An overview of the appropriability mechanisms used in plant biotechnology industry

This paper aims to discuss the main appropriability mechanisms used by biotech firms to avoid imitation and appropriate the economic benefits from crop innovations. To this end, we analyze the strategic links between the technological development of genetically modified organisms (GMO) and the ownership rights over plant transformation technologies. We also discuss a key case study - the legal battle between Monsanto and Syngenta by the control of the GMO crops derived from the GA21 gene. Our findings show that a system of blocking patents has been built basically through strategies relating to intellectual property mechanisms. As result, Monsanto's efforts to sue competitors for patent infringement have proved to be a successful barrier to entry in plant biotechnology industry.

Patents for Sharing

Spurred by the Internet, emerging technologies have changed the way commercial firms innovate and have made it possible for individuals to play an important role in that innovation. Producers in the Information Communication Technologies (ICT), and other sectors dealing with complex technologies with many separately patentable components, find it increasingly difficult to make products without infringing on patents held by others. Numerous overlapping patents often cover such products. Producers have developed a new way to use patents: as inclusive rights for sharing their technologies with others through cross-licensing and other private ordering arrangements in order to ensure the freedom to operate and innovate. Individual innovators, and open source software (“OSS”) programmers in particular, have also developed a new use of copyrights: using them to share their technologies through OSS licenses. Producers of complex technologies use patents for sharing their technologies with OSS programmers and for protecting themselves from patent assertion. In light of these recent uses, this article proposes a new utilitarian theory for patents: patents as the incentive to share, with the reward of increasing the freedom to operate and innovate. It argues that both the ex ante and ex post incentive to invent theories are outdated because they fail to take into account the patent owners’ lack of control over their products in complex technology sectors. This article urges Congress to reevaluate U.S. patent rights in light of this new patent use. It reviews U.S. patents as property rights from the comparative law perspective and proposes the revitalization of the inclusive side of U.S. patents by introducing a compulsory license for blocking patents. It also proposes that the exclusive side of patent rights should be limited to private and experimental use exceptions to ensure the freedom to operate and innovate by sharing.

Current intellectual property issues in nanotechnology

To the extent that the USPTO issues a proliferation of broad and potentially overlapping nanotechnology patents, the development of a nanotechnology patent thicket could impede the licensing process required for further innovation. If the contractor refuses the federal agency’s request, the agency can grant a license to the applicant itself if “the contractor or assignee has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in such field of use” or if “action is necessary to meet requirements for public use specified by Federal regulations and such requirements are not reasonably satisfied by the contractor, assignee, or licensees.” Theoretically, the march-in right demonstrates the power of the government to prevent the nonuse of patents in the context of patent hoarding or blocking patents used to stifle competition. These university-based nanotechnology research centers are in a prime position to secure bids for significant shares of the new funding from the Nanotechnology Act; ultimately, they should have an augmented government license defense in order to carry out incremental and innovative research effectively without becoming unduly encumbered by a nanotechnology patent thicket.

THE ESCAPE-INFRINGEMENT EFFECT OF BLOCKING PATENTS ON INNOVATION AND ECONOMIC GROWTH

This study develops a Schumpeterian growth model to analyze the effects of different patent instruments on innovation. We first analyze patent breadth, which captures the traditional positive effect of patent rights on innovation. Then, we consider a profit-division rule between entrants and incumbents. Given the division of profit, increasing the share of profit assigned to incumbents reduces entrants' incentives for innovation. This aspect of blocking patents captures the recently proposed negative effect of patent rights on innovation. Finally, blocking patents generate a nonmonotonic effect on innovation when the step size of innovation is endogenous because of a novel escape-infringement effect. Calibrating the model to aggregate data, we find that a marginal increase in the blocking effect of patent protection is likely to enhance economic growth.