Appeal No. 2004-1040 Page 25
Application No. 09/770,643
The practical effect of Appellants’ utility standard, however, would be that making
a microarray with 1000 genes represented on it would require investigating each of the
DNA sequences (and subsequences) on the gene chip to ensure that it was not the
subject of someone else’s patent. For each of the DNAs that was the subject of
someone else’s patent claim, a license would have to be negotiated – potentially
thousands of such negotiations for the finished product. These transaction costs would
have to be incurred for each new product that an aspiring gene chip manufacturer
wished to market. The industry gridlock likely to result has been termed a “tragedy of
the anticommons”:
By conferring monopolies in discoveries, patents necessarily increase
prices and restrict use—a cost society pays to motivate invention and
disclosure. The tragedy of the anticommons refers to the more complex
obstacles that arise when a user needs access to multiple patented inputs
to create a single useful product. Each upstream patent allows its owner
to set up another tollbooth on the road to product development, adding to
the cost and slowing the pace of downstream biomedical innovation.
Heller, page 698.7
The Supreme Court has warned against allowing too many “tollbooths” on
the road to innovation:
Patents . . . are meant to encourage invention by rewarding the inventor
with the right, limited to a term of years fixed by the patent, to exclude
others from the use of his invention. . . . But in rewarding useful invention,
the “rights and welfare of the community must be fairly dealt with and
effectually guarded.” Kendall v. Winsor, 21 How. 322, 329 (1859). . . . To
begin with, a genuine “invention” or “discovery” must be demonstrated
“lest in the constant demand for new appliances the heavy hand of tribute
be laid on each slight technological advance in an art.”
Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 230, 140 USPQ 524, 527 (1964).
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