Transcript Slide 1

The Role of Courts for Sustainable Innovation
- As Predominantly Reflected in Case Law on Patentable Subject Matter -
Joseph Straus, Munich/Pretoria
2013 Tongji Global Intellectual Property Forum,
Tongji IP Institute, Shanghai, December 4, 2013
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Topics to Consider
• The rationale of the patent system & IP rights in general
• Science & technology – perpetual challenge for legislature
• Courts as key interpreters of "law" and "technology" – pacemakers of
technological innovation
• Innovation – shared responsibility of legislature & courts
• Some concluding thoughts – from a European perspective
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The Rationale of the Patent System & IP Rights in General
• "To promote the Progress of Science and Useful Arts, by securing for
limited times to Authors and Inventors the exclusive rights to their
respective Writings & Discoveries"
U.S. Const. Art. I, § 8, cl. 8
• "[T]he Patent Clause reflects a balance between the need to
encourage innovation and the avoidance of monopolies which stifle
competition without any concomitant advance in the 'Progress of
Science and Useful Arts'".
U.S. Supreme Court, Bonito Boats, 489 U.S. at 146
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The Rationale of the Patent System
„The ground for granting a patent to the inventor is ultimately the
public interest in scientific and technological progress. Therefore the
unlimited protection of the patent is not justified in a case where the
further development of technology is hindered. The patent right – in
the national sector as well as in principle in foreign law is aimed at
promoting technological progress and stimulating the spirit of
invention in the industry in a profitable manner.“
German Federal Supreme Court [1998]
R.P.C. 423 (435) – Confirmed by the
German Federal Constitutional Court in 2000
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The Genuine "Traditional" Function of a Patent
“It is clearly settled at law that a man, to entitle himself to the benefit
of a patent for monopoly, must disclose his secrets and specify his
invention in such a way that others may be taught by it to do the
thing for which the patent is granted, for the end and meaning of the
specification is to teach the public after the term for which the
patent is granted, what the art is, and it must put the public in
possession of secret in as ample and beneficial a way as the
patentee himself uses it…”
[Judge Buller in King v. Arkwright (1785)]
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The Rationale of the Patent System & IP Rights
TRIPS Objectives
• The protection and enforcement of IP rights should contribute to
– the promotion of technological innovation and
– the transfer and dissemination of technology
– the mutual advantage of produces and users of technological
knowledge, and
• in a manner conducive to social and economic welfare, and to a
balance of rights and obligations.
Article 7 TRIPS
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Science & Technology – Perpetual Challenge for Legislature
The Problems of Legislatures & Courts
• Any system of positive law which attempts to regulate matter relating
to imperfectly understood mental or physical facts – problem loaded
• They are not the development of evident and necessary truths, but
are built up through the interpretations given by the courts to the
terms in which the arbitrary will of the legislative body is expressed.
• Terms not always carefully selected, nor accurately adapted to the
subjects which they are intended to control
• Court's interpretations are characterized by many apparent
contradictions, by much uncertainty of language, and by frequent
confusion of ideas which are, in themselves, essential dissimilar
W.C. Robinson, The Law of Patents [1890]
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Science & Technology – Perpetual Challenge for Legislature
Terms Left to Courts for Interpretation & Application
Inter alia
"Technology", "Discovery", "Invention", "Laws of Nature", "Physical
Phenomena", "Abstract Ideas", "Apparatus", "Process", "Machine",
"Computer Program", "Microorganism", "Plants", "Animals", "Plant &
Animal
Varieties",
"Essentially
Biological
&
Non-Biological
Processes", etc.
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Technology – An Evolutionary Notion
The Response of the Courts
• Can an invention for breeding doves be patented?
• According to § 1(1) of the Patent Act – Unchanged since 1877 –
patents available for new inventions that permit industrial application
• Originally – this was interpreted as a teaching of a technical character
employing physical and chemical means alone known as predictable at
the time the act was passed
• However, this original view can no longer determine interpretation of
the Patent Act, because science and technology have changed
significantly in the meantime
German Fed. Supreme Court - Red Dove Decision [1969]
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Technology – An Evolutionary Notion
The Response of the Courts
• An historical interpretation of the term invention is even more
unsatisfactory because invention is a basic concept in a field of law
having as its most important task encompassing the patentable results of
the most recent states of science and of research.
• Therefore, the intent of the Patent Act itself not only permits but even
compels drawing upon the latest state of scientific knowledge to interpret
the concept of invention, which was not construed more precisely by the
legislator and which by its nature requires judicial determination
German Fed. Supreme Court - Red Dove [1969]
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Technology an Evolutionary Notion & Ethics
Living v. Non-Living
• Can a genetically modified microorganism be patented?
• Not patentable: Laws of nature, physical phenomena and abstract
ideas
• Patentable: anything under the sun made by man
• “Congress… recognized that the relevant distinction was not between
living and inanimate things, but between products of nature, whether
living or not, and human-made inventions.”
• “The briefs present a gruesome parade of horribles. Scientists, among
them Nobel Laureates are quoted suggesting that genetic research
may pose a serious threat to the human race, or …”
U.S. Supreme Court - Diamond v. Chakrabarty [1980]
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Technology an Evolutionary Notion & Ethics
Living v. Non-Living
• “It is argued that this Court should weigh these patented hazards in
considering whether respondent’s invention is patentable subject
matter under 101. We disagree…”
• “The choice we are urged to make is a matter of high policy for
resolution within the legislative process after the kind of
investigations,…, that legislative bodies can provide and courts
cannot.”
U.S. Supreme Court - Diamond v. Chakrabarty [1980]
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Courts as Pacemakers of Innovation
Discovery v. Invention
“It is trite law that you cannot patent a discovery, but if on the basis of
that discovery you can tell people how it can be usefully employed, then
a patentable invention may result. This in my view would be the case,
even though once you have made the discovery, the way in which it can
be usefully employed is obvious enough.”
Whitford J - Genentech Inc's Patent [1987]
Expressly approved by HOL - Kirin-Amgen Inc. v. Hoechst Marion Roussel [2005]
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Courts as Pacemakers of Innovation
Manner of Manufacture under Section 18(1)(a)
Australian Patent Act
“There is no doubt that naturally occurring DNA and RNA as they exist
inside the cells of the human body cannot be the subject of a valid patent.
However, the disputed claims do not cover naturally occurring DNA and
RNA as they exist inside such cells. The disputed claims extend only to
naturally occurring DNA and RNA which have been extracted from cells
obtained from the human body and purged of other biological materials
with which they were associated.”
Federal Court of Australia - Cancer Voices Australia v. Myriad Genetics [2013]
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Courts as Pacemakers of Innovation
Practical Considerations v. Theoretical Reflections
"In accordance with the purpose of the Patent Act to promote technical
progress and stimulate the inventive spirit for industry in a beneficial
manner practical considerations also deserve stronger recognition than
theoretical reflections in the interpretation and application of the Patent
Act."
German Fed. Supreme Court - Rabies Virus [1987]
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Courts as Pacemakers of Innovation
Experimental Use Exemption
• Experiment under Sec. 11 No. 2 Patent Act
“… any planned act for the acquisition of knowledge, independent of
the purpose for which the acquired knowledge is intended to
serve eventually.”
• The subject matter of the invention must be the object of the test
activity for the purpose of gaining knowledge
• Covers acts performed to determine the effects of a substance or
new previously unknown applications – further medical uses
• Test may, eventually, serve commercial interests
German Fed. Supreme Court – Clinical Trials I [1997]
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Courts as Pacemakers of Innovation
Experimental Use Exemption
• Clinical trials with substances of same indication allowed as long as
not solely aimed at clarifying commercial facts, such as market needs,
price acceptance and marketing possibilities but not at further clarifying
properties, effects, possible uses and production possibilities of the
subject matter of an invention
• Even if introduced and carried out with the commercial goal of
obtaining marketing authorization with the data obtained
German Fed. Supreme Court – Clinical Trials II [1998]
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Courts as Pacemakers of Innovation
Limits of the Experimental Use Exemption
- Europe's Approach -
• Yardstick: activity aimed at gaining new knowledge – enriching the
state of the art
• Not covered: use of the invention as research tool (PCR, ESTs),
i.e. for the patented purpose
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Courts as Pacemakers of Innovation?
Limits of the Experimental Use Exemption
- US Approach • "[I]t could never have been the intention of the legislature to punish a
man, who constructed such a machine merely for philosophical
experiments, or for the purpose of ascertaining the sufficiency of the
machine to produce its described effects."
Justice Story - Whittemore v. Cuttler [1813]
• Only if the act is "solely for amusement, to satisfy idle curiosity, or for
strictly philosophical inquiry" – no infringement
CAFC, Embrex v. Service Engineering [2000]; Madey v. Duke [2002]
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Courts as Pacemakers of Innovation
Selection Inventions
• With the disclosure of a chemical structural formula, the individual
compounds covered by this formula are, in principle, not yet disclosed.
• Deciding factor – whether the concrete compound disclosed
• Required information that easily enables the person skilled in the art to
specifically implement the invention relating to this chemical compound,
i.e. to obtain the specific compound
• Otherwise – in case of pre-published chemical structural formula with
some medical indications nobody could invest in clinical trials to identify
the specific and useful compound!
German Fed. Supreme Court – Olanzapine [2008]
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Courts as Pacemakers of Innovation
Legal & Economic Consequences – US & Europe
• Numerous patents granted on genomic & cDNA encoding proteins,
hormones or representing diagnostic markers, GM plants, etc.
• Repeatedly challenged in courts – never viewed as – in principle unpatentable
• Provided the foundation for a new branch of industry – biotechnology
• New companies emerged, e.g. Amgen, Biogen, Cetus, Chiron,
Genentech and many more
• New drugs and diagnostics developed & entered the market:
recombinant h-insulin, erythropoietin, GCFS (Neupogen), hGH, HCV,
HIV, BRAC diagnostics – many based on patents claiming genomic
DNA: not a multi billion business only and clear US lead, but cures and
diagnostics for patients world-wide!
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Statistics on Patents Granted in the US
Nature Biotechnology, October 2013
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US "Gene" Patents Granted
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Nature Biotechnology, October 2013
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Courts as Pacemakers of Innovation
Top Ten Categories of Biologic Drugs in Terms of US Sales
Source: Nature Biotechnology , October 2007
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Courts as Pacemakers of Innovation
Top 18 Companies that Comprised the Majority of Sales
of Biologic Drugs
Source: Nature Biotechnology, October 2007
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Courts as Pacemakers of Innovation
Development of Venture-Capital Investments
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Courts as Pacemakers of Innovation
Value of Venture-Backed IPOs
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Courts as Pacemakers of Innovation
FDA New Molecular Entities and Biologics Approvals 1997-2011
Source: Nature Biotechnology, 2012
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Courts as Pacemakers of Innovation?
Patent DE 197 56 864 C1 of April 29, 1999 - Dr. O. Brüstle
Neural precursors, method of production and use for therapy of neural
defects
Claims:
1.Isolated, purified precursor cells with neuronal or glial characteristics
from embryonic stem cells1)2) containing at most about 15% of primitive
embryonic and non-neural cells, obtainable through the following steps:
a)
culturing of ES-cells to embryoid bodies
b)
....
5. Cells according to one of the Claims 1-4, whereby the embryonic stem
cells from oocytes are obtained after a nuclear transplantation
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Courts as Pacemakers of Innovation?
No Patents for Human Embryonic Stem Cells in Europe
•
•
•
•
•
•
•
Applied the broadest possible definition of an embryo
No protection available for all inventions using stem cells derived from
destroyed human embryos
No matter how legal the stem cells were generated
No matter that the invention claimed does not use human embryos and
is not dependent on their repeated use
No matter that the generation of human pluripotent stem cells and stem
cell lines is not even described
No matter that products derived from human embryonic stem cells may
be commercialized in a number of EU Member States – Art. 27(2) TRIPS
compliance?
Everybody can (even) commercially use/exploit the respective invention
free of charge! Strange ethics!
CJEU (Grand Chamber) - Brüstle v. Greenpeace [18 October 2011]
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Courts as Pacemakers of Innovation
No Exhaustion of Rights in Patented Seeds
Held:
• Patent exhaustion does not permit a farmer to reproduce patented
seeds through planting and harvesting without the patent holder's
permission
• Exhaustion doctrine restricts the patentee's rights only as to the
"particular article" sold – it leaves untouched the patentee's ability to
prevent a buyer from making new copies of the patented item.
• By planting and harvesting Monsanto's patented seeds, Bowman
made additional copies of Monsanto's patented invention
• His conduct thus falls outside the protections of patent exhaustion
US Supreme Court – Bowman v. Monsanto Co. et al. [2013]
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Courts as Pacemakers of Innovation?
Genomic DNA Not Patentable
We hold that:
• A naturally occurring DNA segment is a product of nature and not
patent eligible merely because it has been isolated
• But that cDNA is patent eligible because it is not naturally occurring
• Patentable processes for manipulating and isolating genes, as well
as new applications of genes
• Not decided: patentability of DNA in which the order of the naturally
occurring nucleotides has been altered
US Supreme Court – Association for Molecular Pathology et al. v. Myriad Genetics Inc. [2013]
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Courts as Pacemakers of Innovation?
Myriad's Consequences
• No patents on genomic DNA – granted and still in force patents can
be challenged and not defended
• The reach goes [could go] far beyond human genomics and
genomics in general
• Potentially puts into question patents on isolated biological material in
general
• May seriously affect [high]risk investments in this entire area
• It may be used in Europe against the rules set forth in the EU Biotech
Directive – allowing such patents
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Courts as Pacemakers of Innovation?
Concerns Raised
• Non-statutory unpatentable subject matter – an area where the newly
activist Supreme Court needs to act with caution
• Recent decisions* over laws and products of nature have upset longstanding understanding of what is and what is not patentable – creating
great uncertainty within research programs that have a long gestation
• Business – it is often said – hates uncertainty and may hold back
research funding in genomics until the patentability uncertainties are
resolved
Prof. W. Lesser (2013)
* Mayo Cell. Serv. v. Prometheus Labs [2012]
Association for Molecular Pathology et al. v. Myriad Genetics Inc.
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Innovation – Shared Responsibility of Legislature & Courts
• Legislature – to provide a statutory framework flexible enough to
enable courts to cope with challenges of science and technology
according to the mission and rationale of the patent system
• Courts - to interpret and apply positive law in compliance with the
mission and rationale of the patent system, i.e. to promote
technological innovation
• Legislature – to provide for statutory relieve if case law does not or
cannot comply with the mission of the patent system, e.g. by
adopting specific rules on "experimental use", patents on natural
products, or patentability of human pluripotent embryonic stem cells.
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Some Concluding Thoughts – From a European Perspective
• Over centuries the patent system – if applied in line with its
genuine mission has proven as a reliable promoter of technological
innovation
• The patent system has not been conceived for any particular
technological world but as a permanent incentive for technological
innovation in general
• Law makers and courts should respect the genuine mission of the
patent system and act accordingly!
• They are responsible for promoting technological innovation also to
the benefit of future generations!
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Thank you
for your attention!
谢谢大家听我的发言！
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