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Creating a Research Use Exemption that Better Fulfills the Patent Bargain Katherine J. Strandburg DePaul University College of Law (2004 Wisconsin L. Rev.)

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Presentation on theme: "Creating a Research Use Exemption that Better Fulfills the Patent Bargain Katherine J. Strandburg DePaul University College of Law (2004 Wisconsin L. Rev.)"— Presentation transcript:

1 Creating a Research Use Exemption that Better Fulfills the Patent Bargain Katherine J. Strandburg DePaul University College of Law (2004 Wisconsin L. Rev.)

2 The Shrinking US Experimental Use Exemption Pecuniary interests of the patentee Commercial v. Non-Commercial Nature of the Use But... unstable because Financial motives of infringer (commercial v. non) Financial impact on patentee (incentives to invent) DOOMED TO SHRINK – Legitimate business of the infringer

3 Experimenting on v. Experimenting with Distinction seems to be gaining support Comports with emphasis on disclosure -- use of inventive idea during patent term Separate recouping appropriable investment from control over follow-on innovation

4 Experimenting On Does it undermine incentives to invent? KEY THEORETICAL IDEA: Self-disclosing v. Non-self-disclosing Inventions

5 Experimenting On Incentive to Invent: –Free rider theory –Assumes inventive idea appropriable upon commercialization –Trade secrecy not possible Applies to self-disclosing inventions only! Incentive to Disclose: –Assumes inventive idea not disclosed by commercialization –Trade secrecy possible, patent quid pro quo Applies to non-self-disclosing inventions only!

6 Experimenting On Self-disclosing inventions –Patent system provides reimbursement of investment –Increased disclosure requirements have little effect Non-self-disclosing inventions –Disclosure is primary public payoff –Reimbursement for invention not necessary –Increased disclosure requirements have large effect Experimenting on - inherently differentiates between these two types of inventions - does not have large impact on incentive to invent

7 Experimenting On = increased disclosure requirement Should be permitted Self-disclosing/non-self-disclosing distinction is self-executing

8 Experimenting On v. Experimenting With Proposed test: Could the use be replaced by more information about the invention? YES: Experimenting On NO: Experimenting With

9 What about Experimenting With (Research Tools)? Trickier because cannot separate use of invention and use of inventive idea Research use has: direct impact on patentees market for invention AND direct impact on follow-on innovation

10 When Should We Worry? Only if tool patentee uses exclusivity to slow down publicly beneficial research by: - not commercializing - not licensing to the best researchers Only slows down research if: No close substitutes for tool No close substitutes for research problem

11 When Might This Happen? Tail Wagging the Dog? Easy research tools, difficult research - Tool inventor competence - Tool inventor resources - Misaligned incentives: Reputational incentives Larger share of smaller pie

12 Can We Distinguish... Easy tools, Hard research (tool patent may be a problem) v. Hard tools, Easy research (tool patent not a problem) Inventor control of follow-on innovation (may be a problem) v. Inventor recovery of investment (purpose of patent)

13 Proposal Separate exclusivity term from investment recovery term Two-tier patent term 3-4 years complete exclusivity followed by compulsory licensing Gives tool inventor chance to demonstrate: hard tool/easy research competence intent to promote rapid research

14 Thoughts on TRIPS Article 27: OK? Article 30: limited? not unreasonable conflict with normal exploitation? not unreasonably prejudice legitimate interests (patent holder and third parties) Article 31: Could work if procedure designed appropriately

15

16 Figure 1 T Invention No Invention Fig. 1 R

17 Figure 2 No Invention Invention R T P No Invention P R T

18 Figure 3 Invention w/Patent Invention w/ or w/o Patent R T P Self-Disclosing Non-Self-Disclosing R T P

19 Figure 4 Self-Disclosing Patent R T P Non-Self-Disclosing Trade Secret Non-Self-Disclosing Trade Secret or Patent

20 Figure 5 R P T IIIIII I

21 Figure 6 S IRIR I 3R =I c I 3P I 3S AB C D


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