2013 Supreme Court Decisions
Federal Trade Commission v. Actavis, Inc. -
Jun. 17, 2013
Federal Trade Commission v. Actavis, Inc., 133 S. Ct. 2223 (2013) (Breyer; Roberts, dissenting). For the Court’s slip opinion, click here.FTCActivis06172013
Actavis arose when the Federal Trade Commission filed suit, asserting that a “reverse payment settlement agreement” of a patent infringement suit between a drug patent owner and a generic maker violated the antitrust laws.
EXAMPLE OF “REVERSE PAYMENT SETTLEMENT.” The Court provided a simple hypothetical of a reverse payment settlement as follows:
“Company A sues Company B for patent infringement. The two companies settle under terms that require (1) Company B, the claimed infringer,not to produce the patented product until the patent’s term expires, and (2) Company A, the patentee, to pay B many millions of dollars. Because the settlement requires the patentee to pay the alleged infringer, rather than the other way around, this kind of settlement agreement is often called a `reverse payment’ settlement agreement.”
The Court noted that “the basic question here is whether such an agreement can sometimes unreasonably diminish competition in violation of the antitrust laws. See, e.g., 15 U.S.C. §1 (Sherman Act prohibition of `restraint[s] of trade or commerce’). Cf. Palmer v. BRG of Ga., Inc., 498 U.S. 46 (1990) (per curiam) (invalidating agreement not to compete).”
The Eleventh Circuit held that the agreement in question was ” `immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.’ FTC v. Watson Pharms., Inc., 677 F.3d 1298, 1312 (2012).”
The Court held that the Eleventh Circuit erred. Instead of immunity, a rule of reason approach applies. Read CPLRG 0086
Association for Molecular Pathology v. Myriad Genetics, Inc. -
Jun. 13, 2013
Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013) (Thomas). For the Court’s slip opinion, click here.AMPMyriad06132013
AMP is a first-order, high-profile decision by the Supreme Court. It was front-page news in the general media.
Like last year’s decision in Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), in which the Court held certain diagnostic methods to be unpatentable “principles of nature,” and unlike the Federal Circuit’s May 10, 2013, decision on Section 101’s application to computer-implemented methods and and systems, CLS Bank International v. Alice Corp. Pty., the Supreme Court was unanimous in an opinion by Justice Thomas.
Only Justice Scalia wrote separately, concurring because of his personal doubts about the full accuracy of the Court’s description of the molecular biology involved.
In AMP, the Court held that “genes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material.” A patent owner had “found an important and useful gene,” to wit, one the mutations of which are indicative of an increased risk of breast cancer, but “separating that gene from its surrounding genetic material is not an act of invention.” On the other hand, complementary DNA (cDNA) is “patent eligible because it is not naturally occurring.” Unlike isolated DNA (deoxyribonucleic acid), cDNA omits the non-coding regions (introns) and retains the coding regions (exons) of the natural DNA nucleotide sequence. It is not an unpatentable product of nature even though nature dictates the nucleotide sequence, to wit, one that contains the same protein-coding information, because “a lab technician unquestionably creates something new when cDNA is made.” Read CPLRG 0085
Bowman v. Monsanto Co. -
May. 13, 2013
Bowman v. Monsanto Co., 133 S. Ct. 1059 (2013) (Kagan). For the Court’s slip opinion, click here.Bowman05132013
Bowman, a unanimous opinion by Justice Kagan, addresses the issue of exhaustion in the context of a patent claiming genetically modified plant seeds. Justice Kagan has a growing reputation for authoring opinions in a lucid, clear, and concise style, which sometimes use clever phrases (such as, in this case, characterizing an infringer’s position as the “blame-the-bean defense”).
The opinion begins with a short summary of the issue and holding:
“Under the doctrine of patent exhaustion, the authorized sale of a patented article gives the purchaser, or any subsequent owner, a right to use or resell that article. Such a sale, however, does not allow the purchaser to make new copies of the patented invention. The question in this case is whether a farmer who buys patented seeds may reproduce them through planting and harvesting without the patent holder’s permission. We hold that he may not.” Read CPLRG 0084
Kirtsaeng v. John Wiley & Sons, Inc. -
Mar. 19, 2013
Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013) (Breyer; Kagan, concurring; Ginsburg, dissenting). For a slip opinion, click here.Kirtsaeng03192013
Kirtsaeng is a landmark decision addressing one of the grandest and most universal of issues of intellectual property: should there be “international exhaustion” of an intellectual property right? Can an intellectual property owner prevent importation of a product into a country when the specific product was originally made and sold in another country with the owner’s permission? Does it matter that owner qualified the permission with a territorial restriction?
Kirtsaeng is a copyright case. The Court, by a majority of six of the nine justices, held that a first authorized sale outside the United States (in Thailand) exhausted the owner’s exclusive right of distribution under United States copyright law. The case involved textbooks, but the holding will directly impact importation of a wide variety of products containing copyrighted material, including software. It may impact exhaustion as applied to the unauthorized importation of patented products made or purchased legally abroad. Read CPLRG 0083
Gunn v. Minton -
Feb. 20, 2013
Gunn v. Minton, 133 S. Ct. 1059 (2013) (Roberts). For the Court’s slip opinion, click here.Gunn02202013
Gunn addresses the question “whether a state law claim alleging legal malpractice in the handling of a patent case must be brought in federal court.” The issue arose because “Federal courts have exclusive jurisdiction over cases ‘arising under any Act of Congress relating to patents.’ 28 U. S. C. §1338(a).” The Court held that a state law legal malpractice claim did not arise under patent law, and the Texas state courts erred in dismissing the claim for lack of jurisdiction.
Importantly, though not mentioned by the Court expressly, the holding meant that the Federal Circuit would not have exclusive appellate jurisdiction over most patent law malpractice suits, a jurisdiction that it had regularly exercised over the past several years. Read CPLRG 0082