Two Nuances of Intellectual Property Law

Tuesday, June 25, 2013

Two recent U.S. Supreme Court decisions highlight some of the nuances of intellectual property (IP) law. At first glance, they could seem like two different sides of a similar doctrine but, as in most aspects of IP law, the intricacies make all the difference.

The first decision dealt with the reselling of copyrighted material. In Kirtsaeng vs. John Wiley & Sons, the Court ruled in favor of Supap Kirtsaeng, who imported textbooks that had lawfully been printed and sold overseas by a U.S. publisher. Outside the United States, they sold for a lower price. Kirtsaeng brought them there and sold the books here on eBay. The publisher, John Wiley & Sons, argued that this constituted copyright infringement, but the Supreme Court found in favor of Kirtsaeng, citing the first-sale doctrine, which states that the legal purchaser of a copyright-protected item may dispose of that property in almost any way he or she chooses.

The second case dealt with the duplication of patented products. Bowman vs. Monsanto Co., et al, represented a decision about products that are reproduced from a patented product. The item in question is a genetically modified form of soybean that Monsanto developed to resist its own herbicide, Roundup. Its use means that farmers can spray the crop with Roundup to kill the weeds, but the soybean plant will not be killed. The patented, Roundup-resistant soybean is called Roundup Ready. Farmers who purchase Roundup Ready seeds enter into a licensing agreement that gives them the right to grow one season of crops from the beans, but does not allow them to use seeds harvested from those crops to grow more Roundup Ready soybeans or to sell Roundup Ready seeds to anyone else for planting.

An Indiana farmer named Vernon Bowman tried to get around this licensing agreement by buying soybeans that were meant to be consumed, not planted, from a grain elevator. He then planted all the soybeans, and sprayed the plants with Roundup. Some plants died because of contact with the herbicide. The ones that survived, he knew, came from Roundup Ready soybeans. He harvested the seeds from these plants and grew a new crop.

Bowman argued that the beans he’d planted didn’t infringe Monsanto’s patent, and he based his argument on a legal rule called the exhaustion doctrine, which covers the resale of items. The exhaustion doctrine has a kinship with the first-sale doctrine of copyrighted material mentioned above. It states that someone who sells a patented item usually can’t enforce the patent against those to whom the item is resold. However, the Supreme Court unanimously agreed that the exhaustion doctrine applies to the product itself, and not to copies of a product. So duplicating a patented product is not permissible under the exhaustion doctrine, whether it is a biological product like a seed, or a mechanical object like an invention.  The Court was careful to leave open the application of this doctrine to other sorts of reproducible technology, such as computer software.

It’s clear from these two decisions that IP law is ever-evolving as our world becomes more interconnected and more technologically sophisticated. At B&W, it’s our job and our passion to stay on top of every precedent and every new twist and turn that IP law takes.