Friday, January 14, 2005

Article in IPT for February 2005

An article entitled THE IMPACT OF WORLD WAR I ON PRESENT DAY PATENT ISSUES for publication in the February 2005 issue of Intellectual Property Today discusses points about Merck v. Integra.

Separately, it addresses points about "getting it wrong" in various publications:

On January 10, as a result of an internal investigation over the Bush/National Guard story, CBS fired Mary Mapes, producer of the report. Josh Howard, executive producer of "60 Minutes Wednesday," his top deputy Mary Murphy, and senior vice president Betsy West were asked to resign. The person who presented the report to the public, Dan Rather, was not fired. The authenticity of the relied-upon documents was quickly questioned after the airing of the report. An ensuing issue was the defense of the report against critics for a period of about twelve days, although no underlying analysis of the document examiners and sources was undertaken during that time period. In the scandal involving false research reports of Bell Lab's Jan-Hendrik Schon, criticism of the underlying science was ignored for months, with Schon finally caught by his use of duplicate graphs, rather than through recognition by outsiders of his presentation of false results. Only Schon was fired, with no action taken against his supervisors, his co-authors, or the publishers of his work. Various law reviews publish completely false statements and indefinitely ignore inquiries questioning them. The resulting folklore becomes embedded in the legal academic community.


Speaking of law reviews, many discuss the Merck v. Integra case.

In 30 Wm. Mitchell L. Rev. 1059 (2004), Kevin Sandstrom states:

This note argues Integra Lifesciences I, Ltd. v. Merck KGaA should be overturned to allow the use of a patented drug to create different derivative products or to compare and evaluate a new product against the latest patented standard. Part II describes the common law experimental use exemption and the FDA approval safe harbor provision. n11 Part III reviews the facts, holding, and dissent in Integra. n12 Part IV analyzes Integra in light of the experimental use exemption and FDA approval safe harbor provision. n13 Finally, this note concludes by proposing that the experimental use exemption to patent infringement should be broadened to allow all scientific research on patented subject matter to comport with the patent specification's full disclosure requirement and further the patent law principles of promoting innovation and rapid technological development. n14

In 2004 Wis. L. Rev. 81, Katherine J. Strandburg states:

This Article contends that there are general reasons to believe that a well-designed experimental-use exemption from infringement liability can promote faster cumulative technological progress without significantly diminishing incentives to invest in the original invention. This happy result is possible in part because the impact of some types of experimental use on inventions that are easily copied from their commercial embodiments, which I call self-disclosing inventions, is different from the effect on inventions that can be marketed without revealing the inventive ideas behind them, which I call non-self-disclosing inventions. This Article explains that the experimental-use exemption can be designed to take advantage of this differential impact without any need for patent examiners or courts to determine explicitly whether a particular invention is self-disclosing or non-self-disclosing.


This Article supports Mueller's proposal [76 Wash. L. Rev. 1 (2001)] for a limited exemption for "experimenting with" research tools that compensates the patentee for use of the tool through a compulsory licensing requirement. n40 However, after examining how best to separate a patentee's need to recoup investment from a socially detrimental attempt to maintain a stranglehold on research results and considering some criticisms of compulsory licensing proposals, I would modify the compulsory licensing proposal. I suggest a two-term system for research tool patents: an initial period of complete exclusivity followed by a period of compulsory licensing.

Rochelle Dreyfuss in 46 Ariz. L. Rev. 457, states:

I can imagine circumstances where patentees would rationally refuse to license.

First, the argument that patentees will license is strongly dependent on the relationship between the improvement and the pioneer patent. Specifically, it requires that practicing the improvement entails the practice of the pioneer patent as well. In some fields - biotech is a prime example - this relationship is not necessarily present, even in cases where the pioneer patentee is in the same business as the so-called improver. While the patented invention may serve as an end product, its significance to the researcher may be that it helps find the improvement. Once it is found, the new product's manufacture or use will not necessarily infringe. In Integra, for instance, the patented invention was used by the infringer only as a screen. Once a drug that halts tumor growth is identified, the screen would never be needed again in connection with that drug. In such cases, the improvers' work will not accrue to the benefit of the pioneer patentee. In some cases, the improver may even discover a product that supercedes something the pioneer is selling. Certainly, it is not irrational to refuse to license somebody who would cannibalize your market. Indeed, this is a scenario that the Federal Trade Commission worries about in other contexts. n42

Second, a rational patentee might decide to climb the innovation ladder (that is, develop products) slowly, milking each market before progressing to the next one. Licensing others could interfere with this plan. Again, this concern is familiar. It has surfaced in patent cases from time to time. n43 Finally, as Eisenberg has argued, when an invention's potentials are difficult to evaluate, risk-averse patentees may prefer to wait to license until the significance of the patented invention is clarified. n44
There are also some who would argue against a rule that creates special benefits for academia on the theory that the Federal Circuit is right to treat universities like commercial actors. Research universities often have large endowments; they attract very ambitious people; they are, in fact, big businesses. Again, I do not agree. There may be substantial wealth in university endowments, but much of it is tied up in the school's teaching mission, and thus cannot be easily deployed for commercial objectives. Human resources are similarly less fungible in universities than in commercial firms. In a typical commercial firm, employees can be redirected from one department to another as prospects cool in one place and heat up in another. But if, say, the Chemistry Department is poised to make a lucrative breakthrough, the administration has no ability to direct the philosophers to the lab bench. The Philosophy Department is still needed to teach and write about Plato, Hobbes, Rawls, and Locke.

Of course, my approach also has problems. Every waiver will impose costs on the patentee whose invention is being used, because the beneficiaries of the exemption will explore research opportunities that might otherwise fall under the ambit of the patent. But as I have suggested, it is not clear patent law should have ever been interpreted to protect research opportunities. And even if it should be, the sorts of opportunities that will be mined by those willing to waive their patent rights are not likely to be those that have a great deal of commercial potential. Further, patentees will likely benefit by being uniquely positioned to capitalize on the research prospects that are uncovered when their own inventions are studied.
Another question is whether anyone would ever file a waiver. Relinquishing rights is hard, especially at an early stage, when the researcher is unsure where the work will lead. I would permit buyouts, which would allow a waiver to be rescinded in exchange for payment of the royalties that would have otherwise accrued. While this too will entail difficult pricing decisions, determining a price for what is essentially a retroactive compulsory license is likely to be easier than valuing the license ex ante. Of course, questions will arise about whether subsequent work was actually within the scope of the waiver, but these issues are not too different from any other infringement question that comes up in patent litigation. The university setting will also create some difficulties. Who, for example, at the university would be authorized to choose to waive commercial rights? Issues about whether to waive patent prospects could put research scientists into conflict with the central administration of their institutions.
In sum, mine is far from a perfect plan. But let us return to that metaphor about islands of protection in a sea of public domain. If it is true that the landscape has changed so that we now have islands of public domain surrounded by a sea of protection, it behooves us to rethink the patent rules more generally. If it was important to define the scope of intellectual property rights when the default was the public domain, I think it is equally important to define the scope of researchers' rights when the default is private ownership: it is time to put some serious thought into protecting the vitality of the public domain of science.


Post a Comment

<< Home