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Wednesday, January 15, 2014

Self-Replicating Technologies and the Challenge for the Patent and Antitrust Laws

Daryl Lim, The John Marshall Law School analyzes Self-Replicating Technologies and the Challenge for the Patent and Antitrust Laws.

ABSTRACT: Few patented inventions challenge the traditional boundaries of the patent and antitrust laws like those that are capable of multiplying as they are used. These self-replicating technologies are embedded in our food, fortify our vaccines, and form the computer code upon which the information age is based. These inventions create an inherent conflict between patentees and their customers. The conflict arises because every customer could become competitors as the product replicates, potentially making every first sale the patentee’s last. They also challenge how we think about fundamental issues of ownership as well as innovation and market competition, and make it necessary to identify what downstream uses are or should be permissible.

This struggle culminated recently in the Supreme Court case of Bowman v. Monsanto. There, the Court had to determine what rights a farmer had over the genetically modified seeds he had bought. At the core of Bowman v. Monsanto was the scope of patent exhaustion, a judge-made doctrine designed to end the patent owner’s control over downstream commerce once its patented goods or methods were sold. Monsanto had also been accused of monopolizing the market, leading to upward spiraling prices and a drought of seed varieties. The Article examines the patent and antitrust issues arising in agro-biotechnology, and analyzes their impact on other self-replicating technologies. In looking at patent issues, this Article first explains how courts can apply a technology-neutral three-step test to distinguish between permissible “uses” and impermissible “making” of patented articles. Second, it explores the benefits of five alternatives to patent infringement as a means of appropriating returns to innovation, and explains why their limitations vindicate the Court’s conclusion in Bowman v. Monsanto. Third, it discusses thorny matters left unresolved: inadvertent and incidental infringement, as well as the “conditional sale” doctrine. In looking at the antitrust issues, the Article first explains why the controversial essential facilities doctrine could prove to be a useful tool for courts to ensure adequate access to standard essential patents over traits like Roundup Ready. Second, it explains why Monsanto’s win over Bowman may hold unexpected promise of a better future for farmers as its customers. Third, it argues that legislation similar to Paragraph IV challenges under the Hatch-Waxman Act can serve to incentivize greater competition in agro-biotechnology and other fields of technology.

http://lawprofessors.typepad.com/antitrustprof_blog/2014/01/self-replicating-technologies-and-the-challenge-for-the-patent-and-antitrust-laws.html

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