Transcript Part I: Why Use Probes? - Centre for Intellectual Property Policy

Replacing
Assumptions with
Analysis:
Use of Transdisciplinary
Probes
Raleigh, June 2004
Wen Adams
McGill Faculty of Law
Replacing Assumptions with Analysis
Part I: Presentation of the probes
Illustrative examples
Part II: Using the probes to analyze problems
Schmeiser case study
Part I: Why Use Probes?
More comprehensive and effective analysis
For better answers, need to ask better questions
Moving beyond incentives-access paradigm
Identify new relationships
Identify unintended consequences
Moving beyond analysis paralysis
Generate better research questions and discussion points to bridge
the comprehension gap
Part I: Presentation of Probes
Part II: Using the Probes
Assumptions vs. Probes
Assumptions
Address problems by referring to abstract principles
Lack of Context
Innovation is a good thing
Patents encourage innovation
In any conflict where innovation is affected, patent rights must be
protected
Part I: Presentation of Probes
Part II: Using the Probes
Assumptions vs. Probes
Probes
Evaluate problems in context
Solve problems rather than applying principles
Identify relationships
Identify affected interests
Identify implications and unintended/unanticipated consequences
Consider possible (and alternative) solutions
Part I: Presentation of Probes
Part II: Using the Probes
Assumptions vs. Probes
Transdisciplinary Analysis
Simultaneous perspective
Economics, ethics, management, law
Contextual Analysis
Avoid unintended consequences
Recommendations to meet a variety objectives
No universal decrees
Allows for flexible (and yet still predictable) policy alternatives
Part I: Presentation of Probes
Part II: Using the Probes
What are the probes?
1. Distributive justice
5. Sovereignty
2. Innovation management
6. Economic efficiency
3. Knowledge management
7. Risk management
4. Integrity of living things
Part I: Presentation of Probes
Part II: Using the Probes
Distributive Justice
Description
Does a given patent regime provide a just allocation of goods, e.g.,
revenue, access to technology
• Who benefits, by how much, and who bears the costs?
• Are the competing interests appropriately resolved?
Example
TRIPS Agreement
• Did it maintain or create comparative advantage for developed
states?
• Does linkage-bargain diplomacy work for developing states?
Part I: Presentation of Probes
Part II: Using the Probes
Innovation Management
Description
Nexus between patent system and governance of innovation
• How should research be funded – public, private or mixed?
• What is the interaction between patents and financing of not only
R&D but entire supply chains?
Example
Universities and granting agencies rely heavily on patent system to
produce innovation
• Is it working?
• Do patents skew research priorities?
Part I: Presentation of Probes
Part II: Using the Probes
Knowledge Management
Description
How do patents affect the diffusion of information?
Is information transferred between firms? Within states? Between states?
How is information transferred? By licensing, sale, foreign direct
investment?
Example
Licence agreements may alter presumed optimal level of information
diffusion put in place through patent disclosure requirements
Can require licensee to waive rights to statutory exemptions, e.g., research
exemption
Part I: Presentation of Probes
Part II: Using the Probes
Integrity of Living Things
Description
How does patenting affect living organisms?
• Whether species integrity (human and non-human) has inherent
value
• Whether biodiversity can be maintained
Example
Is a genetically modified mouse a mere “composition of matter”?
Does a principled distinction exist between genetic modification of
plants and traditional breeding techniques?
Part I: Presentation of Probes
Part II: Using the Probes
Sovereignty
Description
Are states able to exercise unconstrained decision-making authority
to meet domestic public policy objectives?
• De jure regulation
• De facto economic and political reality
Example
Biotechnology companies claim that patent “havens” will result in
reduced levels of foreign investment, as well as domestic flight
How to explain offshore research and development?
Part I: Presentation of Probes
Part II: Using the Probes
Economic Efficiency
Description
Patent protection a necessary incentive because intangible assets
are non-exclusive and non-rival
But does it make sense for patent system to operate as “one size fits
all”?
Example
Domestic
• Incentive effect not constant across industries
International
• Optimal level of protection varies depending upon level of
development
Part I: Presentation of Probes
Part II: Using the Probes
Risk Management
Description
Management of the various forms of environmental risk and potential
harms to human health and biodiversity
• Precautionary principle
• Principle of future generations
Example
Organic certification of canola in Saskatchewan may no longer be
possible
Part I: Presentation of Probes
Part II: Using the Probes
Part II: Using the Probes to Analyze Problems
Case Study: Schmeiser
Factual background
Supreme Court of Canada decision
• Assumes patent protection a necessary incentive
Reconsideration of issues using probes
• Distributive justice
• Economic efficiency
Part I: Presentation of Probes
Part II: Using the Probes
Schmeiser: Factual Background
Monsanto has patent rights to gene and cells containing the
gene
No patent right to whole plant possible in Canada
Contamination event (factual uncertainty)
Schmeiser identifies genetically modified canola plants on his land
Saves seeds and replants crop, but makes no use of herbicideresistance
No contract in place between Monsanto and Schmeiser
Can intellectual property rights be enforced to exclude Schmeiser
from engaging in these activities?
Part I: Presentation of Probes
Part II: Using the Probes
Supreme Court of Canada Decision
Monsanto wins on the law…
Claims are valid
Case decided on interpretation of “use”, not scope of claims
Use includes furthering a business interest or obtaining a commercial
benefit
But gains nothing on the facts…
Monsanto made decision to seek accounting of profits
No profits derived from use of invention because Schmeiser did not
make use of herbicide properties
Part I: Presentation of Probes
Part II: Using the Probes
Implications for Patent Law
Indirect patent protection for plants
What has happened to “use”?
“Use” interpreted in abstract terms to mean commercial return, not
physical activity
Limited scope for innocent infringer
Traditional rule that intention irrelevant makes no sense in
circumstances of contamination and self-propagation
Part I: Presentation of Probes
Part II: Using the Probes
Reconsidering the Result: Distributive Justice
Competing property rights
Common situation when intellectual property rights are embedded in
objects of personal property
• Monsanto’s intellectual property rights in gene and cells
containing the gene
• Schmeiser’s common law personal property rights in plants
containing the cells (and genes)
Part I: Presentation of Probes
Part II: Using the Probes
Reconsidering the Result: Distributive Justice
Where to establish the “ownership divide”?
Allocates the aggregated revenue stream of intellectual and personal
property rights
No intellectual property rights in plants
Returns from patents should not include revenue from exploiting
personal property
Does decision raise possibility that revenue may be misallocated
between holders of intellectual and personal property rights?
Part I: Presentation of Probes
Part II: Using the Probes
Reconsidering the Result: Economic Efficiency
It was never about the canola…
Cannot examine economic efficiency of patent in isolation of the
licence agreements
Economic return included sale of off-patent herbicide Round-Up
• Effectively extended patent term of Round Up
Economic return also included licensing rather than sale of seeds
• Effectively displaces patent exhaustion
Overcompensation?
Part I: Presentation of Probes
Part II: Using the Probes
Do the probes provide value-added analysis?
Assumption-based analysis
Broad patent protection encourages innovation in agricultural
biotechnology
• Upholding Monsanto’s patent rights economically efficient
• Benefits society by encouraging socially useful innovation
Probes-based evaluation
Supreme Court of Canada may have overcompensated Monsanto
• Need to take into account the effect of the licence agreements
No analysis beyond incentives-access paradigm
• Did not address distributive implications of competing property
rights
Part I: Presentation of Probes
Part II: Using the Probes