Patents

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Patents are a form of intellectual property (IP) in United States law that precludes other parties from using an invention without the inventor's permission. Although the United States patent originated on April 10, 1790, under the first patent act which read, "an act to promote the progress of useful arts," the concept of patents has been traced back to the Venetian Patent Statue of 1474. The patent law system is designed to encourage innovation by incentivizing technological advances with exclusive rights in exchange for public disclosure. Many industries, such as the pharmaceutical industry, rely on patent law as a major source of competitive advantage. All United States patents are granted through the United States Patent and Trademark Office (USPTO). Patents bring about a number of ethical issues including patent trolling, unethical pricing, and privacy implications.

An example of a U.S. patent

History

Some scholars argue the first legal items that had a role similar to patents were the monopolistic royal grants developed by Queen Elizabeth in 1550 with the intent of advancing her economic and industrial policies in England. Other scholars believe that patents originate from the idea that creativity should be a natural right, which comes from fifteenth-century Italian city-state artisan guilds. Although both of these theories have different views about the origins of patents, the economic incentive to produce original work became the dominant reason behind the American patent system.

Legal

There are three requirements for patentability that must be met in order to form a legal patent: the invention must be novel, useful, and non-obvious. In addition to the general requirements, the patent must also be accompanied by a list of claims that define the patent. The claims are technical requirements and outline what features are legally protected by the patent.

If goods are used or sold by another party that violates the claims set forth under a granted patent without the permission of the patent holder, the violating party is infringing the patent, creating grounds for a lawsuit. Patent infringement is a matter of civil law and therefore requires action by the plaintiff to be brought to court. Patents differ by country and therefore patented inventions may be exploitable outside of the controlling government's jurisdiction.

When a patent issue is brought forth, the defendant may utilize the following defenses:

• Non-infringement
• Invalidating the patent
• Patent abuse
• Prior use or First Sale Doctrine

The case then proceeds as a standard case in the court of law until either a settlement is reached or the court reaches a decision on the case.

The following defenses can be described as follows:

Non-Infringement

Non-infringement means that if someone uses an item that you has patented for their own good or tries to sell or misuse the patented item without the patent owners permission, then this can be used as a means of legal defense for the patent owner.

Invalidating the patent

It is possible to invalidate a patent by providing files, items, or patents that were published before the patent in the hopes of undermining the patent itself.

Patent Abuse

Patent abuse can occur when the owner of the patent themselves misuses their patent rights and for example, could try to expand the span and or scope of a patent. Another way that a patent owner could misuse a patent was if they forced users to pay a sort of royalty or tax on their product even though those rights are not outlined by the patent itself.

Prior use or First Sale Doctrine

Prior use is using a patent or trying to get a patent on something that has already been patented in the past by another person. The First Sale Doctrine is something that defines how much a patent owner can control what is being done with their patent after its first sale.

Public Disclosure

Filing a patent application helps inventors prevent others in the public from exploiting their work under the precondition that the inventors disclose their creation publicly in an appropriate time. In most countries, inventors normally are advised not to disclose their work before having the patent if they want their intellectual work to be protected by the patent law. In the United States people who unintentionally disclose their work before filing a patent application have a one year grace period to do so. The unintended disclosures include the On-Sale Bar, the Public-Use Bar, and Printed Publications.

Having a patent also means publicly disclosing the invention under the patent. This means that if a company files for a patent, while their invention or technology is protected for the amount of time under the patent, normally 20 years, it also becomes common knowledge. In recent years we have seen companies decide not to patent their technology because they do not want to give the industry their knowledge, even if it is protected. One of the biggest examples of this is SpaceX. SpaceX is so confident that their technology is so far ahead that they chose not to patent it because they didn't want to make their rocket designs known.

Types of Patents

The three main types of patents are utility patents, design patents, and plant patents. A short-term provisional patent can also be granted during the processing time of each of the above patents. Provisional patents protect the intellectual property of the owner during the patent application process provided the owner can prove they were both in possession of the patent and shown successful use of the invention in a less formal document. Provisional patent protection lasts one year.

Utility Patents

The utility patent is the purest form of the traditional patent outlined in its legal definition. The utility patent exists as a comprehensive technical document of claims that acts both as the public disclosure and scope of the patent. Details such as how to use the invention and its mechanisms are included. The utility patent applies to a wide range of inventions including machines, processes, manufactured goods, and compositions of matter (e.g. pharmaceuticals). Utility patents last 20 years.

Design Patents

Design patents make ornamental design on a useful item into intellectual property and seek to eliminate very close imitation of a novel product. Design patent documents are largely composed of drawings of the submitted design and contain few words. A patent infringement on design patents are not necessarily an exact copy but must only be substantially similar. Design patents last 14 years.

Plant Patents

Plant patents are, as the name denotes, a patent on a plant species created through non-sexual means. Plant patents protect plants created through conventional horticulture and generally do not cover genetically modified organisms. A plant patent lasts 20 years.

Patent Law Ethical Controversies

Although patent law is designed to promote innovation and competition, ethical dilemmas may also arise from its use. The main ethical concerns around the concept of patent law can be defined as ways to abuse the rights granted by patents resulting in social detriment. This can be done through what is known as patent trolling and monopolistic patent pricing.

Patent Trolling

Formally known as patent-assertion entities, patent trolls are companies that accumulate large amounts of patents with no intention to produce or distribute on said patents. Instead, patent trolls seek to bring lawsuits on companies developing products infringing on their patent for profit in the case of a successful suit. Patent trolls may utilize predatory legal practices against smaller or even larger firms to seek a settlement. Inefficiencies by the USPTO are also exploited as, despite the long and comprehensive process of filing for a patent, many broad and not strictly "useful" or "non-obvious" patents are produced. Patent trolls do not seek to invest heavily in R&D efforts to develop their portfolio of patents and opt to buy up patents from smaller companies.

A recent example of a high-profile patent troll case is Apple v VirnetX, where the jury ruled in favor of known patent-assertion firm VirnetX over a patent on secure communications that Apple applications Facetime and iMessage infringed upon. The case concluded after 8 years on April 10th, 2018 and Apple paid $502.6 million to the plaintiff.

The ethical dilemma clearly arises where, in the realm of patent trolls, patents cease to provide public benefit for innovation and rather impedes progress. Solutions have been implemented, such as the Supreme Court ruling that patent trolls cannot choose where infringement suits are filed. Some jurisdictions, most notably Marshall, Texas, has been known to significantly favor patent holders and is a haven to patent troll suits. Despite the ruling, patent trolling continues to be a practice in the legal system.

Unethical Pricing

Several high-profile cases in the recent past have raised concerns about the monopolistic control patents provide, particularly in the pharmaceutical industry. The pharmaceutical industry presents a delicate balance as patents are necessary to offset the very considerable R&D costs and incentivize pharmaceutical firms to continue developing new drugs. However, the nature of the pharmaceutical industry denotes that their product may have potentially life-altering effects for consumers, and what is the market efficient price may not be an ethical one.

Two cases that have had widespread coverage are Turing Pharmaceuticals price hike of proprietary drug Darapim (Pyrimethamine) from $17.50 a tablet to $750. The drug is used in HIV/AIDS treatment and was used to treat Malaria in the past (although this method is no longer recommended). CEO Martin Shkreli has since been sentenced to 7 years in prison, but the sentencing is for a recent indictment on fraud and unrelated to the Darapim price hike, a legal act. Similarly, the producer of EpiPen, Mylan, raised the price of a two-pack of their product from $100 to $600. The potentially life-saving effects of EpiPen raised ethical concerns. CEO Heather Bresch justified the decision referencing copay programs to increase access and arguing the price was fiscally necessary. EpiPen also responded to the backlash by working on a $300 generic alternative.

Drug patents produced by country

Despite the issues raised by extreme drug pricing through ownership of patents, the United States' generous drug patent policy compared to patent laws internationally has resulted in the US consistently producing the most drug patents annually. The ethical dilemma hinges upon considerations of public good both short-term and long-term as well as acceptable concessions made to reach the "greater good". Drug pricing legislation continues to be a topic of contention in government and hotly debated both within and outside the industry.

Economic impact

Positive Impact

Patents are said to improve the level of innovation in the economy, by monopolizing the market for the technology, therefore incentivizing companies to make a profit by improving their level of innovation and making further developments. Patents also help improve recognition of the company, solidifying its position in the industry and prove critical in securing further funding by helping their credibility in the eyes potential investors. Further, patents have the effect of stimulating the growth of the national industry since patent holding companies can attract foreign investment or explore exporting their products. Profits that are generated can then be reinvested into further development, creating a cycle of growth. In cases where patenting companies disclose information about their technology to the public domain, other companies are able to build upon the patented technologies and innovate ways to improve it, leading to an increase in overall innovation and growth. This encourages the growth of the patented technology without its duplication or loss of intellectual property.

Negative Impact

Patents have been criticized as being a negative influence on innovation, and have been pointed out as a key factor holding the potential to slow down an economy. Due to the restricting nature of patents, they are criticized for blocking follow-on innovations, and limiting market potential. The draining effect that the legal issues revolving around patents on a company's time and resources also slows down industry growth, since companies often enter legal battles against each other, which may take years to resolve. There has been extensive research on the stifling nature of patents. A study on the effect of failed patents on citations revealed that in certain industries, citations went up by 50% in computers, communications, electronics, but was close to non-existent in the pharmaceuticals industry.

The positive impacts are made very clear as to how patents can be beneficial to our society, but they also put constraints on the competitors of those who hold the patents. Patents can also stymie intellectual growth and prevent others from learning as well. This causes harm to competitors, readers, and to the self.

Privacy Implications

When intellectual property is framed as an extension of the self, privacy rights become a legitimate ethical concern. To provide more support for intellectual property as self, an individual's identity includes their own informational entity as well. Patent trolling infringes upon the direct concept of privacy, which is "the right...to personal immunity from unknown, undesired, or unintentional changes to one’s own identity as an informational entity". By suppressing unique inventions with broad patents in the court of law, patent trolls infringe on the victim's privacy.

Patent monopolization, too, can be seen as a violation of privacy rights. Privacy rights are "...a matter of construction of one’s own identity", as well as the ability to experiment with one's own life (short of committing crimes) and recover from said experimentation without the impediment of another entity. That is to say, privacy rights are an extension of an individual's rights to life and liberty. With unfair drug pricing brought on by patent monopolies, an individual loses control of their own privacy and identity.