A relatively simple example explains this con-
cept. A manufacturer has obtained a patent for and
wishes to sell a chair with two armrests and a wheel
under each of its four legs. However, he cannot
make such a chair because there is already a patent
to another which very broadly claims ‘a chair hav-
ing a flat sitting surface mounted atop four legs’.
Although the earlier patent does not claim the
armrests and wheels, it will ‘dominate’ the later
patent, assuming the later chair has a flat sitting
surface atop four legs. The first patentee has the
right to exclude others, including the later patentee,
from making a four-legged chair with a flat sitting
surface,but, after the second patent issues, cannot
itself make a chair with two armrests which has a
wheel under each of its four legs, as this is the
subject of the later patent. How can this matter be
resolved, without costly court battles?
(1) The manufacturer can attempt to negotiate a
‘freedom to operate’ license from the first
patentee, which will protect it from patent
infringement suit by the patentee.
(2) If armrests and wheels produce a much more
marketable product, it might be in both paten-
tees’ interests to cross-license their respective
patents, as neither patentee could sell the more
desirable chair without an accommodation
with the other.
(3) The manufacturer could also buy chairs from
the first patentee and then modify them by
adding armrests and wheels, as the sale
exhausts the patentee’s patent rights in the
goods sold. However, this may be economic-
ally unfeasible if the purchasing and modifica-
tion costs cannot be passed on to the consumer
by charging a higher price.
The situation can quickly become more compli-
cated if we now add a third party who also has a
patent, this one on a chair with two armrests but
no wheels. The license negotiated, as described
above between the first and second patentees,
does not protect either patentee from suit by this
third patentee, who is not a party to the license.
Note that if this third patentee attempts to sell a
green, two-armed, wheeled, four-legged chair with
a flat sitting surface, both the first and second
patentees could sue for patent infringement under
their respective patents, even though neither of
them mentioned ‘green’. In some technologies,
especially those involving biotechnological inven-
tions, multiple-party cross licenses and ‘freedom to
operate’ licenses are common.48.4 Patentable subject matter
Patentable subject matter covers avery broad range
of theterms ‘things’ and ‘processes’.These include
compoundsper se(i.e. new chemical entities),
compositions (e.g. a chemical entity and a pharma-
ceutically acceptable carrier or two chemical enti-
ties), life forms (e.g. a purified, newly discovered
microorganism, a constructed microorganism or a
region of DNA), devices (e.g. a surgical appliance),
chemical syntheses, screening assays and methods
of using a compound or composition. Shorter than
to define what is the patentable is to define what is
legally unpatentable. Generally, unpatentable sub-
ject matter includes products of nature (i.e. natu-
rally occurring articles), scientific principles and
some inventions related to atomic energy and
nuclear material. The prohibitions against patents
on methods of human treatment and compounds
per sehave been discussed above. In the ‘process
countries’ (see above) patents can be obtained on a
process to make a compound, but not on the che-
mical entity itself. Inherently, this is a more limited
patent right, as (a) it may be very difficult to prove
that a particular process is being infringed, and
(b) alternative manufacturing processes may be
developed which do not infringe.48.5 Criteria for obtaining
a patentThere are three criteria for obtaining a patent. The
claimed invention must be (1) novel, (2) unob-
vious, and (3) useful or utile. There are somewhat
subtle differences in what these concepts mean in
different countries, which can lead to different622 CH48 PATENTS