A comparative analysis: current solutions to the anticommons threat.

• Author: Marshall, Chase A.

1. INTRODUCTION II. CURRENT PATENT SYSTEM AND PROBLEMS PRESENTED TO THE BIOTECHNOLOGY FIELD A. History of the Current Patent System and its Drawbacks B. Problems Faced by the Biotechnology Field Regarding Patents and Material Transfer III. CURRENT "SOLUTIONS" TO THE THREAT OF THE ANTICOMMONS A. Patent Pools B. Patent Commons C. Open Source IV. ANALYSIS A. Number of Patents Being Granted and Patent Thickets B. Scope of Patents and the Number of Patents Involved in a Biotech Project C. Reach Through License Agreements (RTLAs) D. Material Transfer Agreements (MTAs) V. WHICH SYSTEM BEST SOLVES THE THREAT OF THE ANTICOMMONS? A. Patent Pools B. Open Source Patenting C. Patent Commons VI. CONCLUSION Cite as 12 J. HIGH TECH. L. 487 (2012)

1. Introduction

   There is a growing concern and discontentment for the current patent system, particularly in the field of biotechnology. In 1998, Michael Heller and Rebecca Eisenberg coined the phrase "The Tragedy of the Anticommons" in their article in Science while discussing the potential problems that can arise when too many broad patents are assigned for early-stage scientific research. (1) The idea of the anticommons arose, in part, due to liberal granting of patents by the U.S. Patent and Trademark Office ("USPTO") in combination with the quick development of biotechnology. (2)

   Heller and Eisenberg mention two mechanisms that can give rise to an anticommons: the first is by creating too many concurrent fragments of intellectual property rights ("IPR"), known as "patent thickets." (3) The second mechanism is permitting "upstream" patent owners to stack licenses onto future discoveries made by "downstream" users. (4) One of the main concerns for the public, which has helped bring this issue to light, is the threat that these upstream patent thickets can create bottlenecks and limit the production of, and ultimately access to, healthcare end-products. (5) The threat of an anticommons has led to the development of some creative solutions to this looming problem. (6)

   Ever since the realization that patents may actually serve to inhibit scientific progress rather than promote it, there has been much discussion and insight introduced concerning the veracity of this concept. (7) There have been a number of solutions presented, and enacted, to the problem of the anticommons, and in Part II this Note will give a brief description of the current patent system and highlight the prominent problems that it presents to the biotechnology field. Part III will introduce and describe three main alternative systems to the current patent system in regard to the field of biotechnology. Part IV will analyze and compare each of these alternative systems and determine which is the most effective solution to each of the particular problems within the current patent system. Part V will analyze which alternative system best solves the overall threat of the anticommons problem.

2. Current Patent System and Problems Presented to the Biotechnology Field

   1. History of the Current Patent System and its Drawbacks

      The Founding Fathers wrote into the Constitution a clause that gave Congress the power to assign to authors and inventors an exclusive right to their respective writings and discoveries for a limited time. (8) This clause led to the Patent Act of 1790, which permitted a patent on "any useful art, manufacture, engine, machine or device, or any improvement therein not before known or used...." (9) Congress soon thereafter amended the patent law, authored by Thomas Jefferson, stating the statutory subject matter of the Act as "any new and useful art, machine, manufacture, or composition of matter, or any new and useful improvement [thereon] ... not known or used before the application...." (10) The broad language of the Act embodied Jefferson's philosophy that "ingenuity should receive a liberal encouragement." (11) Three subsequent patent statutes in 1836, 1870, and 1874 each employed the same broad language as the original Act. (12) When the patent laws were recodified in 1952, (13) Congress replaced the word "art" with "process," but otherwise left Jefferson's language unchanged. (14) The Committee Reports accompanying the Act show that Congress intended the statutory subject matter to "include anything under the sun that is made by man." (15) However, a 1978 case, Parker v. Flook, (16) recognized limits to patentable material including the "laws of nature, physical phenomena, and abstract ideas." (17)

      In the context of scientific research, the part of the patent law that has helped staunch many dubious patents is the utility requirement. (18) The current standard for determining how much utility is required in order for a patent to be granted comes from Brenner v. Manson, (19) stating that there must be substantial utility and a specific benefit. (20) Thus, when a product of research is being offered as patentable, and the utility claimed is that the product may be the subject of further research, this will meet neither the substantial utility nor specific benefit test. (21) Though history shows that the USPTO has not always enforced the substantial utility and specific benefit test strictly, (22) the current case law shows a trend toward stricter rulings on the utility requirement for biotech research products. (23)

      A distinction between upstream and downstream research should be made, as it is important to understanding the concept of an anticommons. While a precise definition is elusive, upstream research is essentially "research that is relatively far removed from a commercial end product." (24) Thus, it can be inferred from this definition that downstream research would be defined as research that is closely related to the production of a specific end product. (25) There is also an implied connection between upstream and downstream research in the context of the anticommons, wherein the downstream research necessarily utilizes or implements the upstream research. (26)

      The distinction between academic research and industry research is important for the purposes of discussing anticommons. Donald E. Stokes describes the theoretical underpinnings for this distinction in his book, Pasteur's Quadrant: Basic Science and Technological Innovation. (27) Stokes states that the root of basic (or academic) research is "to widen the understanding of the phenomena of a scientific field." (28) On the other hand, applied (or industry) research "is directed toward some individual or group or societal need or use." (29) Due to the fact that purely academic research is not performed in the pursuit of producing a commercialized end product, academic scientists generally ignore patents and typically get away with it. (30) This attitude of academic researchers has been described as the "ignoring patents" norm. (31) Conversely, due to the monetary stakes involved in industry research, industry researchers tend to seek and enforce their proprietary rights aggressively. (32)

      After the passage of the Bayh-Dole Act in 1980, (33) the distinction between academic and industry research has been muddled. (34) The Bayh-Dole Act enables, and even encourages, federally funded universities, research institutions, and other non-profit organizations to seek patent protection for their innovations and retain the subsequent royalties. (35) While patenting by research institutions and universities was possible prior to 1980, the Bayh-Dole Act focused attention and priority on moving their innovations into the commercial domain. (36)

   2. Problems Faced by the Biotechnology Field Regarding Patents and Material Transfer

      Inherent in the patent system is a tradeoff between innovation and proprietary rights; in order to promote innovation for the public benefit, there must be some benefit or incentive for the inventor. (37) Lest his hard work should be taken advantage of and exploited by free riders, the inventor will seek some sort of protection for his innovation. (38) If no other form of protection is available, the inventor will be inclined to keep his innovation secret so he may personally exploit it. (39) The patent system seeks to address and compromise between these competing interests. (40) Patent protection provides the inventor with a very short-term monopoly in order to allow him to exploit his invention commercially without fear of being taken advantage of by free riders. (41) The short-term monopoly also addresses the public's interest in benefitting from innovation by ensuring that the invention will be publicly disclosed and available for uninhibited use after twenty years. (42)

      Given the pace of technological advancements in recent years, however, this twenty-year monopoly feels like a lifetime to some researchers who want, or in some circumstances need, instant access to a certain innovation. (43) The patent system and its associated licensing system can look like a mountain to these researchers. (44) There are a number of specific individual aspects of the patent system that, when viewed from the eyes of a biotech researcher, appear to hinder, rather than promote, the innovation and public benefit that they are seeking to provide. (45)

      One of the most basic and obvious problems facing the biotechnology field is the sheer number of patents being granted every year. (46) For biotechnology, the seminal case was Diamond v. Chakrabarty, decided in 1980. (47) Following this landmark decision, patent applications and issuances with "gene" or "DNA" in at least one claim increased dramatically from close to zero in 1981 to a peak of almost 1,500 for "gene" patents, and over 2,000 "DNA" patents, in 1999 alone. (48) As of 2007, over 5,000 U.S. patents have been granted for ordinary DNA sequences. (49) Given the large number of patents, it is not hard to imagine the difficulty of searching through each one in order to determine if a license is required before proceeding with scientific research. (50)

      Another major problem...