Utility

Intro to IP – Prof Merges

Jan. 19, 2010

Utility – Section 101

Whoever invents and new AND USEFUL

machine, manufacture, . . .

Utility

• Two Main sets of Issues

– Timing: WHEN in the sequence of events leading up to a product innovation should a patent application be permitted?

– WHAT TYPES of invention are so “useless” they do not deserve a patent?

Traditional Chemical/Pharmaceutical Research

Development ofOrganic Molecules

In vitro Testing

In vivo Testinganimals

In vivo Testinghumans

Number of compounds assessed

Development ofOrganic Molecules

In vitro Testing

In vivo Testinganimals

In vivo Testinghumans

Number of compounds assessed

Cost ofResearch

New compound

High biological activity

Structural similarity to

useful products

Reasonable correlation

between results and utility

Results in animals

Results in humans

Traditional Chemical/Pharmaceutical Research

Satisfies Utility Requirement

Brenner v. Manson, 383 U.S. 519 (1966)

An adjacent homologue of the steroid yielded by the process has been demonstrated to have tumor-inhibiting effects in mice.

• failed to disclose a sufficient likelihood that the steroid yielded by the process would have similar tumor inhibiting characteristics.

• high unpredictability of compounds in the field.

Brenner v. Manson, 383 U.S. 519 (1966)

“The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention of substantial utility. Unless and until a process is refined and developed to this point – where specific benefit exists in currently available form – there is insufficient justification for permitting an applicant to [monopolize] what may prove to be a broad field.”

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. * * *"

Harlan dissent

To encourage one chemist or research facility to invent and disseminate new processes and products may be vital to progress, although the product or process be without ‘‘utility’’ as the Court defines the term, because that discovery permits someone else to take a further but perhaps less difficult step leading to a commercially useful item.

What is missing from the Harlan view?

• The idea that patents, and IP generally, are only one factor that affects invention, dissemination, and commercialization

• Rewards and norms in the practice of scientific research affect research and disclosure

The Contemporary View

• Patents may interfere with disclosure as much as they facilitate it

• IP rights may “squeeze out” research and disclosure that would occur in their absence

Scholarly support

• Chris Sprigman and Kal Raustiala, "Where IP Isn’t”, Va. L. Rev. In Brief (2007).

• Work by Rebecca Eisenberg

Project Initiation: Pure Concept Stage

Promising Experimental Results: Brenner v. Manson

Promising Clinical Results, e.g., in vitro

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

In re Fischer

• Claim 1

– “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 . . .”

Fisher - holding

–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? “Rent Seeking” Dominates incentive motive; Transaction Costs a Major Issue

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"

Juicy Whip

• You can see these themes in this case

• “Beneficial utility”

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.).

“The fact that one product can be altered to make it look like another is in itself a specific benefit sufficient to

satisfy the statutory requirement of utility.”

Cubic zirconiumGold Leaf

Juicy Whip, Inc. v. Orange Bang, Inc., U.S.P.Q.2d 1700 (Fed.Cir. 1999)

Beneficial (Moral) Utility