Blog Post

First Sale Doctrine Now Applies to World-Wide Sales!

October 22, 2013

Few issues have created greater confusion in copyright law than the "first sale doctrine." The doctrine is one of the specific statutory restrictions which Congress has placed on the exclusive rights of copyright owners.  The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner.  Thus, the copyright holder’s exclusive right to distribute ends once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c).

The case of Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1358 (2013) specifically deals with the issue of whether the First Sale Doctrine applies to copies of copyrighted goods lawfully made abroad.  John Wiley & Sons, Inc. is a publisher of academic textbooks who assigned to its wholly-owned foreign subsidiary the rights to print and publish foreign editions of the very same textbooks it sold in the United States.  Kirtsaeng, a student who moved to the United States from Thailand to study mathematics, discovered that the foreign-made versions of most textbooks distributed in Asia sold for a fraction of their domestic version.  He hashed an enterprising plan wherein he asked his friends and family to buy and ship to him the foreign versions of various textbooks, which he then resold for a hefty profit.  Wiley sued Kirtsaeng claiming that Kirtsaeng’s unauthorized importation and resale of its books was an infringement of its exclusive right to distribute.

In holding that the First Sale Doctrine does apply to copyrighted goods lawfully made abroad, the Supreme Court analyzed the meaning of the statutory language “lawfully made under this title,” which the Court analyzed in two parts.   First, that “under” means “in accordance with” and not literally within the United States.  And secondly, that “lawfully made” meant that the copyrighted item was originally manufactured with the permission of the copyright holder, regardless of geographic location.  Additionally, the Supreme Court argued that the Copyright Act (“Act”) itself supported a nongeographical limitation since the Act does apply to works made abroad in various respects, (e.g., § 602(a) foreign printed pirated copies subject to the Act).

This case is a significant win for the sellers of gray-market goods.  However, it is by no means dispositive; owners of goods originally meant to be distributed and sold abroad but imported without their authorization may still avail themselves to the protection available to them under the Lanham Act.  If you have any questions regarding the First Sale Doctrine, or the importation and sale of gray market goods, please feel free to contact our office at 305.921.9326 to setup a consultation.

Labeling changes and postmarket study requirements for extended-release and long-acting opioid analgesics

September 10, 2013

The U.S. Food and Drug Administration today announced class-wide safety labeling changes and new postmarket study requirements for all extended-release and long-acting (ER/LA) opioid analgesics intended to treat pain.

“The FDA is invoking its authority to require safety labeling changes and postmarket studies to combat the crisis of misuse, abuse, addiction, overdose, and death from these potent drugs that have harmed too many patients and devastated too many families and communities,” said FDA Commissioner Margaret A. Hamburg, M.D. “Today’s action demonstrates the FDA’s resolve to reduce the serious risks of long-acting and extended release opioids while still seeking to preserve appropriate access for those patients who rely on these medications to manage their pain.”

Given the serious risks of using ER/LA opioids, the class-wide labeling changes, when final, will include important new language to help health care professionals tailor their prescribing decisions based on a patient’s individual needs.

The updated indication states that ER/LA opioids are indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.

The updated indication further clarifies that, because of the risks of addiction, abuse, and misuse, even at recommended doses, and because of the greater risks of overdose and death, these drugs should be reserved for use in patients for whom alternative treatment options (e.g., non-opioid analgesics or immediate-release opioids) are ineffective, not tolerated, or would be otherwise inadequate to provide sufficient management of pain; ER/LA opioid analgesics are not indicated for as-needed pain relief.

“The FDA’s primary tool for informing prescribers about the approved uses of medications is the product labeling,” said Douglas Throckmorton, M.D., deputy director for regulatory programs in the FDA’s Center for Drug Evaluation and Research. “These labeling changes describe more clearly the risks and safety concerns associated with ER/LA opioids and will encourage better, more appropriate, prescribing, monitoring and patient counseling practices involving these drugs.”

Recognizing that more information is needed to assess the serious risks associated with long-term use of ER/LA opioids, the FDA is requiring the drug companies that make these products to conduct further studies and clinical trials. The goals of these postmarket requirements are to further assess the known serious risks of misuse, abuse, increased sensitivity to pain (hyperalgesia), addiction, overdose, and death.

The FDA is also requiring a new boxed warning on ER/LA opioid analgesics to caution that chronic maternal use of these products during pregnancy can result in neonatal opioid withdrawal syndrome (NOWS), which may be life-threatening and require management according to protocols developed by neonatology experts. NOWS can occur in a newborn exposed to opioid drugs while in the mother’s womb. Symptoms may include poor feeding, rapid breathing, trembling, and excessive or high-pitched crying.

In addition, the FDA is notifying ER/LA opioid analgesic application holders of the need for changes to the following sections of drug labeling: Dosage and Administration; Warnings and Precautions; Drug Interactions; Use in Specific Populations; Patient Counseling Information, and the Medication Guide.

Once the safety labeling changes are finalized, modifications will also be made to the ER/LA Opioid Analgesics Risk Evaluation and Mitigation Strategy (REMS), to reflect the updated information. Originally approved in 2012, the ER/LA Opioid Analgesics REMS requires companies to make available to health care professionals educational programs on how to safely prescribe ER/LA opioid analgesics and to provide Medication Guides and patient counseling documents containing information on the safe use, storage, and disposal of ER/ LA opioids.

For more information as to how our firm can help your company comply with the recent labeling changes imposed by the FDA related to opioid analgesics and related products  please feel free to contact us at telephone number above.


FDA defines “gluten-free” for food labeling

August 2, 2013

The U.S. Food and Drug Administration today published a new regulation defining the term "gluten-free" for voluntary food labeling.  This will provide a uniform standard definition to help the up to 3 million Americans who have celiac disease, an autoimmune digestive condition that can be effectively managed only by eating a gluten free diet.

“Adherence to a gluten-free diet is the key to treating celiac disease, which can be very disruptive to everyday life,” said FDA Commissioner Margaret A. Hamburg, M.D. “The FDA’s new ‘gluten-free’ definition will help people with this condition make food choices with confidence and allow them to better manage their health.” 

This new federal definition standardizes the meaning of “gluten-free” claims across the food industry. It requires that, in order to use the term "gluten-free" on its label, a food must meet all of the requirements of the definition, including that the food must contain less than 20 parts per million of gluten. The rule also requires foods with the claims “no gluten,” “free of gluten,” and “without gluten” to meet the definition for “gluten-free.”

The FDA recognizes that many foods currently labeled as “gluten-free” may be able to meet the new federal definition already. Food manufacturers will have a year after the rule is published to bring their labels into compliance with the new requirements. 

“We encourage the food industry to come into compliance with the new definition as soon as possible and help us make it as easy as possible for people with celiac disease to identify foods that meet the federal definition of ‘gluten-free’” said Michael R. Taylor, the FDA’s deputy commissioner for foods and veterinary medicine.

The term "gluten" refers to proteins that occur naturally in wheat, rye, barley and cross-bred hybrids of these grains.  In people with celiac disease, foods that contain gluten trigger production of antibodies that attack and damage the lining of the small intestine. Such damage limits the ability of celiac disease patients to absorb nutrients and puts them at risk of other very serious health problems, including nutritional deficiencies, osteoporosis, growth retardation, infertility, miscarriages, short stature, and intestinal cancers.  

If you have any questions about FDA compliance, including compliance with the FDA’s updated gluten-free labeling requirements, please feel free to contact us at telephone number above.

FDA to Investigate Added Caffeine

May 3, 2013

The Food and Drug Administration (FDA) has announced that, in response to a trend in which caffeine is being added to a growing number of products, the agency will investigate the safety of caffeine in food products, particularly its effects on children and adolescents.

Michael R. Taylor, deputy commissioner for foods and veterinary medicine at FDA, answers questions about his concerns and possible FDA actions.

Q: The announcement comes just as Wrigley's (a subsidiary of Mars) is promoting a new pack of gum with eight pieces, each containing as much caffeine as half a cup of coffee. Is the timing coincidental?

A: The gum is just one more unfortunate example of the trend to add caffeine to food. Our concern is about caffeine appearing in a range of new products, including ones that may be attractive and readily available to children and adolescents, without careful consideration of their cumulative impact.

One pack of this gum is like having four cups of coffee in your pocket. Caffeine is even being added to jelly beans, marshmallows, sunflower seeds and other snacks for its stimulant effect.

Meanwhile, "energy drinks" with caffeine are being aggressively marketed, including to young people. An instant oatmeal on the market boasts that one serving has as much caffeine as a cup of coffee, and then there are similar products, such as a so-called "wired" waffle and "wired" syrup with added caffeine.

The proliferation of these products in the marketplace is very disturbing to us.

Q. What is your first step in this process?

A. We have to address the fundamental question of the potential consequences of all these caffeinated products in the food supply to children and to some adults who may be at risk from excess caffeine consumption. We need to better understand caffeine consumption and use patterns and determine what is a safe level for total consumption of caffeine. Importantly, we need to address the types of products that are appropriate for the addition of caffeine, especially considering the potential for consumption by young children and adolescents.

We've already met with some companies to hear their rationale for adding caffeine to varied products and to express our concern. We've also reached out to the American Beverage Association, which represents the non-alcoholic beverage industry, and the Grocery Manufacturers Association, which represents food, beverage and consumer-products companies.

Q. What is currently considered a safe amount of daily caffeine?

A. For healthy adults FDA has cited 400 milligrams a day—that's about four or five cups of coffee—as an amount not generally associated with dangerous, negative effects. FDA has not set a level for children, but the American Academy of Pediatrics discourages the consumption of caffeine and other stimulants by children and adolescents. We need to continue to look at what are acceptable levels.

We're particularly concerned about children and adolescents and the responsibility FDA and the food industry have to protect public health and respect social norms that suggest we shouldn't be marketing stimulants, such as caffeine, to our children.

Q. What currently are FDA requirements concerning caffeine being added to foods?

A. Manufacturers can add it to products if they decide it meets the relevant safety standards, and if they include it on the ingredient list. While various uses may meet federal food safety standards, the only time FDA explicitly approved adding caffeine was for colas in the 1950s. Existing rules never anticipated the current proliferation of caffeinated products.

Q. Is it possible that FDA would set age restrictions for purchase?

A. We have to be practical; enforcing age restrictions would be challenging. For me, the more fundamental questions are whether it is appropriate to use foods that may be inherently attractive and accessible to children as the vehicles to deliver the stimulant caffeine, and whether we should place limits on the amount of caffeine in certain products.

Q. Have you taken any actions on other caffeinated products?

A. In 2010, we brought about the withdrawal from the market of caffeinated alcoholic beverages, primarily malt beverages, in part because of studies indicating that combined ingestion of caffeine and alcohol may lead to hazardous and life-threatening situations. Caffeine can mask some of the sensory cues that people might normally rely on to determine their level of intoxication.

Q. Don't new regulations take a lot of resources and time?

A. They do. But we believe that some in the food industry are on a dubious, potentially dangerous path. If necessary, and if the science indicates that it is warranted, we are prepared to go through the regulatory process to establish clear boundaries and conditions on caffeine use. We are also prepared to consider enforcement action against individual products as appropriate.



Resale of Lawfully-Purchased Digital Music

April 19, 2013

The reselling of legally-purchased digital music (similar to the sale of used CDs or books) has been called into question by the District Court for the Southern District of New York’s recent Summary Judgment order in the case of Capital Records, LLC v. Redigi Inc., Case No. 12 Civ. 95 (S.D. NY 2013)(D.E. 109).

ReDigi provides an online marketplace whereby individuals may sell and purchase previously owed digital music that was lawfully-purchased via iTunes.   Capitol Records filed a complaint against ReDigi in January 2012, instigating a challenge to protections of the first sale doctrine – which gives owners of copies of products the ability to lawfully sell or lend a product, thereby allowing used bookstores, libraries and video rental stores to exist.  The Court ruled that ReDigi had infringed various copyrights owned by Capital Records by allowing its users to resell and purchase their lawfully-purchased digital music on its online marketplace.

The crux of the Court’s decision revolves around the copyright holder’s rights of reproduction under the Copyright Act.   The Copyright Act provides that a copyright owner has the exclusive right “to reproduce the copyrighted work in .  .  .  phonorecords.” 17 U.S.C. § 106(1).   Copyrighted works are defined to include, inter alia, “sound recordings,”   which are “works that result from the fixation of a series of musical, spoken or other sounds.”  Id. § 101.  These include phonorecords which are the “material objects in which sounds .  .  . are fixed by any method . . ..” Id. “Thus, the plain text of the Copyright Act makes clear that reproduction occurs when a copyrighted work is fixed in a new material object.”

The Court reasoned that when a user uploaded his or her lawfully-purchased digital music onto ReDigi’s servers, he or she implicitly violated Capital Records’ rights of reproduction and thereby infringed on its copyrights.  In other words, by uploading the digital music and imprinting it on a new material object the copyrighted work was reproduced on a new phonorecord, namely the hard drives on Redigi’s servers.   Accordingly, under the Court’s decision, the only way to resell your lawfully-purchased digital music without violating the Copyright Act would be to sell it along with the original phonorecord (i.e., the hard drive which was used when you originally downloaded it)!   Let’s see what happens when ReDigi eventually appeals this draconian decision.  Whatever happens, it should be interesting.

FDA Extends Comment Period on AquAdvantage Salmon Documents

March 1, 2013

The U.S. Food and Drug Administration recently announced that it is extending for 60 days the comment period for the draft Environmental Assessment (EA) and preliminary Finding of No Significant Impact (FONSI) pertaining to AquaBounty Technologies’ application for AquAdvantage Salmon. The comment period, originally slated to end on Feb. 25, 2013, now runs until April 26, 2013.

AquAdvantage Salmon are Atlantic salmon that have been genetically engineered to reach a measure of growth commonly used in salmon aquaculture more rapidly than other farmed Atlantic salmon. This is commonly linked to “reaching market size” (about 2-5 kilograms or about 5-12 pounds) in less time than other farmed salmon.

The draft EA and preliminary FONSI are one step in FDA’s evaluation of the AquAdvantage Salmon and do not indicate an approval of the application. The National Environmental Policy Act of 1969 (NEPA) requires FDA and other federal agencies to perform such assessments whenever a major Federal action is taken.

Geographically Misdescriptive Trademarks

February 4, 2013

Under U.S. trademark law, geographic terms or signs are not registrable as trademarks if they are geographically descriptive or geographically misdescriptive of where the goods/services originate. The theory is that other producers in that area would need to be able to use a geographic term to describe where their goods/services are from and that one person should not be able to prevent others from using that term. If a term is misdescriptive for the goods/services, consumers would be misled and/or deceived by the use of the term on goods/services that do not come from the place identified.

The test used by most federal courts to determining whether a mark is primarily geographically misdescriptive involves a two-step inquiry by the court.  The mark must: (1) have as its primary significance a generally known area; and (2) identify products that purchasers are likely to believe mistakenly are connected to that area.

The recent case Federal Circuit case of In re Miracle Tuesday, LLC, 695 F.3d 1339, 104 U.S.P.Q. 1330 (Fed. Cir. 2013) is an interesting example of the Federal Courts’ application of the prohibition against the registerability of geographically misdescriptive marks.  In Miracle Tuesday, the Court considered the issue of whether the Trademark Trial and Appeal Board (“TTAB”) was correct in its finding that Miracle Tuesday’s application for the mark JPK PARIS 75 was properly refused registration on the basis of geographic misdescriptiveness.  Miracle Tuesday filed its application for JPK PARIS 75 in connection with sunglasses, wallets, handbags and purses, travel bags, suitcases, belts and shoes.  The letters “JPK” were the initials of Jean-Pierre Klifa, the designer of the goods at issue who lived in Paris several decades before filing the application.  There was no evidence that the goods or any component of the goods came for Paris.

The Federal Circuit agreed with the TTAB that because the relevant purchasing public would likely think Paris is a known source for fashion accessories, there was sufficient evidence of a good/place association between Paris and the goods listed in the application.  The Federal Circuit rejected Miracle Tuesday’s argument that the designer had a significant connection to Paris and stated that the relevant inquiry was whether there was a connection between the goods and Paris—not whether there was a connection between the designer and Paris.

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