An Examination of Patents, Licensing, Research Tools, and the Tragedy of the Anticommons in Biotechnology Innovation

The continued development of and affordable access to potentially life saving pharmaceuticals, gene therapies and diagnostics is unquestionably a socially important issue. However, crafting government policy to encourage the development of and allowing affordable access to those services and products is difficult. On one hand, the development of those services and products requires a large investment of funds because of the complexity, collaborative nature, and uncertainty of the development of those products and services. Accordingly, investors require the safety of strong and stable patent rights to ensure a return on their investment in the development of a commercial end-product or a research tool. On the other hand, patents may foreclose competition for a particular product or service and enable a company to exact a supra competitive price for that product or service, thus denying access to people unable to afford that product or service. In arriving at that supra competitive price, the company selling the commercial end product may have to include in that price a number of additional costs imposed by holders of patented research tools needed in the development of the commercial end-product. This Article examines whether the development of pharmaceuticals, gene therapies or diagnostics is being stifled by the inability of companies to access proprietary research tools needed for the development of those important products and services. This Article also evaluates proposals for alleviating problems in accessing proprietary research tools, and proposes recommendations to aid in the efficient transfer of that technology. First, this Article recommends that Congress enact a law similar to the proposed Genomic Science and Technology Innovation of Act of 2002, which requires the government to conduct a study of the effect of government policy on biotechnology innovation. Second, this Article recommends that the government encourage public and private parties to enter patent pools to efficiently transfer rights in biotechnology inventions. The government, in conjunction with private and public institutions, should create a publicly available database of proprietary research tools and licenses concerning those tools. The government should also modify the provision of the Bayh-Dole Act concerning reservation of a nonexclusive right to practice any patented invention created with federal funding. The modification would allow the government to transfer a non-exclusive license to a patented research tool developed with government funding to a patent pool created by industry participants if it is demonstrated that the owner of the patented research tool is unreasonably withholding the license of that tool from the pool. Any royalties resulting from the licensing of the research tool in the patent pool will be distributed to the owner of the patented research tool. Part I of this Article provides definitions for research tools and commercial applications. Part II discusses the costs, benefits, and purposes of patent law. Part III reviews university and private research and development, including the influence of the Bayh-Dole Act. Part IV examines the development of commercial applications of biotechnology research, including the role of venture capital and the use of licensing provisions requiring reach through royalties and exclusivity. Part V evaluates problems that may occur in attempting to develop commercial applications and licensing patents. Part VI reviews the Tragedy of the Anticommons theory. Part VII discusses research and analysis concerning the existence of the anticommons problem. Part VIII examines and analyzes potential solutions for solving the Tragedy of the Anticommons in biotechnology. Finally, Part IX offers recommendations for addressing an existing or developing Tragedy of the Anticommons

Adoption of the Bayh-Dolye Act in Developed Countries: Added Presure for a Broad Research Exemption in the United States?

Numerous developed countries, most if not all members of the Organization of Economic Cooperation and Development (OECD), including Japan, France, the United Kingdom, Germany, Austria, Denmark, Norway, Portugal, Spain, and Finland, have or are considering adopting legislation similar to the Bayh-Dole Act. These countries apparently believe that passage of legislation similar to the Bayh-Dole Act will lead to the transfer of government funded research results from the university laboratory to the marketplace and other economic activity. In the United States, the birthplace of the Bayh-Dole Act (the Act), it is not entirely clear whether its passage is the direct result or sole cause of the increase in patenting and licensing occurring after its passage. Much of this university patenting and licensing has been in the biotechnology field. Some commentators believe that the purported positive consequence of the Act-increased patenting and licensing-would have occurred without the Act. Some critics of the Act argue that it upsets the production and dissemination of scientific knowledge, particularly basic science, by the academic enterprise. The Act is also criticized for requiring the public to pay twice for an invention: once by funding the invention through taxes, and again, by extracting a supra-competitive price in the market through patents. Also, the Act arguably reduces the amount of information directed to the public domain-the foundation of new innovation-and the consequential spillover of benefits by allowing the patenting of government funded inventions. Perhaps the most frequently raised criticism of the Act is that it is contributing to the development of a tragedy of the anticommons in biotechnology innovation. A tragedy of the anticommons occurs when too many property rights are granted in one particular piece of property, with the result that the holders of the rights are unable to transfer and aggregate those rights to use the property. There is currently conflicting empirical evidence on whether an anticommons has emerged in the biotechnology field in the United States. This essay makes several points. First, the Bayh-Dole Act may not be successful in Europe and Japan-success judged by increased patenting and licensing-because of the differences in the history, practice, and structure of most European and Japanese university systems compared with the U.S. university system. It may take substantial change in the practice and structure of European and Japanese university systems for legislation similar to the Bayh-Dole Act to be successful. While European and Japanese university systems appear to be undergoing that change, it will likely take a substantial amount of time to modify long-standing practices and existing structure. Second, assuming legislation similar to the Bayh-Dole Act is successful in Europe and Japan, it may make the development of an anticommons more likely in the United States because of increased patenting and licensing by European and Japanese research universities and spin-off companies in the biotechnology field in the United States. Finally, while an anticommons may be avoided in European countries and Japan, as those countries generally have a more robust research exemption to patent infringement, the increased patenting and licensing in the United States may result in an anticommons because of the limited common law research exemption. This may result in pressure for the United States to enact or develop, through the common law, a more robust exception similar to that of other developed countries

Aesthetic Functionality

This Article relies on several cases that demonstrate how aesthetic functionality can be used to suppress the cumulative excesses of trademark law. Based on those cases, this Article first proposes that functionality be used to police the boundary of copyright and trademark to prevent trademark protection of subject matter ordinarily protected by copyright law or in the public domain. Second, this Article asserts that aesthetic functionality is used in its defensive sense to relieve some alleged infringers or diluters from trademark infringement or dilution. Finally, this Article argues that functionality can be used as a policy lever to exempt certain subject matter from trademark protection in industries where that subject matter is fundamental to innovation in that field. Again, these three uses of functionality should be moored to the protection of competition. The first section is a brief introduction. The second section discusses the troubling nature of trademark law and its cumulative excesses. The third section provides a discussion of the functionality doctrine with an emphasis on aesthetic functionality. The fourth section analyzes three new roles for aesthetic functionality to restrain trademark law’s cumulative excesses. Finally, a brief conclusion is offered

Trademark Enforcement Issues in the United States: Bullies and Trolls

The article discusses several issues in trademark enforcement in the U.S. It analyzes the problems on trademark bullies and trademark trolls in the U.S. and their existence including the trademark enforcement practices of Travelers Corp. It explains the reason the problem on a trademark troll is a problem unlikely to develop in the U.S

Towards Recognizing and Reconciling the Multiplicity of Values and Interests in Trademark Law

In the last seventy years, trademark rights have expanded enormously. Many commentators believe this has led to an unjustified increase in the rights and remedies available to trademark owners. This expansion has been approved and led by trademark owners, Congress, and courts, including the U.S. Supreme Court. However, in the last ten years or so, the Supreme Court and Congress have begun attempting to restrain trademark rights, and trademark law is striving to recognize the multiplicity of values implicated by trademark law and reconcile the interests of mark owners and the public generally—particularly users of marks, consumers, and the competitors of mark owners. This Article attempts to explain this search by exploring the sometimes competing interests of mark holders and the public; trademark policy, including the lack of coherent limits inherent in the consumer search cost theory as a normative tool and other important values that are relevant to trademark law; and the structure of trademark law. Following the lead of recent Supreme Court opinions concerning injunctions in Winter v. Natural Resources Defense Council, Inc. and eBay Inc. v. MercExchange, L.L.C., this Article also provides proposals for addressing the various values and interests in trademark law