another example of the difficulties which arise
when technology races ahead of society’s capacity
to even understand that there is a potential new
problem. Although plant patents and other protec-
tions for agricultural inventions (all of which were
known to be living organisms) had been granted for
many years, patent offices had simultaneously
refused to grant patents for inventions of living,
non-plant organisms. This all began to change with
the 1980 US Supreme Court decision in the Chak-
rabarty case, where the invention was a modified
microorganism. The sole issue before the Court
was whether an invention could be denied patent
protection solely because the claimed material was
alive. The Court said ‘No’, and the biotech industry
exploded onto the scene.
No one today complains about patenting
microbes. However, the intensity of the debate is
understandable when the inventions involve
human DNA, as these are seen by some as endan-
gering our humanity. Today, the major issues relate
to patenting transgenic mammals, pieces of the
human genome and human clones. Tomorrow, the
great issue of the day may be patenting cyborgs;
that is, organisms comprising synthetic and human
components. Undoubtedly, some of these issues
will be resolved soon and some will be hotly
debated for a long time; at least, until a hotter
issue emerges.
48.10 The value of patents
Patents are clearly of great economic value to the
patentee because the can be used to block com-
petition, because they can be licensed out, thus
producing a revenue stream even if the patentee
has no interest in actually selling the patented
product, or because they can be bargaining chips
in cross-licensingarrangements, justto name afew.
For a start-up company, the mere granting of a
patent can add tens of millions of dollars to the
value of the enterprise, somewhat independently of
what the patent actually covers. This converts into
more-ready access to additional funding from ven-
ture capitalists and the price of the company’s stock
when a public offering is made.
Patents may be of value for only a few years in
rapidly developing technological areas; that is,
until the next ‘big thing’ makes the patented tech-
nology obsolete. Patents are also arguably of lesser
value than a well-recognized trademark, which
does not expire in 20 years.
Pharmaceutical patents in particular have come
under attack in recent years, largely due to the
perceived high costs of medicines. Thus, in the
United States, there is pressure to allow the impor-
tation of foreign-purchased drugs, even though a
US patent exists which would normally be
expected to bar such importation. In the EC, there
is no barrier to the free movement of goods within
the EC. So, if a drug is not covered by a patent in a
first EC country, it can be purchased there (pre-
sumably at a cheaper price) and moved to a second
EC country, even though there is a patent in the
second country that covers the drug. The ability of
the patentee to bar these importations at the border
has been eliminated.
Another diminution in the value of patents in the
United States is the result of the Hatch–Waxman
Act. This law provides a significant economic
incentive to generics companies to attack the valid-
ity of US patents. (See Chapter 29 for a more
complete discussion on this subject.)630 CH48 PATENTS