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F. Legislative Proposals for Safe Harbor
As previously noted, research tools are a relatively new phenomena in patent law. These inventions are useful as tools to generate data in research fields such as biotechnology. They often constitute subject matter of questionable patentability, including facts and naturally occurring subject matter, such as genes, proteins, and naturally occurring compounds.226 Europe deals with this problem with a specific carve-out for research tools.227 The United States, however, continues to hold that the best courses for the protection of research tools are patents. Patents provide continuing incentives to produce the tools and also encourage the rapid development of science and technology. Until compelling circumstances arise to directly address problems inherent in research tools, Congress is unlikely to act.228 Nonetheless, experts on the problems associated with research tools have proposed a number of solutions to the problems associated with these tools, generally under a codified research exemption. Many address the problem with respect to the applicability of research tools to § 271(e)(1).
1. Limiting the Research Exemption
In 1989, Rebecca Eisenberg proposed three conditions under which the use of research tools would be exempted.229 First, use of the patented tool would be permitted to test the validity of the patent claims, allowing the scientific community not only to ensure that the claims merit a patent, but also to scrutinize the research itself and bring to light erroneous claims. Second, Eisenberg’s proposal would permit uses of the patented research tools for the purposes of subsequent research that tends to improve the tool.230 The second prong might actually be overly broad considering the justified fears within the biotechnology community that unfettered access to a tool could undermine the value of the tool.
Eisenberg addressed this fear in the third prong of the test she proposed: no exemption would be afforded for “invention[s] with a primary or at least significant market among research users.”231 For tools, however, one could argue that the primary market will always be undermined with unfettered access to the tool. While this is probably true for many broad spectrum research tools, many other tools, such as compounds, genes, and enzymes, would
226 PATENT SYSTEM, supra note 17, at 28.
227 European Patent Convention Art. 52(1), Patentable Inventions, (European patent law grants patents only for those inventions "susceptible of industrial application.").
228 PATENT SYSTEM, supra note 17, at 115.
229 Rebecca S. Eisenberg, Patents and the Progress of Science: Exclusive Rights and Experimental Use, 56 UNIVERSITY OF CHICAGO LAW REVIEW 1017, 1054 (1989).
230 Id. at 1056-1057. Eisenberg correctly points out that the transaction costs associated with obtaining a license for every patented invention constitute a "significant burden for researchers." Id. at 1057.
231 Id. at 1074.
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be available to the research community.
2. Adopting the Fair Use for Patent Law
Unlike Eisenberg’s proposal, Maureen O'Rourke’s proposal takes a markedly different direction.232 She proposed that patent law adopt a principle similar to the fair use defense in copyright law.233 The doctrine would adhere to a five factor test, similar to the fair use analysis in copyright.234 Factor one would consider “the nature of the advance represented by the infringing work.”235 Essentially this boils down to a balancing test between the value of the invention to society and the right of the patent holder for remuneration. Factor two would consider “the purpose of the infringing use.” This factor differentiates between commercial and non-commercial uses of patented inventions, including tools, which have a large market of non-commercial uses stemming from university research. Factor three would consider “[t]he nature and strength of the market failure that frustrates licensing.”236 If the invention is not actively being licensed, then courts may allow for otherwise infringing uses where market forces restrict commercialization of the invention. The fourth factor would consider the overall impact of the otherwise infringing use on the market. Finally, O'Rourke's proposal considers the nature of the patented work itself.237
The fifth factor would likely determine whether research tools are exempted under O'Rourke’s fair use doctrine for patent law. For example, broad spectrum tools are not likely to meet the threshold of fifth factor, because the nature of the tool is more of an “end product.” Additionally, because the entire market for a broad spectrum research tools can potentially be subsumed by allowing for a fair use, they may fail the threshold of the fourth factor as well. For tools like genes, cell lines, and enzymes, the case for fair use is better because of the limited market and the fact that these “inventions” are so close to unpatentable subject matter. However, in the end, exempting these more limited market research tools may be a moot point because researchers will still have the challenge of acquiring these types of tools without undue experimentation.
Maureen O’Rourke's proposal, while intriguing in principle, fails to take into account some of the hallmark differences between copyright law and patent law. For example, as previously noted, patent law receives one-fifth of the term of a copyright. However, the
232 Maureen A. O’Rourke, Toward a Doctrine of Fair Use in Patent Law, 100 COLUMBIA LAW REVIEW 1177 (2000).
233 Id. at 1177.
234 17 U.S.C. § 107(1)-(4), Limitations on exclusive rights: Fair use. (1994 & Supp. III 1997) (outlining the statutory factors for fair use in copyright).
235 O’Rourke, supra note 232, at 1206.
236 Id.
237 Id. at 1207-08.
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scopes of the patent rights are more absolute. Introduction of a fair use doctrine in patent law without a corresponding increase in the term of the patent undermines some of the incentives of patents. Unlike copyrighted subject matter, patents generally require a greater up-front investment and more scrutiny before the right is granted.238 Moreover, society has a corresponding interest in bringing inventions to the public domain more quickly than copyrights.
3. Applying the Compulsory Licensing
Katherine Strandburg proposed a more middle of the road approach: a exemption for experimentation regardless of the motivation.239 Her proposal differentiates between
“experimenting on” a patented invention and “experimenting with” a research tool. The
“experimenting on” idea continues the progress of science. Under the “experimenting with”
provision, she proposed either a compulsory licensing scheme or a straight exemption for non-profit entities.240 However, an exemption for non-profit entities is problematic for a number of reasons, leaving the compulsory licensing scheme as the better alternative. Under a compulsory licensing scheme, anybody should be able to use and have access to the tool provided that they are willing to pay the licensing fee.241
Strandburg’s proposal solves many of the problems discussed previously regarding the externalities accompanying transfer of research tools. However, it also deprives patent holders of the right to set their price for their invention. In effect, it assumes that research tools have relatively the same value; in reality, research tools cover a wide range of values and development costs. Tools that cost more to develop should naturally cost more to use, which makes the calculation of royalties on externalities in and of it problematic. Moreover, not all research tools are alike. Some tools are quite specialized, restricting the potential market and making the calculation of a royalty difficult. Conversely, broad spectrum tools have more universal appeal and can be marketed in numerous ways, from using a Cohen-Boyer paradigm to squeezing the market for every last cent that the tool can recover.
Again, the source of the tool (whether a not-for-profit entity or private entity), the nature of the tool create widely varying value.
238 In other words, a copyright is automatic upon fixing the work in a tangible medium of expression; a patent is granted only after extensive review by the United States Patent and Trademark Office, with no guarantee that the patent will be granted. See Rebecca S. Eisenberg, Patents and the Progress of Science: Exclusive Rights and Experimental Use, 56 UNIVERSITY OF CHICAGO LAW REVIEW 1017, 1054 (1989), at 1024-26; O’Rourke, supra note 232, at 1186.
239 Katherine J. Strandburg, What Does the Public Get? Experimental Use and the Patent Bargain, 2004 WISCONSIN LAW REVIEW 81, 123 (2004).
240 Id. at 135-139.
241 Id. at 139.
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4. Expanding the Research Exemption for Non-commercial Use
Rochelle Dreyfuss suggested a research exemption for non-commercial uses of patented inventions.242 Dreyfuss’s rationale is based on preserving the “public domain of science” in light of the scientific community’s growing reliance on research tools.243 This proposal is problematic where the use of a research tool leads to the discovery of a commercially valuable invention. In such cases, the discoverer of the commercially valuable invention would be permitted to essentially “buyout” the use of the research tool.244