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Creating a Research Use
Exemption that Better Fulfills
the Patent BargainKatherine J. Strandburg
DePaul University College of Law(2004 Wisconsin L. Rev.)
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”
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
“Experimenting On”
Does it undermine incentives to invent?
KEY THEORETICAL IDEA:
Self-disclosing
v.
Non-self-disclosing Inventions
“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!
“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
“Experimenting On”
• = increased disclosure requirement
• Should be permitted
• Self-disclosing/non-self-disclosing distinction is “self-executing”
“Experimenting On”v.
“Experimenting With”
Proposed test:
Could the use be replaced by more information about the invention?
YES: “Experimenting On”NO: “Experimenting With”
What about “Experimenting With” (Research Tools)?
• Trickier because cannot separate use of invention and use of inventive idea
Research use has:
direct impact on patentee’s market for invention
AND• direct impact on follow-on innovation
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 toolNo close substitutes for research
problem
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
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)
Proposal
• Separate “exclusivity term” from “investment recovery term”
• Two-tier patent term3-4 years complete exclusivityfollowed by compulsory licensing
Gives tool inventor chance to demonstrate:“hard” tool/”easy” researchcompetenceintent to promote rapid research
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
Figure 1
T
Invention
No Invention
Fig. 1
R
Figure 2
No Invention
Invention
R
T
P
Invention
No Inve
ntion
P
RT
Figure 3
Invention w/Patent
Invention
w/ or w
/o
Patent
R
T
P
Self-Disclosing
Non-Self-
Disclosin
g
R
T
P
Figure 4
Self-Disclosing Patent
R
T
P
Non-Self-DisclosingTrade Secret
Non-Self-DisclosingTrade Secret or Patent
Figure 5
R
P
T
I II III
I
Figure 6S
IRI3R=Ic I3P
I3S
A B
C
D
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