The decision of the U.S. Supreme Court in Association for Molecular Pathology v. Myriad Genetics, Inc.1 was a landmark case addressing the subject matter provisions in Section 101 of the United States’ Patent Act.2 Represented by public-interest litigators from the American Civil Liberties Union (ACLU) and the Public Patent Foundation, a coalition of scientists, cancer patients, and genetic counselors successfully challenged and invalidated patents covering genetic DNA sequences. The Supreme Court decision drastically revised the understanding of patent-eligible subject matter, with sweeping implications for women’s health, for medical research, and for commercial biotechnology.

Introduction

The chapters in this volume on pharmaceutical development and on the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPRGFA) are oriented toward the use of liability rules to promote innovation. Each describes an attempt to re-align the incentives of innovators by structuring a set of contractual options that will overcome the barriers to investment. In response to the formidable barriers to development of viable pharmaceuticals from private libraries of receptors and ligands, Rai et al. propose the creation of a private molecular “semi-commons” of pooled molecules from which promising drug targets could be tested, and for which a contributor would be paid if a viable product resulted. In a similar vein, Henson-Apollonio reports on the structure of the ITPRGFA, which allows use of genetic resources with the guarantee of a royalty if a contributor's variety is used.

A common feature of these systems is a type of conscription mechanism that permits a participant in the system to use intellectual property (IP) without a direct negotiation with the IP owner. Users of an asset are required to pay for their use of the asset; they cannot be refused use of that asset but they control the decision whether to take the asset or not. In other words, owners of the asset have a right to payment, but not a right to exclude.