Utility

9.6.2011

Patent Law

Prof Merges

Newsflash

• Senate to vote on “cloture” and possible amendments re Patent Reform tonight

• Could even pass the House bill – may get patent reform this week, or maybe not

Utility – Section 101

Whoever invents and new AND USEFUL

machine, manufacture, . . .

Main Trouble Areas

• No known utility (“perpetual motion machines”)– Newman v. Quigg, 877 F.2d 1575 [ 11 USPQ2d 1340]

(Fed. Cir. 1989) (claims to a perpetual motion machine ruled inoperable)

• Malicious utility– a "useful" invention is one "which may be applied to

a beneficial use in society, in contradistinction to an invention injurious to the morals, health, or good order of society, or frivolous and insignificant"

Third major trouble area

• Chemical, pharmaceutical, and biotech-related inventions

• Why? The nature of chemistry-related research

– Structures (molecules) and their uses . . .

Justice Story View

• Appendix, Note on the Patent Laws, 3 Wheat. 13, 24. See also Justice Story's decisions on circuit in Lowell v. Lewis, 15 Fed. Cas. 1018 (No. 8568) (C. C. D. Mass.), and Bedford v. Hunt, 3 Fed Cas. 37 (No. 1217) (C. C. D. Mass.).

Brenner v Manson

• This is not to say that we mean to disparage the importance of contributions to the fund of scientific information short of the invention of something "useful," or that we are blind to the prospect that what now seems without "use" may tomorrow command the grateful attention of the public.

Brenner, cont’d

• But a patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion. "[A] patent system must be related to the world of commerce rather than to the realm of philosophy. * * *"

In re Brana 34 U.S.P.Q.2d 1436

C.A.Fed. 1995

Brana, cont’d

N: Markush group

R1-R4: Markush groups

Brana cont’d• FDA approval, however, is not a prerequisite for finding a

compound useful within the meaning of the patent laws. Usefulness in patent law, and in particular in the context of pharmaceutical inventions, necessarily includes the expectation of further research and development.. Were we to require Phase II testing in order to prove utility, the associated costs would prevent many companies from obtaining patent protection on promising new inventions, thereby eliminating an incentive to pursue, through research and development, potential cures in many crucial areas such as the treatment of cancer.

-- 34 U.S.P.Q.2d 1436, 1443

Project Initiation: Pure Concept Stage

Promising Experimental Results: Brenner v. Manson

Promising Clinical Results, e.g., in vitro – In re Brana

Working Model or Prototype; in vivo effectiveness

The Oklahoma Land Rush – A Good Use of Resources?

Mining Claim Systems:

Require-ments and Timing Issues

Some quick economics

Terry L. Anderson & Peter J. Hill, The Race for Property Rights, 33 J.L. & Econ. 177 (1990)

David D. Haddock, First Possession Versus Optimal Timing: Limiting the Dissipation of Economic Value, 64 Wash. U. L.Q. 775 (1986).

Dean Lueck, The Rule of First Possession and the Design of the Law, 38 J.L. & Econ. 393 (1995)

Terry L. Anderson – Montana State; Hoover Institution

David Haddock, Northwestern Law School

Ex Parte Fischer

• Major case involving “expressed sequence tags”

• Utility the key issue: did inventors demonstrate patentable utility as of the filing date of the patent?

Fischer claim 1: p. 241

A substantially purified nucleic acid molecule that encodes a maize protein or fragment thereof comprising a nucleic acid sequence selected from the group consisting of SEQ ID NO: 1 through SEQ ID NO: 5.

Ex Parte Fischer

• Claim 1, Casebook p. 241

– “Substantially purified” – echoes of Parke-Davis

– “Selected from the group consisting of . . .”

•What is this claim form?

Markush Group

• “An article of clothing, selected from the group consisting of–Shirts–Shoes–Pants”

• “A chemical entity selected from the group consisting of–Carbon–COOH–CH(6)”

Expressed Sequence Tags

Most DNA: Unknown Function

The good stuff: DNA that codes for a protein

EST: Short “Tag”

Multiple Biotechnology Patents: SNP/EST Example

C Owns SNP_3/EST_3

A Owns SNP_1 (Or EST_1)

B Owns SNP_2/EST_2

Fischer

• What utilities are claimed? – P. 3

– “determining a relationship between a polymorphism and a plant trait”

– “isolating a genetic region . . . Or mapping”

– “determining [protein] levels . . .”

Fischer - holding

• P 22

–Immediate utility is to conduct further experiments

–Too attenuated under Brenner and Brana

“Expressed Sequence Tag” Patents: policy issues

• Bad Idea! Eisenberg & Merges opinion letter, 1995

• Patent law’s “utility requirement” bars these patents

• Why? “Capturing someone else’s investment” dominates incentive motive; Transaction Costs a Major Issue

Transaction Costs

End Product

Firm E

A

B

C

Transaction Costs II

A

B

C

End ProductEnd ProductEnd Product

Capturing Someone Else’s Investment

• Disproportionate reward

• The Proportionality Principle in IP Law