1. Replacing Assumptions with Analysis: Use of Transdisciplinary Probes Raleigh, June 2004 Wen Adams McGill Faculty of Law

2. Replacing Assumptions with Analysis Part I: Presentation of the probes Illustrative examples Part II: Using the probes to analyze problems Schmeiser case study

3. Part I: Why Use Probes? More comprehensive and effective analysis For better answers, need to ask better questions Moving beyond incentives-access paradigm Identify new relationships Identify unintended consequences Moving beyond analysis paralysis Generate better research questions and discussion points to bridge the comprehension gap Part I: Presentation of ProbesPart II: Using the Probes

4. Assumptions vs. Probes Assumptions Address problems by referring to abstract principles Lack of Context Innovation is a good thing Patents encourage innovation In any conflict where innovation is affected, patent rights must be protected Part I: Presentation of ProbesPart II: Using the Probes

5. Assumptions vs. Probes Probes Evaluate problems in context Solve problems rather than applying principles Identify relationships Identify affected interests Identify implications and unintended/unanticipated consequences Consider possible (and alternative) solutions Part I: Presentation of ProbesPart II: Using the Probes

6. Assumptions vs. Probes Transdisciplinary Analysis Simultaneous perspective Economics, ethics, management, law Contextual Analysis Avoid unintended consequences Recommendations to meet a variety objectives No universal decrees Allows for flexible (and yet still predictable) policy alternatives Part I: Presentation of ProbesPart II: Using the Probes

7. What are the probes? 1.Distributive justice 2.Innovation management 3.Knowledge management 4.Integrity of living things 5.Sovereignty 6.Economic efficiency 7.Risk management Part I: Presentation of ProbesPart II: Using the Probes

8. Distributive Justice Description Does a given patent regime provide a just allocation of goods, e.g., revenue, access to technology Who benefits, by how much, and who bears the costs? Are the competing interests appropriately resolved? Example TRIPS Agreement Did it maintain or create comparative advantage for developed states? Does linkage-bargain diplomacy work for developing states? Part I: Presentation of ProbesPart II: Using the Probes

9. Innovation Management Description Nexus between patent system and governance of innovation How should research be funded – public, private or mixed? What is the interaction between patents and financing of not only R&D but entire supply chains? Example Universities and granting agencies rely heavily on patent system to produce innovation Is it working? Do patents skew research priorities? Part I: Presentation of ProbesPart II: Using the Probes

10. Knowledge Management Description How do patents affect the diffusion of information? Is information transferred between firms? Within states? Between states? How is information transferred? By licensing, sale, foreign direct investment? Example Licence agreements may alter presumed optimal level of information diffusion put in place through patent disclosure requirements Can require licensee to waive rights to statutory exemptions, e.g., research exemption Part I: Presentation of ProbesPart II: Using the Probes

11. Integrity of Living Things Description How does patenting affect living organisms? Whether species integrity (human and non-human) has inherent value Whether biodiversity can be maintained Example Is a genetically modified mouse a mere “composition of matter”? Does a principled distinction exist between genetic modification of plants and traditional breeding techniques? Part I: Presentation of ProbesPart II: Using the Probes

12. Sovereignty Description Are states able to exercise unconstrained decision-making authority to meet domestic public policy objectives? De jure regulation De facto economic and political reality Example Biotechnology companies claim that patent “havens” will result in reduced levels of foreign investment, as well as domestic flight How to explain offshore research and development? Part I: Presentation of ProbesPart II: Using the Probes

13. Economic Efficiency Description Patent protection a necessary incentive because intangible assets are non-exclusive and non-rival But does it make sense for patent system to operate as “one size fits all”? Example Domestic Incentive effect not constant across industries International Optimal level of protection varies depending upon level of development Part I: Presentation of ProbesPart II: Using the Probes

14. Risk Management Description Management of the various forms of environmental risk and potential harms to human health and biodiversity Precautionary principle Principle of future generations Example Organic certification of canola in Saskatchewan may no longer be possible Part I: Presentation of ProbesPart II: Using the Probes

15. Part II: Using the Probes to Analyze Problems Case Study: Schmeiser Factual background Supreme Court of Canada decision Assumes patent protection a necessary incentive Reconsideration of issues using probes Distributive justice Economic efficiency Part I: Presentation of ProbesPart II: Using the Probes

16. Schmeiser: Factual Background Monsanto has patent rights to gene and cells containing the gene No patent right to whole plant possible in Canada Contamination event (factual uncertainty) Schmeiser identifies genetically modified canola plants on his land Saves seeds and replants crop, but makes no use of herbicide- resistance No contract in place between Monsanto and Schmeiser Can intellectual property rights be enforced to exclude Schmeiser from engaging in these activities? Part I: Presentation of ProbesPart II: Using the Probes

17. Supreme Court of Canada Decision Monsanto wins on the law… Claims are valid Case decided on interpretation of “use”, not scope of claims Use includes furthering a business interest or obtaining a commercial benefit But gains nothing on the facts… Monsanto made decision to seek accounting of profits No profits derived from use of invention because Schmeiser did not make use of herbicide properties Part I: Presentation of ProbesPart II: Using the Probes

18. Implications for Patent Law Indirect patent protection for plants What has happened to “use”? “Use” interpreted in abstract terms to mean commercial return, not physical activity Limited scope for innocent infringer Traditional rule that intention irrelevant makes no sense in circumstances of contamination and self-propagation Part I: Presentation of ProbesPart II: Using the Probes

19. Reconsidering the Result: Distributive Justice Competing property rights Common situation when intellectual property rights are embedded in objects of personal property Monsanto’s intellectual property rights in gene and cells containing the gene Schmeiser’s common law personal property rights in plants containing the cells (and genes) Part I: Presentation of ProbesPart II: Using the Probes

20. Reconsidering the Result: Distributive Justice Where to establish the “ownership divide”? Allocates the aggregated revenue stream of intellectual and personal property rights No intellectual property rights in plants Returns from patents should not include revenue from exploiting personal property Does decision raise possibility that revenue may be misallocated between holders of intellectual and personal property rights? Part I: Presentation of ProbesPart II: Using the Probes

21. Reconsidering the Result: Economic Efficiency It was never about the canola… Cannot examine economic efficiency of patent in isolation of the licence agreements Economic return included sale of off-patent herbicide Round-Up Effectively extended patent term of Round Up Economic return also included licensing rather than sale of seeds Effectively displaces patent exhaustion Overcompensation? Part I: Presentation of ProbesPart II: Using the Probes

22. Do the probes provide value-added analysis? Assumption-based analysis Broad patent protection encourages innovation in agricultural biotechnology Upholding Monsanto’s patent rights economically efficient Benefits society by encouraging socially useful innovation Probes-based evaluation Supreme Court of Canada may have overcompensated Monsanto Need to take into account the effect of the licence agreements No analysis beyond incentives-access paradigm Did not address distributive implications of competing property rights Part I: Presentation of ProbesPart II: Using the Probes