Law Commons^™

Antitrust And Patent Law Analysis Of Pharmaceutical Reverse Payment Settlements, Herbert J. Hovenkamp

All Faculty Scholarship

Patent settlements in which the patentee pays the alleged infringer to stay out of the market are largely a consequence of the Hatch-Waxman Act, which was designed to facilitate the entry of generic drugs by providing the first generic producer to challenge a pioneer drug patent with a 180 day period of exclusivity. This period can be extended by a settlement even if the generic is not producing, and in any event all subsequent generic firms are denied the 180 day exclusivity period, significantly reducing their incentive to enter.

The Circuit Courts of Appeal are split three ways over such …

Antitrust And Innovation: Where We Are And Where We Should Be Going, Herbert J. Hovenkamp

All Faculty Scholarship

For large parts of their history intellectual property law and antitrust law have worked so as to undermine innovation competition by protecting too much. Antitrust policy often reflected exaggerated fears of competitive harm, and responded by developing overly protective rules that shielded inefficient businesses from competition at the expense of consumers. By the same token, the IP laws have often undermined rather than promoted innovation by granting IP holders rights far beyond what is necessary to create appropriate incentives to innovate.

Perhaps the biggest intellectual change in recent decades is that we have come to see patents less as a …

Life After Bilski, Mark A. Lemley, Michael Risch, Ted Sichelman, R. Polk Wagner

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In Bilski v. Kappos, the Supreme Court declined calls to categorically exclude business methods—or any technology—from the patent law. It also rejected as the sole test of subject matter eligibility the Federal Circuit’s deeply-flawed machine-or-transformation test, under which no process is patentable unless it is tied to a particular machine or transforms an article to another state or thing. Subsequent developments threaten to undo that holding, however. Relying on the Court’s description of the Federal Circuit test as a “useful and important clue,” the U.S. Patent and Trademark Office, patent litigants, and district courts have all continued to rely on …

Introduction To Creation Without Restraint: Promoting Liberty And Rivalry In Innovation, Christina Bohannan, Herbert J. Hovenkamp

All Faculty Scholarship

This document contains the table of contents, introduction, and a brief description of Christina Bohannan & Herbert Hovenkamp, Creation without Restraint: Promoting Liberty and Rivalry in Innovation (Oxford 2011).

Promoting rivalry in innovation requires a fusion of legal policies drawn from patent, copyright, and antitrust law, as well as economics and other disciplines. Creation Without Restraint looks first at the relationship between markets and innovation, noting that innovation occurs most in moderately competitive markets and that small actors are more likely to be truly creative innovators. Then we examine the problem of connected and complementary relationships, a dominant feature of …

Sequential Innovation, Patents, And Imitation, James Bessen, Eric Maskin

Faculty Scholarship

How could such industries as software, semiconductors, and computers have been so innovative despite historically weak patent protection? We argue that if innovation is both sequential and complementary--as it certainly has been in those industries--competition can increase firms' future profits thus offsetting short-term dissipation of rents. A simple model also shows that in such a dynamic industry, patent protection may reduce overall innovation and social welfare. The natural experiment that occurred when patent protection was extended to software in the 1980?s provides a test of this model. Standard arguments would predict that R&D intensity and productivity should have increased among …

Asking For Money Back - Chilling Commercialization Or Recouping Public Trust In The Context Of Stem Cell Research?, Matthew Herder

Articles, Book Chapters, & Popular Press

As publicly funded institutions have increasingly embraced the goal of commercializing scientific research, concerns about private appropriation have become familiar refrain. One commonly suggested remedy is to create some kind of 'recoupment' provision whereby the State, on behalf of the public, receives a certain percentage of profits realized. The Bayh-Dole Act originally included a recoupment provision but it was deleted by a legislative committee. Countries around the globe attempting to emulate Bayh-Dole have, whether by design or default, reinforced the underlying logic against recoupment, which is essentially as follows: obligations to provide direct financial returns undermine the commercialization process and …

Innovation And The Domain Of Competition Policy, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust policy and the IP laws are both concerned with practices that restrain competition unnecessarily by reducing the size of the public domain beyond that which the Constitution contemplates, or as Congress intended for them to be expanded. In fact, antitrust has a dual role as promoter of competition in IP intensive markets. It regulates both restraints on competition and restraints on innovation. The first line protector of the competitive process in innovation is the IP statutes themselves. The Constitutional Mandate to Congress to create intellectual property regimes in order to promote the Progress of Science and useful Arts is …

What's Wrong With The Patent System? Fuzzy Boundaries And The Patent Tax, James Bessen, Michael J. Meurer

Faculty Scholarship

The annual number of patent lawsuits filed in the U.S. has roughly tripled from 1970 to 2004. The number of suits was more or less steady in the 1970s, climbed slowly in the 1980s, and exploded in the 1990s. Why? The usual answers point to (1) the growth of the “new economy” and the concomitant explosion of patenting, (2) the failure of the Patent Office to reject patents on old or obvious inventions, or (3) the rise of the patent troll. There is an element of truth in all these answers, but even collectively they do a poor job explaining …

An Empirical Look At Software Patents, James Bessen, Robert M. Hunt

Faculty Scholarship

U.S. legal changes have made it easier to obtain patents on inventions that use software. Software patents have grown rapidly and now comprise 15 percent of all patents. They are acquired primarily by large manufacturing firms in industries known for strategic patenting; only 5 percent belong to software publishers. The very large increase in software patent propensity over time is not adequately explained by changes in R&D investments, employment of computer programmers, or productivity growth. The residual increase in patent propensity is consistent with a sizeable rise in the cost effectiveness of software patents during the 1990s. We find evidence …

Race-Ing Patents/Patenting Race: An Emerging Political Geography Of Intellectual Property In Biotechnology, Jonathan Kahn

Faculty Scholarship

This article applies insights from critical race theory to examine an emerging phenomenon in biotechnology research and product development. The strategic use of race as a genetic category to obtain patent protection and drug approval. A dramatic rise in the use of race in biotechnology patents indicates that researchers and affiliated commercial enterprises are coming to see social categories of race as presenting opportunities for gaining, extending, or protecting monopoly market protection for an array of biotechnological products and services. Racialized patents are also providing the basis for similarly race-based clinical trial designs, drug development, capital raising and marketing strategies …

Standard Setting, Patents, And Access Lock-In: Rand Licensing And The Theory Of The Firm, Joseph S. Miller

Scholarly Works

Many leading voluntary standard-setting organizations (SSOs) have adopted intellectual property (IP) policies under which participants must promise to license any patents on technology that they contribute to a standard, and to do so on reasonable and nondiscriminatory terms (RAND). The standard setting literature includes a substantial focus on the widespread use of this RAND promise. A common refrain in these analyses of the RAND promise is that its meaning is dysfunctionally uncertain. We know more about the RAND promise, however, than the existing literature suggests. I show that we already know the RAND promise's core meaning, and why it remains …

The Federal Circuit And Patentability: An Empirical Assessment Of The Law Of Obviousness, Lee Petherbridge, R. Polk Wagner

All Faculty Scholarship

It is by now a cliché to suggest that the United States Court of Appeals for the Federal Circuit has weakened the standards for obtaining patents. In this article, we empirically assess that Court’s performance on the ultimate question of patentability— the requirement that a patentable invention must be “nonobvious.” Our findings suggest that the conventional wisdom may not be well-grounded, at least on this measure. Nowhere is the Federal Circuit’s controversial role as the locus of judicial power in the U.S. patent system more evident than in the context of the doctrine of obviousness under 35 U.S.C. § 103. …

Technology Worth Patenting, Thomas G. Field Jr

Law Faculty Scholarship

Inevitably scarce resources are better invested in deciding which [patent] applications are worth filing and seeking the broadest defensible claims for those that are chosen. Whether a patent can be obtained for less than, say, $10,000 is the wrong question. Whether a patent is worth having is the better question—particularly from the standpoint of prospective licensees.

Patents And The Diffusion Of Technical Information, James Bessen

Faculty Scholarship

Does the disclosure requirement of the patent system encourage the diffusion of inventions? This paper builds a simple model where firms choose between patents and trade secrecy to protect inventions. Diffusion is not necessarily more likely with a patent system nor is the market for technology necessarily greater.

Protein Similarity Score: Simplified Version Of The Blast Score As Superior Alternative To Percent Identity For Claiming Genuses Of Related Protein Sequences, Christopher M. Holman

Faculty Works

Recombinant proteins form the basis for most of the products of biotechnology, including drugs, diagnostics, research reagents, genetically modified organisms and industrial enzymes. However, the nature of proteins and the rules of patentability conspire to make it difficult to achieve adequate patent protection for novel proteins and the polynucleotides that encode them. Narrow patent claims limited to protein sequences sharing a high degree of structural identity can generally be designed around by introducing structural changes in the claimed protein, thereby avoiding the patent without substantially altering the protein's function. However, inventors are generally restricted in their ability to broadly claim …

Of Patents And Path Dependency: A Comment On Burk And Lemley, R. Polk Wagner

All Faculty Scholarship

This Article delves into issues surrounding the relationship between technology and the patent law. Responding to Dan Burk and Mark Lemley's earlier article, Is Patent Law Technology-Specific?, the piece notes that the basic question posed by Burk and Lemley's article is a relatively easy question given the several doctrines that explicitly link the subject matter context of an invention to the validity and scope of related patents. This sort of technological exceptionalism (which this Article refers to as micro-exceptionalism) is both observable and easily justifiable for a legal regime directed to technology policy. In contrast, Burk and Lemley's identification of, …

The Software Patent Experiment, Robert M. Hunt, James Bessen

Faculty Scholarship

Over the past two decades, the scope of technologies that can be patented has been expanded to include many items previously thought unsuitable for patenting, for example, computer software. Today, the U.S. Patent and Trademark Office grants 20,000 or more software patents a year. Conventional wisdom holds that extending patent protection to computer programs will stimulate research and development and, thus, increase the rate of innovation. In this article, Bob Hunt and Jim Bessen investigate whether this has, in fact, happened. They describe the spectacular growth in software patenting, who obtains patents, and the relationship between a sharp focus on …

Brief Of Law Professors As Amicus Curiae In Support Of Respondent, Thomas G. Field Jr, William O. Hennessey, Craig S. Jepson, Karl F. Jorda

Law Faculty Scholarship

Inventors lacking assurance of a market, or even the right to practice patented inventions, face considerable risk. Those who qualify for patents, in return for disclosure, receive only the assistance of the courts in excluding others from economic exploitation of their inventions. Already subject to many legislative and judicial limitations, patents should not be further subject to the functional equivalent of private inverse condemnation without congressional action.

Patent Thickets: Strategic Patenting Of Complex Technologies, James Bessen

Faculty Scholarship

Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product's technology is shared, not exclusive. In that case I show that if patent standards are low, firms build "thickets" of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of "mutual non-aggression." Then R&D incentives are stronger, even optimal.

Information Wants To Be Free: Intellectual Property And The Mythologies Of Control, R. Polk Wagner

All Faculty Scholarship

This article challenges a central tenet of the recent criticism of intellectual property rights: the suggestion that the control conferred by such rights is detrimental to the continued flourishing of a public domain of ideas and information. I argue that such theories understate the significance of the intangible nature of information, and thus overlook the contribution that even perfectly controlled intellectual creations make to the public domain. In addition, I show that perfect control of propertized information - an animating assumption in much of the contemporary criticism - is both counterfactual and likely to remain so. These findings suggest that …

Inventions, Industry Standards, And Intellectual Property, Mark R. Patterson

Faculty Scholarship

When an industry standard incorporates a patented invention, the demand for products that comply with the standard has two components. Some of the demand may be for the inherent technical advantages of the invention; the patentee is generally entitled to revenues attributable to this demand. But some of the demand is for the benefits of standardization, such as interoperability, and the patentee is not entitled to revenues attributable to this demand. From this point, the article draws two conclusions. First, the amounts to which a patentee is entitled, either in litigation or in licensing negotiations, should be calculated by determining …

Reconsidering Estoppel: Patent Administration And The Failure Of Festo, R. Polk Wagner

All Faculty Scholarship

Last Term, in Festo Corporation v. Shoketsu Kinzoku Kogyo Kabashuki Co., the United States Supreme Court missed perhaps the most important opportunity for patent law reform in two decades. At the core of the failure to grasp the implications of "prosecution history estoppel" - a judicially-crafted principle limiting the enforceable scope of patents based on acts occurring during their application process - is the heretofore universal (but ultimately unsupportable) view of the doctrine as an arbitrary ex post limitation on patent scope. This Article demonstrates the serious flaws in this traditionalist approach, and develops a new theory of prosecution history …

Bargaining Over The Transfer Of Proprietary Research Tools: Is This Market Failing Or Emerging?, Rebecca S. Eisenberg

Book Chapters

This analysis highlights the importance of transactions between prior and subsequent innovators to permit valuable research to go forward across the boundaries of prior patent claims. In a recent article focusing on biomedical research,4 Michael Heller and I argue that too many patent rights on 'upstream' discoveries can stifle 'downstream' research and product development by increasing transaction costs and magnifying the risk of bargaining failures. Just as too few property rights leave communally held resources prone to overuse in a 'tragedy of the commons', too many property rights can leave resources prone to underuse in what Heller calls a 'tragedy …

Opinion Letter As To The Patentability Of Certain Inventions Associated With The Identification Of Partial Cdna Sequences, Rebecca S. Eisenberg, Robert P. Merges

Articles

You have asked for our legal opinion on the patentability of inventions claimed in U.S. patent applications 07/716,831, filed June 21, 1991 (the '831 application, or .'831"), 07/837,195, filed September 25, 1992 ("'195"), and 07/952,911, filed February 12, 1993 (."911"), all filed in the name of Craig Venter and others and assigned to the National Institutes of Health "(NIH)." We understand that NIH has abandoned these patent applications and has no present intention of filing similar applications in the future, but that NIH remains interested in the patenting of human DNA sequences from a broader public policy perspective. We have …

Reply To Comments On The Patentability Of Certain Inventions Associated With The Identification Of Partial Cdna Sequences, Rebecca S. Eisenberg, Robert P. Merges

Articles

A brief reply is in order to clarify our position on the patenting of research tools. We stand by the statement that "there are reasons to be wary of patents on research tools," but that statement should not be understood as a broad condemnation of patents on research tools in all contexts. Indeed, immediately after the cited language our opinion letter acknowledges that withholding patent protection from research tools could undermine private incentives to develop research tools and to make them available to investigators or lead to greater reliance on trade secrecy. Unlike the government, which purports to pursue patent …

Pharmaceuticals And Intellectual Property: Meeting Needs Throughout The World, Thomas G. Field Jr.

Law Faculty Scholarship

To the extent that most people think about patents and other forms of intellectual property at all, they tend to be aware that the owners of such property may have the legal capacity to limit market entry--without fully appreciating the extent to which products or processes that can be easily copied might otherwise be unavailable. Focusing on their function in recouping risk capital, this article will survey the types and functions of intellectual property. Then it will attend to the situation in developing countries, particularly the role of intellectual property in meeting their needs for medical products.