetics, Inc. (Myriad), discovered the precise location and sequence of
two human genes, mutations of which can substantially increase the risks of breast and
ovarian cancer. Myriad obtained a number of patents based upon its discovery. This case
involves claims from three of them and requires us to resolve whether a naturally occurring
segment of deoxyribonucleic acid (DNA) is patent eligible under [Section 101 of the Patent
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we hold that a naturally occurring DNA segment is a product of nature and not patent
eligible merely because it has been isolated, but that cDNA is patent eligible because it is not
naturally occurring. We, therefore, affirm in part and reverse in part the decision of the
United States Court of Appeals for the Federal Circuit.
I
A
* * *
DNAs informational sequences and the processes * * * occur naturally within cells.
Scientists can, however, extract DNA from cells using well known laboratory methods.
These methods allow scientists to isolate specific segments of DNA—for instance, a
particular gene or part of a gene—which can then be further studied, manipulated, or used. It
is also possible to create DNA synthetically through processes similarly well known in the
field of genetics. * * * This synthetic DNA created in the laboratory * * * is known as
complementary DNA (cDNA).
Changes in the genetic sequence are called mutations. Mutations can be as small as the
alteration of a single nucleotide [a molecule that forms the building block for DNA]—a
change affecting only one letter in the genetic code. Such small-scale changes can produce
B
This case involves patents filed by Myriad after it made one such medical breakthrough.
Myriad discovered the precise location and sequence of what are now known as the BRCA1
and BRCA2 genes. Mutations in these genes can dramatically increase an individual’s risk
of developing breast and ovarian cancer. The average American woman has a 12– to
13–percent risk of developing breast cancer, but for women with certain genetic mutations,
the risk can range between 50 and 80 percent for breast cancer and between 20 and 50
percent for ovarian cancer. Before Myriad’s discovery of the BRCA1 and BRCA2 genes,
scientists knew that heredity played a role in establishing a woman’s risk of developing
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sought and obtained a number of patents. * * *
* * *
C
Myriad’s patents would, if valid, give it the exclusive right to isolate an individual’s BRCA1
and BRCA2 genes * * * The patents would also give Myriad the exclusive right to
synthetically create BRCA cDNA. In Myriad’s view, manipulating BRCA DNA in either of
these fashions triggers its “right to exclude others from making” its patented composition of
matter under the Patent Act. [Citation.]
II
A
Section 101 of the Patent Act provides:
“Whoever invents or discovers any new and useful ... composition of matter, or any new
and useful improvement thereof, may obtain a patent therefor, subject to the conditions
and requirements of this title.” [Citation.]
We have “long held that this provision contains an important implicit exception[:] Laws
of nature, natural phenomena, and abstract ideas are not patentable.” [Citation.] Rather,
“‘they are the basic tools of scientific and technological work’” that lie beyond the domain
of patent protection. [Citation.] As the Court has explained, without this exception, there
would be considerable danger that the grant of patents would “tie up” the use of such tools
and thereby “inhibit future innovation premised upon them.” [Citation.] This would be at
odds with the very point of patents, which exist to promote creation. [Citation.]
B
It is undisputed that Myriad did not create or alter any of the genetic information encoded in
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the BRCA1 and BRCA2 genes. The location and order of the nucleotides existed in nature
before Myriad found them. Nor did Myriad create or alter the genetic structure of DNA.
Instead, Myriad’s principal contribution was uncovering the precise location and genetic
sequence of the BRCA1 and BRCA2 genes within chromosomes 17 and 13. The question is
whether this renders the genes patentable.
Myriad recognizes that our decision in [Diamond v. Chakrabarty] is central to this
inquiry. * * * The Chakrabarty bacterium was new “with markedly different characteristics
from any found in nature,” [citation], due to the additional plasmids and resultant “capacity
for degrading oil.” [Citation.] In this case, by contrast, Myriad did not create anything. To be
* * *
C
cDNA does not present the same obstacles to patentability as naturally occurring, isolated
DNA segments. As already explained, creation of a cDNA sequence * * * results in a * * *
molecule that is not naturally occurring. Petitioners concede that cDNA differs from natural
DNA in that “the non-coding regions have been removed.” [Citation.] They nevertheless
argue that cDNA is not patent eligible because “[t]he nucleotide sequence of cDNA is
dictated by nature, not by the lab technician.” [Citation.] That may be so, but the lab
III
It is important to note what is not implicated by this decision. First, there are no method
claims before this Court. Had Myriad created an innovative method of manipulating genes
while searching for the BRCA1 and BRCA2 genes, it could possibly have sought a method
patent. But the processes used by Myriad to isolate DNA were well understood by
geneticists at the time of Myriad’s patents “were well understood, widely used, and fairly
uniform insofar as any scientist engaged in the search for a gene would likely have utilized a
similar approach,” [citation], and are not at issue in this case.
Similarly, this case does not involve patents on new applications of knowledge about the
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BRCA1 and BRCA2 genes. * * *
Procedure
The United States Patent and Trademark Oce (USPTO) issues patents upon
the basis of an application containing a speci,cation and claims. Prior to the
2011 America Invents Act, the applicant must have been the inventor. Under
the America Invents Act, a person to whom the inventor has assigned, or is
under an obligation to assign, the invention may ,le a patent application.
The USPTO determines whether the application meets the required criteria.
Applications are con,dential, but the con,dentiality ends upon the granting
Infringement
A direct infringer makes, uses, offer to sell, or sells a patented invention
without permission. An indirect infringer actively encourages another to
make, use, offer to sell, or sell a patented invention without permission. A
contributory infringer knowingly sells or supplies a part or component of a
patented invention. Good faith and ignorance are defenses to contributory
infringement. . To recover damages a patent owner must give (1) actual
Remedies
Remedies include: 1) injunctive relief; 2) damages of not less than a
reasonable royalty for use; 3) treble damages; 4) attorney’s fees in some
cases; and 5) costs.
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