LIABILITY RULES AS AN ALTERNATIVE TO PATENTS JEROME H. REICHMAN BUNYAN S. WOMBLE PROFESSOR OF LAW DUKE UNIVERSITY SCHOOL OF LAW DURHAM, NC WIPO LLM PROGRAM.

LIABILITY RULES AS AN ALTERNATIVE TO PATENTS

JEROME H. REICHMAN BUNYAN S. WOMBLE PROFESSOR OF LAW

DUKE UNIVERSITY SCHOOL OF LAWDURHAM, NC

WIPO LLM PROGRAMTURIN, ITALY

October 12-13, 2011

2Source: Jerome H. Reichman, How Trade Secrecy Law Generates a Natural Semicommons of Innovative Know How ,

in THE LAW AND THEORY OF TRADE SECRECY (R.C. Dreyfuss & K.J. Strandburg, eds. Elgar, 2011) at 185, 191.

Basic Scientific and Technical Information

Expansion of exclusive rights in lieu of actual or legal secrecy

ZONE 1

Truly non-obvious inventions

ZONE 2

Routine innovation(includes small-scale ‘inventions’)

ZONE 3

Hybrid regimes(utility models, etc.)

Applications of know-how to industry

COMMONS

SEMICOMMONSTraditional trade secrets law

EXCLUSIVERIGHTS

EXCLUSIVERIGHTS

COMPENSATORY LIABILITY REGIME

COMPENSATORY LIABILITY REGIME

Industrial Property Literary / Artistic Property

Paris Convention (1883)

Berne Convention (1886)

1. Patents2. Industrial Designs3. Utility Models4. Trade Marks5. Unfair Competition

1. Literary and Artistic Property as such [Author’s Rights]

2. Rights related to Author’s Rights (Producers of Sound Recordings, Performers, Broadcasts)

Rome Convention (1961)

Intellectual Property

3

Tulip Breeder A Tulip Breeder B Other Breeders (C)

Breeds a green tulip for Breeds a green, white, Other breeders cash in

the first time ever, but & red tulip, using A's on this success and

there is no consumer technology; he gains extend the technology

market commercial success to new color

combinations

4

6

7

8

9

WHAT ARE THE DIFFERENCES BETWEEN PATENT SYSTEMS?

A PANORAMIC VIEW

JEROME H. REICHMAN BUNYAN S. WOMBLE PROFESSOR OF LAW

DUKE UNIVERSITY SCHOOL OF LAWDURHAM, NC

Workshop on Innovation and Patent Harmonization: Does One Size Fit All?BOSTON UNIVERSITY SCHOOL OF LAW

September 30 – October 1, 2011

J. H. Reichman and Rochelle Cooper Dreyfuss, Harmonization Without Consensus:

Critical Reflections on Drafting a Substantive Patent Law Treaty,

57 DUKE L.J. 85 (2007).

10

EUROPEAN PATENT OFFICE (EPO), SCENARIOS FOR THE FUTURE—

HOW MIGHT INTELLECTUAL PROPERTY REGIMES EVOLVE BY 2025?

WHAT GLOBAL LEGITIMACY MIGHT SUCH REGIMES HAVE? (2007).

The EPO outlined four different scenarios that could emerge in response to different interest groups seeking to influence domestic and international policymaking forums.

1. The tightening of worldwide patent standards under an international treaty such as the SPLT, a position championed by many multinational corporations.

2. The evolution of a variegated system in which developing countries—especially emerging economies—gradually reshape the existing patent system to suit their own comparative advantages.

3. A shift towards second-tier regimes, possibly sounding in liability rules rather than exclusive rights, which would specifically address the problems posed by cumulative and sequential innovation.

4. A re-elaboration of the basic patent paradigm that would give much greater weight to the provision of public goods and “access to knowledge” in general, at the expense of private incentives to innovate.

11

“Although the EPO takes no position on which of these scenarios it favors, its publication demonstrates that

policymakers responsible for the future evolution of the patent system will be constrained to take account of

the divergent interests underlying each of these remarkably prescient scenarios.”

Reichman & Dreyfuss (2007)

12

13

There is no consensus even in developed countries about:

• Patents on substances found in nature (including gene patents);

• Second uses of known pharmaceutical substances (at least 4 different options);

• The basic components of the novelty test;

• The level of non-obviousness,

• The requisite degree of “industrial application.”

For details (and teaching materials) see:

UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD), USING INTELLECTUAL PROPERTY RIGHTS TO STIMULATE PHARMACEUTICAL PRODUCTION IN DEVELOPING COUNTRIES – A REFERENCE GUIDE (United Nations, 2011) by Christoph Spenneman and Jerome H. Reichman, available open access at http://www.unctad.org/ddip

14

“as new approaches to new technologies emerge in different jurisdictions, there is a need to gather empirical evidence to determine which, if any of these still-experimental solutions are preferable

over time”

Reichman & Dreyfuss (2007)

15

“The following are not inventions within the meaning of this Act: The mere discovery of a new form of a known substance which does not result in the enhancement of known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.”“Explanation: For the purposes of this clause, salts, esters, ethers, polymorph, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combination and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.” India’s Patent Law, section 3d (2005) [UNCTAD, p. 80]

16

Jerome H. Reichman, Rethinking the Role of Clinical Trial Data in International Intellectual Property Law: The Case for a Public Goods Approach, 13 MARQUETTE INTELL. PROP. REV. 1 (2009) (Nies Memorial Lecture).

These and other “flexibilities under TRIPS allow developing countries to promote their own development agendas, under a policy of ‘counter-harmonization.’”

17

Amy Kapczynski, Harmonization and Its Discontents: A Case Study of TRIPS Implementation in India’s Pharmaceutical Sector, 97 CAL. L. REV. (2009).

Jerome H. Reichman, Intellectual Property in the Twenty First Century: Will the Developing Countries Lead or Follow?, 46 HOUSTON L. REV. 1155 (2009) (Sante Fe Conference)

A free-standing instrument, such as the SPLT, would shrink the remaining flexibilities in the TRIPS Agreement with no side payments and no concessions to the catch-up strategies of developing countries at different stages of technological advancement. Reichman & Dreyfuss, (2007)

18Source: Jerome H. Reichman, How Trade Secrecy Law Generates a Natural Semicommons of Innovative Know How , in THE LAW AND THEORY OF TRADE SECRECY (R.C. Dreyfuss & K.J. Strandburg, eds. Elgar, 2011) at 185, 191.

Basic Scientific and Technical Information

Expansion of exclusive rights in lieu of actual or legal secrecy

ZONE 1

Truly non-obvious inventions

ZONE 2

Routine innovation(includes small-scale ‘inventions’)

ZONE 3

Hybrid regimes(utility models, etc.)

Applications of know-how to industry

COMMONS

SEMICOMMONSTraditional trade secrets law

EXCLUSIVERIGHTS

EXCLUSIVERIGHTS

COMPENSATORY LIABILITY REGIME

COMPENSATORY LIABILITY REGIME

19

See, for example

J.H. Reichman, Of Green Tulips and Legal Kudzu: Repackaging Rights in Subpatentable Innovation, 53 VAND. L. REV. 1743 (2000). Pamela Samuelson, et al., A Manifesto Concerning the Legal Protection of Computer Programs, 94 COLUMB. L. REV. 2308 (1994).

20

See, JAMES BESSEN & MICHAEL J. MEURER, PATENT FAILURE—HOW JUDGES, BUREAUCRATS AND LAWYERS PUT INNOVATORS AT RISK (Princeton U. Press, 2008)

(Aggregate costs of litigation exceed aggregate gains from patent protections in IT)

21

Anthony So et al., Is Bayh-Dole Good for Developing Countries? Lessons from the U.S. Experience, 6 PLOS BIOLOGY 2078 (2008)

22

Arti K. Rai et al, Pathways Across the Valley of Death: Novel Intellectual Property Strategies for Accelerated Drug Discovery, 8 YALE J. HEALTH POLICY LAW AND ETHICS 1 (2008)

23

JEROME H. REICHMAN, TOM DEDEURWAERDERE AND PAUL F. UHLIR, GLOBAL INTELLECTUAL PROPERTY STRATEGIES FOR THE MICROBIAL RESEARCH COMMONS—GOVERNING DIGITALLY INTEGRATED GENETIC RESOURCES, DATA AND LITERATURe (Cambridge U. Press, forthcoming 2012(3?))

24

Jerome H. Reichman & Ruth L. Okediji, When Copyright Law and Science Collide: Empowering Digitally Integrated Research Methods on a Global Scale, __U. MINN. L. REV.___ (forthcoming 2012)