The Subject Matter of Patents II:

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1 Law 677 Patent Law Spring 2002 The Subject Matter of Patents II: Biotechnological Inventions

2 The Patentability of Biotechnological Inventions 35 U.S.C. 101 Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title. Funk Brothers v Kalo Innoculant (1948) Why does the court deny patentability? Why are works of nature not patentable? Are they really not compositions of matter? What other reasons might there be to reject works of nature? Inventorship Patent scope Are these properly 101 objections? Lack of innovation

3 The Patentability of Biotechnological Inventions Diamond v Chakrabarty (1980) Invention: man-made bacteria Why is this patentable? What is the analysis? How does the court distinguish Funk Bros.? Are you convinced? Consider the court s response to the policy arguments. Do you agree that the courts are less likely to make correct policy choices than Congress?

4 The Patentability of Biotechnological Inventions Put together the rules of Funk Brothers and Chakrabarty: Patentable biological organisms? Unpatentable biological organisms? Product of nature / man-made distinction Assume I spend $100B testing various chemical compounds I find in the Amazon rainforest for efficacy in treating cancer. Assume I succeed in discovering a cure. 1. Can I receive a patent on the compound? 2. What, if anything, has the public gained from my work? 3. Is this distinguishable from spending $100B developing and testing synthetic chemical compounds? 4. How might I attempt to protect my discovery?

5 The Patentability of Biotechnological Inventions The product of nature exception, continued. I claim a naturally-occurring organism, but specify that it is synthetically-produced. Patentable? I claim a naturally-occurring organism, but specify that it is a purified form that does not exist in nature. Patentable? I claim a process for isolating and purifying a naturally-occurring organism. Patentable? What if the process itself occurs in nature in some form? Categories of Subject Matter, revisited Note that in Chakrabarty, the court defines the terms manufacture and composition of matter to include the man-made bacteria / implies that the bacteria of Funk Brothers is not a manufacture Is this right as a matter of statutory construction?

6 Biotechnology: Modern Problems A patent examiner is assigned to evaluate a claim to a DNA sequence. Is this patentable? In any form? Consider the Funk Bros./Chakrabarty line. Is it useful? Is there a role for policy? So far the PTO has allowed: Patents on entire (isolated/purified) DNA sequences. Patents on expressed sequence tags (ESTs) - shorthand versions of DNA sequences. Concerns? These patents are potentially broad (Do EST claims cover their entire corresponding sequence? Do they have large downstream effects?) Not enough innovation / public benefit. (Or, PTO incompetence.) Changing the nature of biomedical research. Tragedy of the Anticommons

7 Biotechnology: Modern Problems Heller & Eisenberg: Tragedy of the Anticommons Intuition: too many overlapping property rights will result in underuse. In post-communist Russia, the use of street kiosks rather than abandoned storefronts. Suggestions in the patent context: Patents on ESTs will complicate the use of the full gene. Patents on research tools will complicate R&D efforts. Licensing process will give upstream players ability to stay at the table in downstream deals. Question 1: Is this really the same scenario as the tragedy of the commons? Consider the incentives of the players in both scenarios.

8 Biotechnology: Modern Problems Heller & Eisenberg: Tragedy of the Anticommons Intuition: too many overlapping property rights will result in underuse. In post-communist Russia, the use of street kiosks rather than abandoned storefronts. Suggestions in the patent context: Patents on ESTs will complicate the use of the full gene. Patents on research tools will complicate R&D efforts. Licensing process will give upstream players ability to stay at the table in downstream deals. Question 2: Isn t t there a market-based solution? Is there any reason to think it might not occur? Assertions: transaction costs, irrational behavior

9 Biotechnology: Modern Problems Heller & Eisenberg: Tragedy of the Anticommons Intuition: too many overlapping property rights will result in underuse. In post-communist Russia, the use of street kiosks rather than abandoned storefronts. Suggestions in the patent context: Patents on ESTs will complicate the use of the full gene. Patents on research tools will complicate R&D efforts. Licensing process will give upstream players ability to stay at the table in downstream deals. Question 3: Is there an anticommons problem in intellectual property? (What is the commons?? Is it fixed and tangible? Can the players affect the scope and nature of the commons?)

10 Biotechnology: Modern Problems Utility & Genetic Inventions The PTO Utility Guidelines. Requires the assertion of at least one well-established utility, one that is specific, substantial, and credible Specific utility: specific to the claim, not general Substantial utility: a real world use Credible utility: based on logic and verifiable facts Consider example on page 537. Is this the right way to address concerns about genomic patents?