Patent Nonuse and the Role of Public Interest as a Deterrent to Technology Suppression Essay

Patents are contracts between the society and the inventor to encourage development in the field of science and technology. It helps the society by enabling them to utilize this technology, and the inventor by protecting his rights and rewarding him appropriately for this intellectual efforts and innovations. Once a patent is given by the patent office, the inventor has to work the invention by himself or through somebody else by means of an assignment or a license. The patent office does not look at the potential commercial value of the invention whilst giving the patent. The invention should have a specific use and should fulfill what it is meant to do. Many inventions given patents have turned to be commercial failures. However, there are several instances in which neither the patentee has worked the invention by himself, nor has he allowed others interested to do so. This is a very serious situation, because it goes against the very intention of granting the patent. The patent system grants patents only to those inventors who are willing to reveal their invention with others, so that it can benefit society. Some patentees may not work their invention due to several reasons, one of which may be to wrongfully hide or suppress technology from the public. One of the first such cases was the Continental Paper Bag Co. v. Eastern Paper Bag Co. case of 1908. In this case, the patentee had invented a machine that could make a folded paper bag with a rectangular bottom. However, he had not made his invention available to the public, thus preventing others from working the invention. At that time, this invention was a breakthrough, and many people felt bad, because the very intention of giving a patent was not fulfilled. No concrete rules regarding nonuse of patents and compulsory licenses were existent at that time, and everything was left at the mercy of the patent holder. Lower courts also found that the patentee was unreasonable. They in fact tried to draw a line between ‘reasonable nonuse policy’ (inventor unable to use his invention because or some understandable problems) and ‘unreasonable nonuse policy’ (purposefully suppressing technology). However, as no concrete rules existed at that time, the higher court had to give its decision in favor of the rightful owner of the invention. Many breakthrough technologies exist which are being currently suppressed from the public. A plastic that is strong, long-lasting, and can be utilized to make houses that last forever, was granted patents, but not accessible to the public by the owner. New rubber for tires is invented which does not blow up. If this technology could be utilized currently, the lives of many people who die in road accidents could be saved. A new material has been invented for use in toothpastes, which protects the teeth from developing cavities. These technologies are being suppressed due to the anticompetitive intentions of their owners. Some patentees may not use or license their technology so that others may be forced to infringe up on their patents. Lawsuits for infringements could be filed, which could give them earning in millions. An instance of this is a case between Minolta and Honeywell’s, in which Minolta had to pay $127 million to Honeywell for infringing their auto-focus camera patent, although the owners were not using their patent. The patent office should come up with strict rules such that all the patentees have to give an annual report of how their patent is being worked commercially, and in case it is not being worked, the reasons for the same. In case the inventor does not respond, the patent should be revoked. Instances of patent nonuse can be used as evidence in the court, against individuals who indulge in anticompetitive practices. Such practices are strictly considered unlawful under the US Antitrust Laws. The Sherman Act was one of the first such as to protect against unfair trade practices. According to this act, any individual monopolizing or attempting to monopolize, or combines with other people or with other nations to monopolize any trade business in the US, shall be held guilty of an offense under the act. Patent is a monopoly granted to the owner, but they are also contracts between the owner and the public, to permit the later to access the technology. Patent laws are likely to be misused. The exclusionary right (to prevent others from using or making the invention without the license of the owner) is limited and should be more meaningful. The patent system does not give absolute monopoly to the owners. In the case Pfizer V. Government of India [434 US 308 (1978)], the US permitted foreign nations to sue under the Section 4 of the Clayton Act. The Government of India was asking Pfizer to grant licenses for certain broad spectrum antibiotics. However, the company refused to give reasonable licenses. Several antitrust violations such as price-fixing, fraud, market-division, etc were being imposed by the Indian Government against Pfizer and group. The respondents also said that petitioners were trying to limit and monopolize the production, sale and distribution of their patents. The respondents also said that these practices had destroyed businesses. The Company said that the Indian Government could not bring this case forward, as they belonged to another nation. However, the court went on to say that foreign nations could also claim under antitrust laws. The court said that the case was similar to having a citizen having his rights under the antitrust laws being violated. In the case Remington Products V. North American Philips corporation [107 FRD 642, 1985], Remington alleged that the company Philips, a leading Dutch MNC, was indulging in anticompetitive behavior by not disclosing information needed to work the discovery. The defendant claimed that certain clauses in a Dutch statue did not permit disclosure. However, the US court granted the case in favor of Remington saying that the defendant wrongfully withheld information regarding the discovery. The plaintiff had previously approached the defendant to provide information regarding the discovery. However, the defendant refused to give this information needed saying that the information was irrelevant. In the Chevron Research Company’s patent [1970; RPC, 580], the court said that the patentee has to disclose full and relevant information regarding the patent. In the Image Technical Services V. Eastman Kodak Co. [504 U. S. 51 (1992)] provides an association between the antitrust laws and the intellectual property rights regime. Kodak Company had a patent for a photographic device. The case was alleged by companies that serviced Kodak’s products. In this case, a distinction is being made between ‘attempting monopolization’ and ‘attaining monopolizing by exploiting’. The court had to study the market situation to determine if the company was trying to control prices or destroy competition. Kodak in fact monopolized manufacture of components of its photographic equipment and even monopolized servicing of its equipment. The court had said that both patents and copyrights did not come under antitrust laws. An inventor had the right to license or refuse license of his invention. However, a patent owner may be held for developing practices against the antitrust laws (that could destroy competition). The extent to which antitrust laws could be applied to patent laws had to be determined by studying the market situation. The plaintiffs had gathered enough proof that Kodak were trying to monopolize their market situation by limiting the availability of its components to the service companies Nowadays, exclusive license holders may also try to misuse their rights by monopolizing their licensed to make or use the patent. This can be demonstrated in the Medtronic Sofamor Danek, Inc. v. Michelson case. Dr. Michelson had invented a new spinal treatment device and had given a license to Medtronic which manufactured medical equipment. However, the company did not promote his treatment device, and hence the doctor had to grant licenses to other companies that would compete with the original license holder. The company filed a case in the court claiming that the patent holder breached clauses of the contract. However, the Court felt that the company had adopted certain anticompetitive principles that did not promote the patent. Patent holders are trying to maximize their monopoly, by indulging in anticompetitive acts. Often there is a clash between patent laws and antitrust laws. Patent laws provide the holder with rights to eliminate competition, whereas antitrust laws enable protection of healthy business competition practices. A clear border line has to be drawn between these two conflicting legal regimes. In the case Illinois Tools Works V. Independent Ink, the question of the manufacturer having a market power over a patented product or process could be presumed whilst granting the patent, was being asked. A patent holder may hold so much of powers in the market such that he/she may dominate the scene. A patent holder will usually violate antirust laws if he or she feels that they are in a situation to dominate the market. In this case, Illinois printers invented a printing device and had prohibited the customers from using non-patented ink. The defendant felt that such terms were against the true spirits of competition, and were under the impression that Illinois tool works were trying to dominate the market situation. It may be difficult in such a case to determine the party that would carry the burden of proof. The patent holder had tried to extend his patent. In this manner, they had created both, primary and secondary market rivals. The primary rivals included other manufacturers of printers, and the secondary rivals included other manufacturers of printer inks. The court gave its decision in favor of Independent Ink, citing that patents could not be extended to non-patentable areas. A patent had only specific boundaries, and crossing such boundaries constituted infringement. In another case, Schering-Plough held a patent for a drug. A company that manufactured a generic version of the same drug felt that the original company’s patent was invalid. They wanted to file for a patent opposition, but Schering-Plough decided to pay the generic drug manufacturers to withdraw the case and also stay out of the market for some period. Federal Trade Commission filed a case before the Supreme Court, saying that Schering-Plough was trying to destroy all competition in the market by wrongfully preserving its invalid monopoly. The Court felt that the agreement between Schering-Plough and the generic manufacturers was invalid and was executed to destroy competition in the market. Patent laws should make it easier to obtain a compulsory license in case the patentee wrongfully suppresses the invetion from the public. A compulsory license should be given to anybody in case:- The patentee is unable to meet the reasonable requirements of the public with relation to his patented process or product. †¢ The patentee does not make the invention available to the public at an affordable cost. †¢ The invention is not being worked in the jurisdiction of the patent office. †¢ Special considerations should be given to inventions that relate to public health and nutrition, and emergency situations. Compulsory license should be a sanction (for the patentee) and a remedy (for the public); in case the patentee indulges in anticompetitive practices. The concept of compulsory licenses developed following the African AIDS crisis situation. The continent was in a crisis situation with the HIV/AIDS pandemic. A few companies such as Glaxo, Merck, etc held a patent for an antiretroviral drug which could be life-saving for people suffering from HIV/AIDS. However, these companies had indulged in several anticompetitive practices. The cost of treating each AIDS patients in Africa was exceedingly high (US$ 10,000 per patient per year). Hence, the drugs were inaccessible for many poor patients who belonged to underdeveloped nations. Cipla, an Indian pharmaceutical company volunteered to supply the drug at a fraction of the overall costs the other companies were offering (US $ 350 per year per patient). Some of the African Nations had to modify its trade laws so that parallel imports and compulsory licenses could exist. However, the original companies that held the patents for antiviral drugs began to sue for infringement. These companies had to later withdraw their infringement cases, as there was a worldwide agitation against the anti-public health policies adopted by the patent holders. Later, at the WTO conference in Doha, a comprehensive agreement to protect public health issues was adopted to prevent unhealthy practices by the patent holders (through compulsory licenses). Some people feel that the patent system can create an obstruction in the development of science and technology, as instances of nonuse often arise. Once a patent is granted, it may even prevent others from inventing around a particular invention or inventive concept. This will seriously hinder the developments in that particular field. Inventors, who tend to sit on their inventions by refusing access to the public, should be henceforth refused patents.