Utility

1
Utility

• Sept. 1, 2009
• Prof Merges

2
Patent Originalism

• Very timely in light of District of Columbia v.
  Heller, 128 S.Ct. 2783 (2008), the recent Supreme
  Court case on the 2nd Amendment

3
Newman Dissent

• Is patent law keeping up with new technologies?
• The knowledge economy and patents . . .

4
Mayer dissent

• The majority's proposed machine-or-transformatio
  n test for patentability will do little to stem
  the growth of patents on non-technological
  methods and ideas. Quite simply, in the context
  of business method patent applications, the
  majority's proposed standard can be too easily
  circumvented. p. 14

5
Rader dissent

• Chooses to say what could have been said in a
  single sentence Because Bilski claims merely an
  abstract idea, this court affirms the Board's
  rejection.
• Period!

6
Post-Bilski Trends to Watch

• Supreme Court developments continuing
  supervision of patent system or back to the
  sidelines?
• Software patents

7

• Merges, Software and Patent Scope A Report from
  the Middle Innings, 85 Tex. L. Rev. 1528 (2007)

8
Dissent Judge Linn

• Art and processes might be viewed, in
  rough terms, as the exercise of technological
  skill, manufactures and compositions of
  matter as the products of that skill, and
  machines as the tools through which that
  skill is exercised.

9
Shades of Learned Hand?

• Pragmatic (consequentialist) interpretation vs.
  scholastic textualism

10
Judge Hands Decision
11
Hands decision in Mulford

• While it is of course possible logically to call
  this a purification of the principle, it became
  for every practical purpose a new thing
  commercially and therapeutically.
• -- p. 108

12
Hands Pragmatism

• Practical differences
• Vs.
• Scholastic distinctions
• -- p. 108

13
In re Bilski

• Method of hedging risk in energy markets
• En banc oral argument May, 2008
• Awaiting en banc decision

14
Utility Section 101

• Whoever invents and new AND USEFUL machine,
  manufacture, . . .

15
Main Trouble Areas

• No known utility (perpetual motion machines)
• Newman v. Quigg, 877 F.2d 1575 11 USPQ2d 1340
  (Fed. Cir. 1989) (claims to a perpetual motion
  machine ruled inoperable)
• Malicious utility
• a "useful" invention is one "which may be applied
  to a beneficial use in society, in
  contradistinction to an invention injurious to
  the morals, health, or good order of society, or
  frivolous and insignificant"

16
Justice Story View

• Appendix, Note on the Patent Laws, 3 Wheat. 13,
  24. See also Justice Story's decisions on circuit
  in Lowell v. Lewis, 15 Fed. Cas. 1018 (No. 8568)
  (C. C. D. Mass.), and Bedford v. Hunt, 3 Fed Cas.
  37 (No. 1217) (C. C. D. Mass.).

17
Brenner v Manson

• This is not to say that we mean to disparage the
  importance of contributions to the fund of
  scientific information short of the invention of
  something "useful," or that we are blind to the
  prospect that what now seems without "use" may
  tomorrow command the grateful attention of the
  public.

18
Brenner, contd

• But a patent is not a hunting license. It is not
  a reward for the search, but compensation for its
  successful conclusion. "A patent system must be
  related to the world of commerce rather than to
  the realm of philosophy. "

19
In re Brana 34 U.S.P.Q.2d 1436 C.A.Fed.
Decided March 30, 1995
20
Brana, contd
21
R1-R4 Markush groups
N Markush group
22
Brana contd

• FDA approval, however, is not a prerequisite for
  finding a compound useful within the meaning of
  the patent laws. Usefulness in patent law, and in
  particular in the context of pharmaceutical
  inventions, necessarily includes the expectation
  of further research and development.. Were we to
  require Phase II testing in order to prove
  utility, the associated costs would prevent many
  companies from obtaining patent protection on
  promising new inventions, thereby eliminating an
  incentive to pursue, through research and
  development, potential cures in many crucial
  areas such as the treatment of cancer.
• -- 34 U.S.P.Q.2d 1436, 1443

23
Working Model or Prototype in vivo effectiveness
Promising Experimental Results Brenner v. Manson
Promising Clinical Results, e.g., in vitro In
re Brana
Project Initiation Pure Concept Stage
24
The Oklahoma Land Rush A Good Use of Resources?
25
(No Transcript)
26
(No Transcript)
27
Mining Claim Systems Require-ments and Timing
Issues
28
Some quick economics

• Terry L. Anderson Peter J. Hill, The Race for
  Property Rights, 33 J.L. Econ. 177 (1990)
• David D. Haddock, First Possession Versus Optimal
  Timing Limiting the Dissipation of Economic
  Value, 64 Wash. U. L.Q. 775 (1986).
• Dean Lueck, The Rule of First Possession and the
  Design of the Law, 38 J.L. Econ. 393 (1995)

29
Terry L. Anderson Montana State Hoover
Institution
David Haddock, Northwestern Law School
30
(No Transcript)
31
Ex Parte Fischer

• Claim 1
• Substantially purified echoes of Parke-Davis
• Selected from the group consisting of . . .
• What is this claim form?

32
Markush Group

• An article of clothing, selected from the group
  consisting of
• Shirts
• Shoes
• Pants

• A chemical entity selected from the group
  consisting of
• Carbon
• COOH
• CH(6)

33
Expressed Sequence Tags
Most DNA Unknown Function
EST Short Tag
The good stuff DNA that codes for a protein
34
Multiple Biotechnology Patents SNP/EST Example
A Owns SNP_1 (Or EST_1)
B Owns SNP_2/EST_2
C Owns SNP_3/EST_3
35
Fischer

• What utilities are claimed? P. 3
• determining a relationship between a
  polymorphism and a plant trait
• isolating a genetic region . . . Or mapping
• determining protein levels . . .

36
Fischer - holding

• P 22
• Immediate utility is to conduct further
  experiments
• Too attenuated under Brenner and Brana

37
Expressed Sequence Tag Patents policy issues

• Bad Idea! Eisenberg Merges opinion letter, 1995
• Patent laws utility requirement bars these
  patents
• Why? Rent Seeking Dominates incentive motive
  Transaction Costs a Major Issue

38
Transaction Costs
B
C
A
Firm E
End Product
39
Transaction Costs II
B
A
C
End Product
End Product
End Product