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Kirtsaeng Case Latest in Trend: Supreme Court is Taking More Intellectual Property Cases


Over at SCOTUSblog, Ronald Mann recently blogged about the rise in IP cases being heard before the U.S.’s highest court.

What we can observe from the Court’s docket is that the number of intellectual property cases has been increasing in recent decades, even as the Court’s docket has shrunk.  To be sure, the number of cases is so small that it is difficult without looking at the numbers over a long period of time to be sure that these numbers represent real long-term trends.  Still, the presence of four core IP cases among the 48 grants to date for OT2012 (Kirtsaeng v. John Wiley & Sons, Already LLC v. Nike, Bowman v. Monsanto Co., and Gunn v. Minton), 8% of the argument calendar, is remarkable.  For comparison, I count 5% IP cases in OT2011 (4/75) and 6% in OT 2010 (5/84).  To get a sense for longer trends, ten years ago the Court decided 3 IP cases out of 73 opinions (4%) and twenty years ago only 2 out of 114 (2%).

In the most recent manifestation of this trend, yesterday — while the District of Columbia was in the midst of being buffeted by Hurricane Sandy — the diligent folks over at the Supreme Court heard oral arguments in Kirtsaeng v. John Wiley & Sons: a case that seeks to clarify the application of copyright law’s first-sale doctrine, which will have major implications for Internet e-Commerce platforms.  (For more on the case, you should read this DisCo post by Ali Sternburg — who braved the hurricane to attend the arguments.  Also, in true DisCo fashion, she used Uber to get to and from the courthouse. The LA Times has a great op-ed on the case as well.)

As patent wars engulf our nations high-tech industry and copyright law strains to deal with the great big copy machine that is the Internet, it only makes sense that the Supreme Court — who as Mann points out was reticent to take on IP cases just a decade ago — step up to review of our IP system, as it is so important to the “new economy” and the Court likes to tackle “systemic” issues.

As Mann notes, many of the Supreme Court Justices seem to have lost faith in the Federal Circuit’s reading of patent law:

All who read the Court’s IP cases know that many of the Justices seem to have lost confidence in the Federal Circuit, at least in part because of an excessive tendency toward a broad interpretation of patent rights.

Furthermore, as the Justices’ questioning of Wiley’s lawyer, Ted Olson, seems to indicate, the Court appears deeply concerned about the negative economic effects of broadly interpreting copyright law.

Going forward, as the “new economy” keeps pulling at the fraying seams of 20th Century jurisprudence, I would not be surprised to see this trend continue.

As for what to watch in the near term, CLS Bank v. Alice is scheduled for an en banc rehearing at the Federal Circuit (Amicus Briefs due December 7, if anybody wants to be a “friend” and help the court out).  The case is set to address two questions:

1 – What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

2 – In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

The patentability of software — once a no-no until the Federal Circuit controversially reversed decades old precedent — has been one of the trickiest questions in patent law over the last decade.  The Supreme Court even took a case on the matter in 2010 (Bilski) — but then punted (or, in legal terms, “ruled narrowly”).  In the CLS case, the dissenting judge called out the majority for ignoring Supreme Court guidance. (note: Typical appellate cases are handled by 3 judge panels.  En banc rehearings allow the entire circuit to review controversial cases.)   Because of the controversial subject matter, it is possible that — whichever way the CAFC rules — that this case could find its way into the Supreme Court docket in the near future.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.