Academic journal article Santa Clara High Technology Law Journal

Evaluating the Use of Patent Pools for Biotechnology: A Refutation to the USPTO White Paper concerning Biotechnology Patent Pools

Academic journal article Santa Clara High Technology Law Journal

Evaluating the Use of Patent Pools for Biotechnology: A Refutation to the USPTO White Paper concerning Biotechnology Patent Pools

Article excerpt

I. INTRODUCTION

Patent pools have a long and controversial history in the United States. Some laud patent pools as a way to further innovation and development in various industries. (1) Supporters credit them for promoting development in areas where the presence of multiple patents may impede product development and innovation. (2) Some of the larger industries within the United States, such as aircraft and automobile manufacturing owe their beginnings to patent pools. (3) Recently, MPEG compression and DVD technology successfully used patent pools to help overcome their intellectual property holdups. (4) The successful use of patent pools in these high profile products has rekindled interest in patent pools as a way of overcoming patent bottlenecks. (5)

In December 2000, the United States Patent and Trademark Office (USPTO) published a white paper suggesting patent pools as a possible solution to problems within the field of biotechnology. (6) The white paper analyzed bottlenecks and accessibility problems associated with too many companies holding too many genomic patents. (7) The USPTO claimed patent pools would not only alleviate these problems, but also confer additional advantages to pool members. (8)

This Comment disputes the USPTO's proposition that the use of patent pools will benefit the biotechnology sector. Specifically, this paper evaluates the advantages and disadvantages of applying patent pools to genomic intellectual property, arriving at the conclusion that patent pools will not be as beneficial to the biotechnology sector as they were for other industries.

This Comment will further demonstrate the unique nature of the biotechnology industry that makes patent pools inadequate for overcoming intellectual property problems within the field. Patent pools formed in the biotechnology sector face not only traditional disadvantages but also new concerns exclusive to the industry itself. Part II provides background on the biotechnology industry. Part III introduces the current intellectual property related problems facing biotechnology. Part IV of this Comment provides a background of the historical use of patent pools. Part V summarizes the advantages the USPTO believes companies in the biotechnology sector will realize if they use patent pools to solve issues arising from genomic patenting. The remainder of this Comment discusses the proposed advantages that the USPTO claims are inherent to patent pooling and identifies additional problems associated with the application of patent pools that are unique to the biotechnology industry.

II. AN OVERVIEW OF THE BIOTECHNOLOGY INDUSTRY AND GENOMIC INNOVATION

Biotechnology is "the use of the cellular and molecular processes to solve problems or make products." (9) The United States biotechnology industry began in the 1980's but did not rapidly expand until the 1990s. (10) From 1993 to 1999, the United States biotechnology industry grew from $8 billion to $20 billion in annual revenue. (11) Today, there are approximately 100 products on the market derived from biotechnology. (12)

Numerous companies are driving this innovation. Depending on the criteria used, the number of biotechnology companies range from 800 to 1,500 companies within the United States. (13) However, the endless creation of new companies, mergers, acquisitions, and differing ideas about what qualifies as a "biotechnology" company hampers an accurate count. (14)

Arguably, the biotechnology industry, as well as the many arguments about patenting genes, began with Diamond v. Chakrabarty. (15) Traditionally, the "product of nature" theory prevented inventors from patenting natural material. (16) This meant that companies were prevented from patenting such things as animals, DNA, or microbes. However, in the 1980 landmark case of Diamond v. Chakrabarty, the Supreme Court held that human-made, genetically engineered bacteria that broke down crude oil were patentable. …

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