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Policy Levers Tailoring Patent Law to Biotechnology: Comparing U.S

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Policy Levers Tailoring Patent Law to Biotechnology: Comparing U.S Assembled Issue 2 11-7-11 (Do Not Delete) 11/7/2011 10:16 AM Policy Levers Tailoring Patent Law to Biotechnology: Comparing U.S. and European Approaches Geertrui Van Overwalle* In their animated book The Patent Crisis and How the Courts Can Solve It, Dan Burk and Mark Lemley give an account of their quest into the judicial treatment of patents in different industry sectors. They present an in-depth commentary on industry-specific differences in the patent system from both a legal and economic perspective. The present article attempts to enrich the conversation by sketching the situation in Europe and providing an interesting measure for comparison. In doing so, the paper mainly focuses on the legal situation, and does not enter into the economics discussion. The paper concludes that current European patent law holds substantial potential for technology-specific application. Even though the European Patent Convention (EPC) may have been conceived at its inception as a nominally neutral patent statute, our study clearly reveals that substantial discretion to differentiate the patent system by industry, and in particular to tailor it to the specificities of the biotechnology sector, has been built into the system over the years. Although the EPC was introduced as a unitary regulatory tool, intended to operate the same way across technologies, European Patent Office (EPO) case law has shown increased interest and ability in tailoring patent law to the needs of distinct technology sectors, and in particular the biotechnology sector. Given the civil law tradition in which European patent law operates, a prevalence of well-articulated macro rules openly set forth by the legislature was anticipated. However, a clear predominance of jurisprudential micro policy levers has emerged. * Professor of IP Law at the University of Leuven (Belgium), Professor of Patent Law and New Technologies at Tilburg University (the Netherlands). The research for the present paper was concluded in April 2010. Any developments since have not been taken into consideration systematically. The author wishes to express her gratitude to Stefan Bechtold and Liesbet Paemen for their constructive comments on an earlier draft of this chapter. The author also gratefully acknowledges the support of the Vancraesbeeck Fund. 435 Assembled Issue 2 11-7-11 (Do Not Delete) 11/7/2011 10:16 AM 436 UC IRVINE LAW REVIEW [Vol. 1:2 Not all European policy levers uncovered in the present study work to the advantage of the biotechnology industry. Closer analysis of the various policy levers reveals that rather than systematically expanding the patent system to accommodate biotechnology inventions and stimulating innovation in the biotechnology sector, some policy levers narrow down the patent potential for biotechnological inventions, in an attempt to respond to concerns of public health and ethical conscience. 1. Introduction ................................................................................................................. 437 1.1. “The Patent Crisis” .................................................................................... 437 1.2. Objective and Scope of the Present Study ............................................. 439 1.2.1. European patent law ...................................................................... 439 1.2.2. Policy levers ..................................................................................... 442 1.2.3. Biotechnology .................................................................................. 444 2. Biotech-Specific Policy Levers in Europe .............................................................. 444 2.1. Patent Acquisition ...................................................................................... 444 2.1.1. Patentable subject matter—inventions and discoveries ........... 445 2.1.2. Patentable subject matter—morality ........................................... 449 2.1.3. Patentable subject matter—medical methods............................ 454 2.1.4. Novelty—first and second medical use ...................................... 455 2.1.5. Novelty—selection invention ....................................................... 457 2.1.6. Novelty—testing exemption ......................................................... 459 2.1.7. Inventive step (nonobviousness) —expectation of success .... 461 2.1.8. Inventive step (nonobviousness) —secondary indicia— commercial success ............................................................................ 463 2.1.9. Industrial applicability (utility) ...................................................... 465 2.1.10. Skilled person ................................................................................ 469 2.1.11. Enabling disclosure ...................................................................... 476 2.2. Patent Scope ................................................................................................ 480 2.2.1. Scope of product claims—absolute versus limited scope ........ 480 2.2.2. Clarity of claims .............................................................................. 482 2.2.3. Breadth of claims ............................................................................ 485 2.3. Patent Rights and Limitations .................................................................. 489 2.3.1. Research exemption ....................................................................... 489 2.3.2. Compulsory licensing ..................................................................... 492 2.3.3. Patent term....................................................................................... 495 3. Conclusions .................................................................................................................. 497 3.1. European Policy Levers in Biotechnology ............................................. 497 3.1.1. Policy levers ..................................................................................... 497 3.1.2. Macro versus micro policy levers ................................................. 501 3.1.3. Statutory versus jurisprudential policy levers ............................. 504 3.1.4. Pre-grant versus post-grant policy levers .................................... 507 Assembled Issue 2 11-7-11 (Do Not Delete) 11/7/2011 10:16 AM 2011] POLICY LEVERS TAILORING PATENT LAW 437 3.1.5. European versus national policy levers ....................................... 508 3.1.6. Private interest versus public interest levers .............................. 508 3.2. Comparing European and U.S. Policy Levers ....................................... 509 4. Critical Assessment: “The Patent Crisis” Revisited .............................................. 510 4.1. Tailoring ....................................................................................................... 510 4.2. Courts ........................................................................................................... 512 5. Final Remarks .............................................................................................................. 515 5.1. Future Research .......................................................................................... 515 5.2. Concluding Thoughts ................................................................................ 517 1. INTRODUCTION 1.1. “The Patent Crisis” In their book The Patent Crisis and How the Courts Can Solve It,1 Burk and Lemley start from the observation that today’s technology world is characterized by differing innovation and patent patterns among sectors. Innovation is not all of a piece, and innovation patterns and research-and-development expenditures may differ from industry to industry in a variety of ways.2 Those differences extend to the way in which industry players experience the patent system and result in patent patterns which may vary from industry to industry as well. Firms’ propensity to obtain patents differs across sectors3 and some industries rely more heavily on patents than others. Patent prosecution processes diverge according to industry and getting a patent is quicker, cheaper, and easier in some industries than in others.4 Distribution of value itself varies systematically by industry.5 Even the effective scope of granted patents is different by industry, and there is not always a one-to-one correspondence between a single patent and a single product.6 And the construction of a patent portfolio is also industry specific.7 1. DAN L. BURK & MARK A. LEMLEY, THE PATENT CRISIS AND HOW THE COURTS CAN SOLVE IT (2009). 2.Id. at 5, 38, 39–41 (“The evidence is overwhelming that different industries have different needs and experience the patent system differently.”). Even though “we have one set of legal rules . the industries affected by those rules operate in very different patent systems.” Id. at 65. 3.Id. at 49, 178 (with reference to Erik Brouwer & Alfred Kleinknecht, Innovative Output and a Firm’s Propensity to Patent: An Exploration of CIS Micro Data, 28 RES. POL. 615 (1999); OTTO J. BACHMANN ET AL., PATENTS AND THE CORPORATION 195 (2d ed. 1959); F.M. Scherer et al., Patents and the Corporation, Harvard Bus. Sch. 195 (1959). 4. BURK & LEMLEY, supra note 1, at 41 (citing John R. Allison & Mark A. Lemley, Who’s Patenting What? An Empirical Exploration of Patent Prosecution, 53 VAND. L. REV. 2099, 2114 (2000)). 5.Id. at 52 (with reference to Mark Schankerman, How Valuable is Patent Protection? Estimates by Technology Field, 29 RAND J. ECON. 77, 79 (1998)).
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