It might appear that intellectual property protection has a positive impact on a country’s economic development. According to Professor François Dessemontet, “there is a strong correlation between the rate of patents sought by enterprise and the general level of economic developments.” However, it would be arrogant to presume that a one-size-fits-all approach toward intellectual property protection would work for developing countries. In fact, as noted by Sir Hugh Laddie, “[f]or too long intellectual property rights have been regarded as food for the rich countries and poison for poor countries . . . Poor countries may find them useful provided they are accommodated to suit local palates. The . . . appropriate diet for each developing country needs to be decided on the basis of what is best for its development, and that the international community and governments in all countries should take decisions with that in mind.” This essay explores whether intellectual property rights serve as a hurdle for the transfer of technology to developing countries, or whether there are other, subtler influences at work. This essay also explores whether other mechanisms can be employed to encourage the transfer of technology to developing countries.
A novel, nonobvious Discovery Tool and its use can be the subject of valid patent claims, but patent claims that reach through to cover as-of-yet-undiscovered drug products generally fail to meet the written description and enablement requirements of 35 U.S.C. § 112. Notwithstanding the Supreme Court’s broad reading of the scope of the statutory exemption to infringement—under 35 U.S.C. § 271(e)(1)—in Merck v. Integra, and the occasionally misapplied common law experimental use exception, valid claims to Discovery Tools and their use are enforceable against unauthorized users. This article analyzes the legality of one form of compensation occasionally sought by Discovery Tool inventors as consideration for the grant of a license to the use of their patented tools: the “reach-through” royalty paid on the sale of a product that is identified by a licensee using a patented Discovery Tool, but is not itself covered by the inventor’s tool patent. In addition, this article reviews judicial remedies in patent infringement cases that reach through the infringed patent to burden products and activities of the infringer that are not covered by the infringed patent—remedies that are analogous to a negotiated contractual reach-through royalty obligation. The article concludes that reach-through royalty arrangements between willing licensors and licensees are permissible under U.S. Supreme Court precedent, despite potential patent misuse challenges, and represent a viable method by which the free market for patented Discovery Tools may adequately reward the tool inventor.
Case note concerning PROMETHEUS LABORATORIES V. MAYO COLLABORATIVE SERVICES
Update Sept. 4, 2011: The Supreme Court has granted cert to the appeal of this decison (for a second time) and thus this comment may not accurately reflect the state of the law.