Last week, ISCOTUS was a sponsor of Chicago-Kent College of Law’s Supreme Court Intellectual Property Review (SCIPR), which highlighted intellectual property cases before the Supreme Court last Term and discussed implications for the coming Term. ISCOTUSnow presents a summary from each session of the conference, with help from Daniel Saunders of the Chicago-Kent faculty blog.
Chicago-Kent IP Fellow Christi Guerrini moderated this panel on a case regarding whether federal courts have exclusive jurisdiction over cases involving patent law, even when a patent issue is not the primary issue—which in this instance was a claim of legal malpractice. The Supreme Court decided against elevating patent malpractice claims to the federal level, recognizing the authority of state courts to decide state law claims with embedded patent issues. Panelists Jane Webre (counsel to Gunn) and Ronald Mallen (amicus curiae) drew out the implications of the decision; in particular, Webre noted that more patent-related claims will likely remain at the state rather than federal court level and that this had in fact been standard practice prior to a 1988 decision that broadly expanded Federal Circuit jurisdiction (Christianson v. Colt Indus.). Both panelists agreed that this decision is unlikely to tamper with federal jurisprudence on patent issues.
In this case, the Supreme Court asked whether reverse payment agreements are per se lawful, rather than presumptively anticompetitive. The situation is a familiar one in the pharmaceutical industry, where a powerful, brand-name company with an exclusive right to sell a particular product might provide a payoff to a potential generic competitor to keep the competitor from entering the market. The court maintained that lawsuits may be brought against the brand-name manufacturers but that the payments in question are not presumptively illegal; such a distinction is to be determined by proper antitrust law scrutiny. Mark Lemley (counsel to amici curiae) and Robert Breisblatt (counsel to amici curiae) outlined the case and its implications, agreeing that the opinion does not offer much guidance for future cases but that, for the moment, it spells partial victories for the FTC and for consumers.
Professor David Schwartz moderated a panel on Already v. Nike, a case highlighting the impact of a covenant-not-to-sue on declaratory judgment jurisdiction in trademark cases. In the opinion, the Court decided unanimously that Already’s counterclaim against Nike was not sufficient to allow the District Court to exercise subject matter jurisdiction. James Dabney (counsel to Already) argued that the case was about federal court judicial power, pointing out that how cases are defined affects the scope and power with which federal courts can overturn the PTO. Professor Mark Janis joined in Dabney’s assessment that the decision will lead to closer scrutiny of covenants-not-to-sue in the future.
David Clough, Dr. Harry Ostrer (petitioner), John Hendricks (counsel to amici curiae) and Kevin Noonan (counsel to amicus curiae) participated in a panel on the popular Myriad case, which investigated the patentability of human DNA sequences. The Supreme Court ruled unanimously for the petitioner, holding that naturally occurring gene sequences (such as those Myriad had patented) are not patent eligible according to §101 of the Patent Act. However, the Court allowed that sequences refined or synthesized in a lab are not a “product of nature” and are thus patent eligible. Dr. Ostrer said he was motivated to bring the case against Myriad because “competition is a good thing; it promotes innovation.” The panel noted that patients viewed Myriad’s patents as a monopolization and commercialization of something that could otherwise lead to better health care and that the decision benefits the industry as well as patients by diversifying business and innovation. The panel also discussed both sides of the argument on whether patents incentivize research or impede discovery.
In this case, the Court examined the question of patent exhaustion in second generations of genetically modified seeds. Scott Burow, Vernon Hugh Bowman (petitioner), Mark Walters (counsel to Bowman), and Paul Wolfson (counsel to Monsanto) took part in the panel and discussed the unanimous decision, which held, in Monsanto’s favor, that the doctrine of patent exhaustion does not allow a purchaser to make copies of a patented product (i.e. planting second generation seeds) without permission from the patent holder. Bowman and Walters recounted their arguments for why they did not think Bowman had infringed Monsanto’s patent, and Wolfson noted that the decision reinforces the value of patents in biotechnology, an important issue for the economy. The panelists noted that the Court couldn’t easily draw a line as to what sort of replanting was acceptable and what wasn’t, making an “all or nothing” decision necessary.
Professor Ed Lee moderated this panel on a case regarding international copyright exhaustion and the importation of foreign-made works. In Kirtsaeng, the Court held for the petitioner that there is no geographic restriction on the “first sale” doctrine, which provides that a copyright owner maintains control of the first sale only. Specifically, the Court applied the doctrine to copies of a copyrighted work that were acquired abroad but resold in the US. Professors Chris Buccafusco and Bart Lazar joined the panel to debate whether the Court’s interpretation of the first sale doctrine was correct (as it diverged from previous interpretations, especially in the understanding of the phrase in the Copyright Act that reads “lawfully made under this title”) and to discuss its possible implications.
Judge Diane Wood, Keynote
Judge Wood used the title of her speech to ask a question: is it time to abolish the Federal Circuit’s exclusive jurisdiction in patent cases? Her answer was a resounding yes. She acknowledged the reasoning behind the exclusive federal jurisdiction – national uniformity, efficiency, etc – but posed a question: “Uniformity is great, but what if it’s uniformly bad?” Her first point as to why the system should be improved came from the role of failure in successful design. The Supreme Court gets value from the many different opinions that come from the lower courts because they provide different perspectives on the issue in question, even if the Court concludes that some of them are wrong. Mistakes teach valuable lessons. She argued, for example, that different viewpoints would prove useful in non-obviousness and force everyone to sharpen their thinking. Judge Wood also responded to those who contend that the Federal Circuit’s special expertise is necessary in the particularly technical and complex arena of patent law. She argued that patent law is no more difficult and no more technical than many areas of the law that the appellate courts handle just fine and she noted that the district courts seem to manage patent cases well at the trial level.
Preview of 2013 Term
The last session of SCIPR was hosted by ISCOTUS Director Carolyn Shapiro. She was joined by Steven Loy, Paul Wolfson, Jim Dabney, and Mark Lemley to discuss the upcoming Supreme Court IP cases. The first IP case that the Court has granted is Lexmark v. Static Control Components, which will be argued in December. The issue at stake in this case is who has the standing to sue for false advertising. (Article III standing is not at issue; the case is about prudential standing.) Steven Loy, the counsel to Lexmark, commented on Lexmark’s position that the statute should be understood to require a relationship between the injury and the purpose of the law. Direct competitors might therefore have standing, but not anyone who could allege a possible injury. The second case discussed was Medtronic v. Boston Scientific Corp. The question in Medtronic is who has the burden of proof when a licensee of a patent sues the patent holder, seeking a declaratory judgment of invalidity. Paul Wolfson, counsel to Medtronic, explained the argument for why the burden of proof should always be on the patent holder. The discussion then focused on select cert petitions the Court may choose to take up. (None of those discussed have yet been granted or denied.) This led into a discussion on how to balance substantive knowledge of facts and law with the expertise of the Court – namely, whether trial counsel or a Supreme Court expert should argue before the Court. Although there were disagreements, everyone did agree that regardless of who does the arguing, it is useful to consult with someone experienced in the Court. Finally, the group used Judge Wood’s keynote as a jumping off point to discuss what the Supreme Court should take into account when deciding whether to grant certs in cases coming from the Federal Circuit, since it exclusive jurisdiction means that there are no circuit splits.