1 KSR Intern. Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007).

2 Kastenmeier, Robert W. & Remington, Michael J., The Semiconductor Chip Protection Act of 1984: A Swamp or Firm Ground?, 70 Minn. L. Rev. 417, 467 (1985).Google Scholar

3 See U.S. CONST. art. I, § 8, cl. 8. (“To promote the Progress of Science [Copyright] and useful Arts [Patents], by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”); see also Graham v. John Deere Co., 383 U.S. 1, 5-6 (1966) (citing the IP Clause and outlining the patent right, which protects useful, novel, and non-obvious inventions, as one that is limited to the promotion of the useful arts); Lutz, Karl B., Patents and Science: A Clarification of the Patent Clause of the U.S. Constitution, 18 Geo. Wash. L. Rev. 50, 51 (1949)Google Scholar, reprinted in PAUL GOLDSTEIN & R. ANTHONY REESE, PATENT, TRADEMARK AND RELATED STATE DOCTRINES (6th ed. 2010) (outlining that the drafters’ language would equate Science as “knowledge” or the work of authors (copyrightable subject matter) and Useful Arts as inventions (patentable subject matter)).

4 See Graham, 383 U.S. at 6 (discussing the patent right and noting that Congress should not attempt to enlarge this monopoly without considering the “innovation advancement or social benefit gained”); see also Pfaff v. Welles, 525 U.S. 55, 64 (1998) (“[T]he patent system represents a carefully crafted bargain that encourages both the creation and the public disclosure of new and useful advances in technology in return for an exclusive monopoly for a limited time.”); Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146 (1989) (citing Graham, 383 U.S. at 6) (“Congress may not create patent monopolies of unlimited duration nor may it authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available.”).

5 See Bonito Boats, 489 U.S. at 146 (“From their inception, the federal patent laws have embodied a careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very lifeblood of a competitive economy … .”); see also Yu, Allen K., Within Subject Matter Eligibility—A Disease and a Cure, 84 S. Cal. L. Rev. 387, 387 (2011)Google Scholar (positing that that the inclusion of section 101's subject matter requirement in the Patent Act reflects Congress's understanding that it is a “unique constitutional requirement to ensure that the patenting of eligible subject matter promotes the useful arts”). At least one author has criticized courts and scholars for taking the limited “incentive or monopoly” view of “Progress” under the IP Clause. Chon, Margaret, Postmodern “Progress”: Reconsidering the Copyright and Patent Power, 43 Depaul L. Rev. 97, 107 (1993)Google Scholar. Chon argues for a more “postmodern” view of progress and posits that the IP Clause's underlying mandate to “promote progress of Science and the useful Arts” focuses on the “accumulation of knowledge.” Thus, the IP Clause is not limited to the incentive/monopoly paradigm, and Congress under the IP Clause has been made the trustee of this “common of knowledge.” Id. at 102-04. As such, the postmodern view requires Congress to evaluate Progress in a non-linear fashion and to globally consider “differences in access to information and to the consequences of knowledge distribution” before propertizing knowledge. Id. at 125..

6 Federal Copyright Act of 1976 § 302(a), 17 U.S.C. § 302(a) (2006). Some, however, have argued that the current term of copyright exceeds the constitutional mandate of “limited times.” E.g., Eldred v. Ashcroft, 537 U.S. 186, 193 (2003).

7 17 U.S.C. § 106 (2006).

8 E.g., 17 U.S.C. §§ 107-122 (2006). The range of limitations begins with “fair use” and includes compulsory licensing schemes such as the section 115 “mechanical license for covering musical works” and statutory licenses for both cable and satellite transmissions. 17 U.S.C. §§ 115, 119-122 (2006).

9 Currently the Copyright Act contains over fifteen limitations, the largest being section 107's “fair use” defense. 17 U.S.C. § 107.

10 See 35 U.S.C. §§ 1-376 (2006). The Patent Act also provides fourteen years of exclusive rights for novel and ornamental industrial designs. See id. § 171. The Patent Act does, however, include the relatively narrow experimental use exemption, which allows for access to patented inventions “solely for uses reasonably related to the development and submission of information under a Federal Law which regulates the manufacture, use, or sale of drugs … .” Id. § 271(e)(1); see also Merck KGaA v. Integra LifeSciences I, Ltd., 545 U.S. 193, 202-04 (2005) (broadly interpreting the section 271(e)(1) exemption to include use of patented compounds in all pre-clinical studies of patentable compounds regulated by the Food & Drug Administration (FDA) and not limiting application to pre-clinical data pertaining to drug safety or for actual submission to the FDA). There is also an even more narrow common law experimental use defense, which is limited to “actions performed for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.” See John M.J. Madey v. Duke Univ., 307 F.3d 1351, 1362 (Fed. Cir. 2002) (quoting Embrex, Inc. v. Serv. Eng’g Corp., 216 F.3d 1343, 1349 (Fed. Cir. 2001)).

11 See 35 U.S.C. § 271(a) (establishing rights of a patent holder); 35 U.S.C. § 154(a)(2) (2006) (establishing the twenty-year patent term).

12 35 U.S.C. § 101 (2006).

13 See Diamond v. Chakrabarty, 447 U.S. 303, 303 (1980) (“[L]aws of nature, physical phenomena, and abstract ideas are not patentable.”); Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948) (stating that the “laws of nature” are “free to all men and reserved exclusively to none”).

14 See 35 U.S.C. § 112.

15 See, e.g., Sony Corp. of Am. v. Universal Studios, Inc., 464 U.S. 417, 429 (1984) (“[P]atents are intended to motivate the creative activity of authors and inventors by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired.”); Diamond, 447 U.S. at 307; see also Chon, supra note 5, at 107 (arguing that the Supreme Court has misinterpreted the IP Clause and has perhaps incorrectly made the more limiting incentive or monopoly test into a constitutional requirement).

16 See, e.g., Gervais, Daniel, The Regulation of Inchoate Technologies, 47 Houston L. Rev. 665, 669 (2010)Google Scholar (“The dominant feature of inchoate technologies … is their ability to evolve in unpredictable ways and to spawn new chains of technological developments.”).

17 See, e.g., Dinwoodie, Graeme B. & Dreyfuss, Rochelle C., Patenting Science: Protecting the Domain of Accessible Knowledge, in The Future Of The Public Domain: Identifying The Commons In Information Law 192, 193 (Lucie Guibault & P. Bernt Hugenholtz eds., 2006)Google Scholar (describing upstream patents as “patents that protect fundamental principles of knowledge”); see also Heller, Michael A. & Eisenberg, Rebecca S., Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 Sci. 698, 699 (1998)Google ScholarPubMed (suggesting that proliferation of biomedical intellectual property rights could paradoxically decrease downstream product development). For an interesting article evaluating potential problems with upstream or “basic building block” patenting of nanotechnology and the potential for downstream licensing problems, see Lemley, Mark A., Patenting Nanotechnology, 58 Stan. L. Rev. 601 (2005).Google ScholarPubMed

18 “BRCA1” stands for breast cancer susceptibility gene 1, “BRCA2” stands for breast cancer susceptibility gene 2, and together, they are called “BRCA1/2.” See BRCA1 and BRCA2: Cancer Risk and Genetic Testing, NAT’L CANCER INST., http://www.cancer.gov/cancertopics/factsheet/Risk/BRCA#r5 (last updated May 29, 2009) [hereinafter BRCA Factsheet]. The BRCA1/2 genes were originally discovered by scientists at the University of Washington, led by Dr. Mary-Claire King. Dr. King documented that mutations on the BRCA1/2 genes were linked to an increased risk of breast and/or ovarian cancer. Id. More recent research outlines that “harmful BRCA 1 mutations may also increase a woman's risk of developing cervical, uterine, or pancreatic cancer and harmful BRCA 2 mutations may additionally increase the risk of pancreatic cancer, stomach cancer, gall bladder and bile duct cancer, and melanoma.” Id.; see also Thompson, Deborah & Easton, Douglas F., Cancer Incidence in BRCA1 Mutation Carriers, 18 J. Nat’L. Cancer Inst. 1358, 1361-63 (2002).Google Scholar

19 See BRCA Factsheet, supra note 18; see also SEER Cancer Statistics Review 1975-2005, NAT’L CANCER INST., http://seer.cancer.gov/csr/1975_2005/index.html (last updated Apr. 20, 2009) (documenting that a woman who has inherited the BRCA1 or BRCA2 mutation is about five times more likely to develop breast cancer than a woman without this mutation).

20 See, e.g., John Conley, Dan Vorhaus & Robert Cook-Deegan, How Will Myriad Respond to the Next Generation of BRCA Testing?, GENOMICS L. REP. (Mar. 3, 2011), http://www.genomicslawreport.com/index.php/2011/03/01 (noting that basic BRCA testing costs range from $3000-$4000 depending on the payer, and prices are expected to increase because of the Myriad case). The authors further note that “BRCA testing accounts for a striking 88% of the company's nearly $400 million in annual revenues, with only two percent of these sales occurring [outside the] U.S.” Id.

21 Myriad's annual report for the fiscal year ending in 2011 claims revenue of $402.1 million, an increase of eleven percent over the prior fiscal year. MYRIAD GENETICS, INC., 2011 ANNUAL REPORT 2 (2011). According to Myriad, “BRCA analysis, which provides a comprehensive analysis of the BRCA 1 and BRCA 2 genes for assessing a woman's risk of developing hereditary breast and ovarian cancer accounts for most of our revenue.” Id.

22 See, e.g., Patents on Breast Cancer Genes Ruled Invalid In ACLU/PubPat Case, ACLU.ORG, http://www.aclu.org/free-speech-womens-rights/patents-breast-cancer-genes-ruled-invalid-aclupubpatcase (last updated Mar. 29, 2010) (“Myriad's monopoly … makes it impossible for women to access alternate tests or get a second opinion.”); PUBPAT, ACLU AND U.S. Solicitor General in Federal Appeals Court Today Challenging Patents on Human Genes Linked to Breast Cancer: Groups Urge Court To Uphold Ruling That Patents On Genes Are Illegal, PUB. PATIENT FOUND., http://www.pubpat.org/pubpat-aclu-and-u.s.-solicitor-general-in-federal-appeals-court-todaychallenging-patents-on-human-genes-linked-to-breast-cancer.htm (last updated Apr. 4, 2011) (asserting that gene patents “restrict both scientific research and patients’ access to medical care”).

23 See, e.g., BRCA: Genes and Patents, ACLU, http://www.aclu.org/free-speech/brca-genes-andpatents (last updated May 27, 2009) (“The monopoly the USPTO has granted to Myriad on BRCA allows Myriad to charge high rates for its testing—currently over $3,000.”).

24 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 702 F. Supp. 2d 181, 229 (S.D.N.Y. 2010), rev’d 653 F.3d 1329 (Fed. Cir. 2011) (“The preservation of this defining characteristic of DNA in its native and isolated forms mandates the conclusion that the challenged composition claims are directed to unpatentable products of nature.”).

25 A mistaken reference because the first named defendant in the case was the PTO since only the PTO made the initial validity determination and issued the BRCA family of patents. The case is incorrectly referred to as the “Myriad Case” because Myriad Genetics is the exclusive licensee of the BRCA family of patents.

26 See Diamond v. Chakrabarty, 447 U.S. 303, 310 (1980). In Diamond, the Supreme Court allowed patenting of a strain of bacteria that was genetically altered to break down crude oil material. As part of its holding, the Court distinguished that a naturally occurring substance was not patentable under section 101 unless it is biochemically altered to produce a product that is “markedly different” from the product as it occurs in nature. In Molecular Pathology, the biochemical process used to isolate the breast cancer genes did not produce a markedly different product from the naturally occurring genes. Thus, the isolated genes fell outside the subject matter scope of section 101 as unprotectable products of nature.

27 See Petition for a Writ of Certiorari, Ass’n for Molecular Pathology, No. 11-725 (U.S. Dec. 7, 2011).

28 See Petition for Panel Rehearing, Ass’n for Molecular Pathology, 702 F. Supp. 2d 181 (S.D.N.Y. 2010) (No. 2010-1406).

29 See, e.g., Found. for Taxpayer & Consumer Rights v. Patent of Wis. Alumni Research Found., Appeal 2010-001854, 2010 WL 1734377 (B.P.A.I. Apr. 28, 2010) (rejecting claims 1-3 on new grounds under 35 U.S.C. § 103(a)).

30 See, e.g., Regenerative Medicine, DEP't OF HEALTH & HUMAN SERVS. (Aug. 2006), http://stemcells.nih.gov/info/2006report/ (providing information on the use of stem cells in treatment of cancer, diabetes, damaged nervous tissue, etc.).

31 See Hyun, Insoo, The Bioethics of Stem Cell Research and Therapy, 120 J. Clinical Investigation 71, 72 (2010)CrossRefGoogle ScholarPubMed (noting that “opponents of hES cell research heralded the iPS cell revolution as marking the end of embryonic stem cells,” but also pointing out that “most stem cell scientists do not believe that iPS cells … can obviate the need for ongoing hES cell research”). But see Yusa, Kosuke et al., Targeted Gene Correction of α1-Antitrypsin Deficiency in Induced Pluripotent Stem Cells, 478 Nature 391 (2011)CrossRefGoogle ScholarPubMed (recounting proof of principle experiment using genetic correction to create “clinically relevant” iPS cells for autologous therapy methods).

32 See, e.g., Laakmann, Anna B., Restoring the Genetic Commons: A “Common Sense” Approach to Biotechnology in the Wake of Ksr V. Teleflex, 14 Mich. Telecomm. & Tech. L. Rev. 43, 63 (2007)Google Scholar (pointing out that licensing cannot prevent the anticommons problem because negotiation of multiple licenses with upstream patent holders is cost-prohibitive); Heller & Eisenberg, supra note 17, at 698 (suggesting that just as overuse of shared resources can create a “tragedy of the commons,” the underuse of scarce resources due to patent protection can paradoxically impede progress).

33 See Biopharmaceutical Industry Research & Development Tops $51 Billion In 2005, BURRILL & CO. (Mar. 07, 2006), http://tinyurl.com/burrillandco (noting that the “biopharmaceutical” industry is comprised of biotechnology and pharmaceutical research companies). The focus of this Article is specifically on the biotechnology industry.

34 See, e.g., Esteban Burrone, Patents at the Core: The Biotech Business, WORLD INTELL. PROP. ORG. (2006), http://www.wipo.int/sme/en/documents/patents_biotech.htm (“Such companies may … base their revenues on their ability to develop, protect and license innovations.”); see also, Graham, Stuart J.H. et al., High Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley Patent Survey, 24 Berk. Tech. L.J. 1255, 1277-81 (2008)Google Scholar (reporting that ninety-seven percent of venture-capitalist (VC) backed start-up companies in the biotechnology and medical devices sectors hold patents and for non-VC backed start-ups, the number falls to seventy-five percent for biotechnology and seventy-six percent for medical devices). The authors quote a VC partner who states the following: “When you go into life sciences—if it doesn't have a reasonably strong patent, and if you don't have the capability to expand the patent estate covering your technology, you are going to have complicating issues. [As a young company], you need to secure patents, and with the broadest claims and specifications that you can get.” Graham et al., supra, at 1280.

35 See, e.g., Paul Basken, Budget Straits Mean Grant-Success Rate Will Hit All-Time Low, NIH Warns, THE CHRON. (May 11, 2011), http://chronicle.com/article/Budget-Straits-Mean/127472/.

36 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 702 F. Supp. 2d 181, 211 (S.D.N.Y. 2010), rev’d, 653 F.3d 1329 (Fed. Cir. 2011) (asserting that their very existence and innovation turns on having the period of exclusivity granted by patents and by the infusion of venture and risk capital which is conditioned on that patent ownership).

37 The IP Clause is at the heart of the social bargains of both patent and copyright Law. It mandates that in order to promote Progress in Science and the useful Arts, Congress provides exclusive rights for “limited times” to authors and inventors. The Patent Act enforces this mandated bargain by requiring novelty (first inventor), non-obviousness, utility, and an enabling disclosure before granting the limited twenty-year exclusive patent right. In exchange for the patent right, the inventor dedicates her invention to the public domain at the end of the patent term. Thus, both society and the patentee reap benefits from the patent regime. See U.S. CONST. art. I, § 8, cl. 8; see also, Rose, Simone A., Patent “Monopolyphobia”: A Means of Extinguishing the Fountainhead?, 49 Case W. Res. L. Rev. 509 (1999)Google Scholar; Samuelson, Pamela, Creating a New Kind of Intellectual Property: Applying the Lessons of the Chip Law to Computer Programs, 70 Minn. L. Rev. 471, 512 (1985)Google Scholar (“Similarly, the social bargain inherent in patent law also involves an exchange. Society grants the inventor a certain set of exclusive rights, primarily a seventeen-year term of control over the making and distribution of the invention, in return for disclosure of the elements of the invention and the eventual right of the public to practice freely the art the patent teaches.”).

38 U.S. CONST. art. I, § 8, cl. 8.

39 John Perry Barlow deserves credit for the phrase “new wine for a new bottle,” coined in reference to digital technology as new intellectual property subject matter and a misfit for the existing Copyright Law Bargain. See John Perry Barlow, The Economy of Ideas, WIRED, no. 2.03, Mar. 1994.

40 See, e.g., Samuelson, Pamela et al., A Manifesto Concerning the Legal Protection of Computer Programs, 94 Colum. L. Rev. 2308, 2313 (1994)CrossRefGoogle Scholar (noting that sui generis legal protection for computer programs has fallen out of favor).

41 See The Semiconductor Chip Protection Act of 1984, 17 U.S.C. §§ 901-914 (2006); Vessel Hull Design Protection Act, 17 U.S.C. §§ 1301-1332 (2006). Of the two, the debate surrounding semiconductors and the passing of the SCPA most parallels the current isolated bioproduct dispute and provides guidance for determining the parameters of an isolated bioproduct sui generis statute.

42 See Samuelson, supra note 37, at 471 (similarly contrasting semiconductors with computer programs to advocate sui generis protection of computer programs).

43 Like Dr. Chakrabarty's bacterium that were genetically engineered to break down crude oil, human engineered bioproducts such as cDNA or cloned stem cells arguably fall outside the scope of patent-ineligible products of nature because they are “markedly different” from their naturally occurring counterparts. As such, they are patentable so long as they are useful, novel, and nonobvious. See Diamond v. Chakrabarty, 447 U.S. 303 (1980).

44 See, e.g., Chesser, James, Semiconductor Chip Protection: Changing Roles for Copyright and Competition, 71 Va. L. Rev. 249 (1985)CrossRefGoogle Scholar; Rauch, John G., The Realities of Our Times: The Semiconductor Chip Protection Act of 1984 and the Evolution of the Semiconductor Industry, 3 Fordham Intell. Prop. Media & Ent. L.J. 403 (1993)Google Scholar; Risberg, Robert L. Jr.,, Five Years Without Infringement Litigation Under the Semiconductor Chip Protection Act: Unmasking the Spectre of Chip Piracy in an Era of Diverse and Incompatible Process Technologies, 1990 Wis. L. Rev. 241 (1990).Google Scholar

45 See Kastenmeier & Remington, supra note 2, at 442. Interestingly, the authors propose applying their test to any proposed intellectual property legislation, including changes to patent law. The authors state that Congress did not explicitly apply their four-factor test before passing the SCPA, but that their factors were inherent in the legislative discussions. The article goes on to demonstrate how the SCPA clearly satisfies the test. Over time, the test has been identified as the “Kastenmeier- Remington four-part test for enactment of Sui Generis Legislation.” See, e.g., Letter from Pamela Samuelson, Professor of Law, U.C. Berkeley, to Representative Howard Coble, Chairman, Subcommittee on Courts and Intellectual Property (Oct. 23, 1997), available at http://www.arl.org/arldocs/pp/ppcopyright/copyresources/dbaseleg/105congress/psamlet.pdf (arguing that H.R. 2652, Collections of Information Antipiracy Act (proposed database protection legislation) failed to meet the four-part K-R sui generis test).

46 See Kastenmeier & Remington, supra note 2, at 422.

47 Id. at 468 (explaining that the third lesson the SCPA taught us was that the IP Clause correctly gives Congress the authority to propertize intellectual property since this can be achieved “through a democratic decision making process”). They cite the SCPA or “Chip Act” as a perfect illustration of the “wisdom of that historic decision.” Id.

48 See BENJAMIN LEWIN, GENES VIII 1 (2004).

49 See, e.g., Amy Adams, Genetics 101: Overview of Genetics, GENETIC HEALTH (last updated Oct. 19, 2011), http://www.genetichealth.com/G101_Genetics_Demystified.shtml (explaining that each protein performs a particular function. For example, some enzymes aid the digestive process while structural elements provide cellular shape.).

50 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329, 1335 (Fed. Cir. 2011); see also Richard Gold, E. & Carbone, Julia, Myriad Genetics: In the Eye of the Policy Storm, 12 Genetics In Med. S39 (Supp. 2010)CrossRefGoogle Scholar, available at http://theinnovationpartnership.org/data/ieg/documents/cases/TIP_Myriad_Legal.pdf (noting that the Organization for Economic Development identifies the four categories of gene patents as: (1) whole genes or parts of them; (2) proteins that the genes encode as well as their function in organisms; (3) vectors used for the transfers of genes from one organism to another; or (4) genetically modified cells or organisms, processes used for the making of genetically modified products, and the uses of genetic sequences or proteins for genetic tests).

51 Gold & Carbone, supra note 50.

52 See DEP't OF HEALTH & HUMAN SERVS., supra note 30.

53 Id. Due to the moral and ethical concerns raised by using human embryonic stem cells, scientist additionally are learning to genetically reprogram adult stem cells to de-differentiate them into a pluripotent state. These de-differentiated cells, termed induced pluripotent stem cells (or “iPS cells”), allow the growth of compatible cells, tissues, and organs from a patient's own cells. See, e.g., Daley, George Q., Stem Cells: Roadmap to the Clinic, 120 J. Clinical Investigation 8, 9 (2010)CrossRefGoogle ScholarPubMed; Lengner, Christopher J., iPS Cell Technology in Regenerative Medicine, 1192 Annals N.Y. Acad. Sci. 38, 39–40 (2010)CrossRefGoogle ScholarPubMed.

54 See DEP't OF HEALTH & HUMAN SERVS., supra note 30.

55 Id.

56 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329, 1342 (Fed. Cir. 2011) (agreeing with the lower court's observation that information “embodied” in DNA molecules is preserved post-isolation and is essential to utility).

57 See 35 U.S.C. § 101 (2006); see also Diamond v. Chakrabarty, 447 U.S. 303, 310 (1980) (stating that a naturally occurring substance is not patentable under section 101 unless it is biochemically altered to produce a product that is “markedly different” from the product as it occurs in nature).

58 Ass’n for Molecular Pathology, 653 F.3d at 1354. Of course as noted in Part I, excluded from this category of unpatentable subject matter are isolated bioproducts that undergo additional human engineering to alter both their biological function and chemical structure so that they are “markedly different,” such as complementary DNA (cDNA). cDNA is typically created by using reverse transcriptase to create a DNA complement strand mirroring an mRNA molecule, effectively creating a DNA molecule that reflects the parent DNA molecule with all introns spliced out. See id. As long as novel, useful, and non-obvious, this subject matter is patentable like Dr. Charkrabarty's genetically engineered crude-oil-eating bacterium, which was “markedly different” because it had a novel biological capability to break down oil. See Diamond, 447 U.S. at 309-10. Note, however, there is the valid argument that creating cDNA should in all cases be obvious in light of the prior art. See In re Kubin, 561 F.3d 1351 (Fed. Cir. 2009) (disallowing a cDNA sequence patent where the protein was previously identified and the methods for making cDNA in general were known to those skilled in the art).

59 See, e.g., Found. for Taxpayer & Consumer Rights v. Patent of Wis. Alumni Research Found., No. 2010-001854, 2010 WL 1734377 (B.P.A.I. Apr. 8, 2010) (rejecting WARF stem cell patent claims as obvious under section 103); see also In re Fisher, 421 F.3d 1365 (Fed. Cir. 2005) (affirming the PTO's section 101 rejection of claims directed to expressed sequence tags (ESTs) where uses for the claimed ESTs were common to all ESTs, and even though they could be used to identify underlying genes, these genes lacked a known function and did not support a finding of specific utility as required by section 101 of the Patent Act). The Fisher holding is in accord with the PTO's guidelines requiring biotechnological inventions to have a “well established” utility … a utility that is specific, substantial, credible and readily apparent to one having ordinary skill in the art. See Utility Examination Guidelines, 66 Fed. Reg. 1092 (Jan. 5, 2001).

60 Just such a “progress gap” may have been created recently when the Court of Justice of the European Union, the E.U.'s highest court, invalidated stem cell method patents requiring the destruction of human embryos. See Press Release, Court of Justice of the European Union (Oct. 18, 2011), available at http://curia.europa.eu/jcms/upload/docs/application/pdf/2011-10/cp110112en.pdf. A process that involves removal of a stem cell from a human embryo at the blastocyst stage, entailing the destruction of that embryo, cannot be patented. Id.

61 From the 1970s, semiconductors were both innovative and the backbone of the consumer electronics and communications markets. In the ten years following the passing of the SCPA, the semiconductor industry grew from the seventeenth largest industry in the United States to the largest. See ENCYCLOPEDIA OF EMERGING INDUSTRIES (5th ed. 2007) (data from 1987-1996 when semiconductor was one of the fastest growing sectors in the U.S. economy).

62 See ERNST & YOUNG, BEYOND BORDERS: GLOBAL BIOTECHNOLOGY REPORT (2011) (noting that the biotech industry experienced upper double-digit growth during the first half of the new millennium and still enjoyed lower double-digit growth for the second half); see also id. (noting that smaller biotech companies continued to grow at close to high double-digit rates for the last half).

63 See ERNST & YOUNG, Despite Renewed Growth in 2010, Biotech Industry Faces R&D Challenges (June 14, 2011), http://www.ey.com/GL/en/Newsroom/News-releases/Beyondborders_global-biotechnology-report-2011.

64 See Rob Waters, Boom Times for Genomics Startups, BLOOMBERG BUSINESSWEEK (Mar. 17, 2011). Note also that the biotech industry still spends a significant percentage of revenue on research and development, which is “by far the biggest expenditure” in that industry. See ERNST & YOUNG, supra note 62.

65 See Justin Kuepper, Regenerative Medicine Starts to Attract Attention from Investors, BIOTECH STOCK TRADER (July 26, 2011), http://biotechstocktrader.com/regenerative-medicine-starts-to-attractattention-from-investors-266/ (providing cited statistics and noting that “regenerative medicine will cause a paradigm shift in drug discovery and medicine”).

66 See DEP't OF HEALTH & HUMAN SERVS., Use of Genetically Modified Stem Cells in Experimental Gene Therapies, in SCIENTIFIC PROGRESS AND FUTURE RESEARCH DIRECTIONS (2011), http://stemcells.nih.gov/staticresources/info/scireport/PDFs/chapter11.pdf (noting that gene therapy currently is explored by using stem cells, which creates a clear overlap).

67 See RUSSELL KOROBKIN & STEPHEN R. MUNZER, STEM CELL CENTURY: LAW AND POLICY FOR A BREAKTHROUGH TECHNOLOGY (2007) (citing studies concluding that there are more than 4200 issued patents on human genes and more than 39,000 issued patents for DNA sequences); see also Bergman, Karl & Graff, Gregory D., The Global Stem Cell Patent Landscape: Implications for Efficient Technology Transfer and Technology Development, 25 Nature Biotechnology 419, 420 fig.1, 422 (2007)CrossRefGoogle Scholar.

68 Dr. James A. Thompson, a University of Wisconsin professor and research scientist, was the first to isolate and purify “stable” embryonic stem cell lines from primates. See Thompson, James A. et al., Embryonic Stem Cell Lines Derived from Human Blastocysts, 282 Sci. 1145 (1998).CrossRefGoogle Scholar

69 At the backdrop of these controversies is the recently passed Leahy-Smith America Invents Act, which will drastically alter the novelty requirement and other aspects of U.S. patent law. See Pub. L. No. 112-29, 125 Stat. 284 (2011).

70 A blastocyst is a four-day-old fertilized egg. See Jessica Reaves, The Great Debate over Stem Cell Research, TIME (July 11, 2001), http://www.time.com/time/health/article/0,8599,167245,00.html. Note that a fertilized egg is “totipotent” and gives rise to all the different cell types of the body. See DEP't OF HEALTH & HUMAN SERVS., supra note 30.

71 See Papp, Bernadette & Plath, Kathrin, Reprogramming to Pluripotency: Stepwise Resetting of the Epigenetic Landscape, 21 Cell Res. 486 (2011)CrossRefGoogle ScholarPubMed (reviewing the current state of adult cell to iPS technology); see also Monya Baker, Adult Cells Reprogrammed to Pluripotency, Without Tumors, NATURE REPS. STEM CELLS (Dec. 6, 2007), http://www.nature.com/stemcells/2007/0712/071206/full/stemcells.2007.124.html (noting that research concerning conversion of adult terminallydifferentiated cells into pluripotent cells results in “iPS” cells); Vierbuchen, Thomas et al., Direct Conversion of Fibroblasts to Functional Neurons by Defined Factors, 463 Nature 1035 (Feb. 25, 2010)CrossRefGoogle ScholarPubMed (detailing “transdifferentiation” of blood stem cells into functioning neurons). The major hurdle to using iPS cells clinically, however, is their propensity to develop into teratomas and other tumors. See Gutierrez-Aranda, Ivan et al., Human Induced Pluripotent Stem Cells Develop Teratoma More Efficiently and Faster than Human Embryonic Stem Cells Regardless the Site of Injection, 28 Stem Cells 1568 (2010).CrossRefGoogle ScholarPubMed

72 See DEP't OF HEALTH & HUMAN SERVS., supra note 30 (noting embryonic stem cells develop five to fourteen days after the egg is fertilized and are found in the interior of the blastocyst. There are more than 200 cell types in the adult body, and embryonic stem cells can develop into any of these cell types when given the proper stimulation.). In 2007, Dr. Tony Atala of Wake Forest University discovered that the amniotic fluid surrounding the fetus contains a small amount of pluripotent stem cells (approximately one percent) and thus might provide a more “ethical” source of stem cells for future therapies. See De Coppi, Paolo et al., Isolation of Amniotic Stem Cell Lines with Potential for Therapy, 25 Nature Biotechnology 100 (2007).CrossRefGoogle ScholarPubMed

73 The varied ability of cells to differentiate is described in terms of “cell potency.” Totipotent cells have the ability to develop into any tissue type, including extraembryonic tissues such as placenta. Pluripotent cells, such as embryonic stem cells, can develop into any tissue type except extraembryonic. Multipotent cells are derived past the blastocyst stage and can only develop into a limited array of cell types. See Regenerative Medicine Glossary, 4 REGENERATIVE MED. S1 (Supp. 2009).

74 Unfortunately, most experts estimate that we are at least ten years from implementing safe and effective stem cell therapy. See, e.g., Dr. Ann L. Boyd, Presentation at the North Carolina Central University Law School Biotechnology Symposium: Human Stem Cell Research History and Development (2007). Researchers are also working on eliminating the side effects of tumor growth with embryonic stem cell treatments. See, e.g., Tang, Chad et al., An Antibody Against SSEA-5 Glycan on Human Pluripotent Stem Cells Enables Removal of Teratoma-forming Cells, 29 Nature Biotechnology 829 (2011)CrossRefGoogle ScholarPubMed.

75 Although this Article focuses on the current intellectual property conflict, there is a robust scholarly debate concerning the moral utility of embryonic stem cells. The primary argument of prolife advocates is that the moral costs of taking a life (embryo from in vitro fertilization) outweigh any therapeutic benefits from stem cell research. See, e.g., Bagley, Margo A., Ask Questions Later: Morality and Biotechnology in Patent Law, 45 Wm. & Mary L. Rev. 469 (2003)Google ScholarPubMed (exploring and contrasting biotechnology patents and morality in the United States and Europe); King, Nancy M. P. et al., Ethical Issues in Regenerative Medicine, 9 Wake Forest Intell. Prop. L.J. 215 (2009)Google Scholar; see also, e.g., CYNTHIA B. COHEN, RENEWING THE STUFF OF LIFE: STEM CELLS, ETHICS AND PUBLIC POLICY (2007) (including a primer on basic stem cell science, ethical concerns surrounding the use of embryos, and means to address future unanticipated moral issues). Pro-life advocates persuaded President George W. Bush to ban the use of federal funding for the research and development of new embryonic stem cell lines. See Exec. Order No. 13,435, 72 Fed. Reg. 34591 (June 20, 2007). However, President Barack Obama lifted that ban in 2009. See Exec. Order No. 13,505, 74 Fed. Reg. 10667 (Mar. 9, 2009). The struggle continues in federal courts. See, e.g., Sherley v. Sebelius, 644 F.3d 388 (D.C. Cir. 2011) (vacating preliminary injunction against using federal funding for new stem cell lines based on assessment that plaintiffs failed to show likelihood of success on the merits).

76 Dr. Tony Atala's research has produced many patents pertaining to “prosthetic” organs. See, e.g., U.S. Patent No. 6,428,802 (filed Dec. 29, 1999) (issued Aug. 6, 2002) (artificial organ preparation by forming polylayers of different cell populations on a substrate); U.S. Patent No. 6,673,339 (filed Sept. 4, 1997) (issued Jan. 6, 2004) (prosthetic kidney and its use for treating kidney disease); U.S. Patent No. 7,811,332 (filed July 22, 2005) (issued Oct. 12, 2010) (reconstruction method for urological structures utilizing polymeric matrices); see also, e.g., Press Release, Wake Forest Physician Rep. First Human Recipients of Lab.-Grown Organs, Wake Forest Baptist Med. Ctr. (Apr. 3, 2006).

77 Declaration from Dr. Douglas A. Melton, Cabot Professor of the Natural Scis., Harvard Univ., to Gary L. Kunz, USPTO Exam’r (Apr. 18, 2006), available at http://www.consumerwatchdog.org/resources/MeltonDecl.pdf (stating that Dr. Thompson deserves scientific and public recognition for obtaining quality embryos and sufficient funding, but not for any inventive step).

78 See U.S. Patent No. 5,843,780 (filed Jan. 18, 1996) (issued Dec. 1, 1998); U.S. Patent No. 6,200,806 (filed June 26, 1998) (issued Mar. 13, 2001); U.S. Patent No. 7,029,913 (filed Oct. 18, 2001) (issued Apr. 18, 2006). All three patents are titled “Primate embryonic stem cells.”

79 See PUB. PAT. FOUND., http://www.pubpat.org (last visited Oct. 24, 2011).

80 See, e.g., Attachment to Form PTO-1465, Request for Inter Partes Reexamination from Daniel B. Ravicher, Attorney for Found. for Taxpayer & Consumer Rights (Apr. 18, 2006), available at http://www.pubpat.org/warfstemcell.htm.

81 Id.

82 See Found. for Taxpayer & Consumer Rights v. Patent of Wis. Alumni Research Found., No. 2010-001854, 2010 WL 1734377 (B.P.A.I. Apr. 28, 2010).

83 See Consumer Groups File Comments Supporting U.S. Patent Office's Stem Cell Patent Rejection, PUB. PAT. FOUND. (Jan. 23, 2007), http://www.pubpat.org/stemcellcomments.htm (“WARF narrowed its claims in its response to the PTO finding, seeking to patent only stem cells derived from ‘pre-implantation embryos.’ This means that stem cells derived by other methods—such as therapeutic cloning—may not be covered.”). See generally MANUAL OF PATENT EXAMINING PROCEDURE § 2209 (8th ed. 2001) (allowing reexamination to be initiated by any third party willing to pay a fee and submit prior art raising a “substantial new question of patentability”).

84 See 35 U.S.C. § 134(b) (2006) (“A patent owner in any reexamination proceeding may appeal from the final rejection of any claim by the primary examiner to the Board of Patent Appeals and Interferences.”).

85 See PUB. PAT. FOUND., supra note 83 (“The two earlier patents are undergoing ‘ex parte’ reexamination and those rules do not allow formal comment from FTCR and PUBPAT. Nonetheless, the case made by FTCR and PUBPAT in the ‘913 case is relevant to the other two.”).

86 550 U.S. 398 (2007.

87 See PUB. PAT. FOUND., supra note 83 (arguing that the KSR decision strengthens the PTO's rejection of the Thompson patents on obviousness grounds).

88 See 35 U.S.C. § 6(b) (2006) (“The Board of Patent Appeals and Interferences shall, on written appeal of an applicant, review adverse decisions of examiners upon applications for patents.”).

89 See, e.g., Found. for Taxpayer & Consumer Rights v. Patent of Wis. Alumni Research Found., No. 2010-001854, 2010 WL 1734377 (B.P.A.I. Apr. 28, 2010) (reversing the examiner's decision not to make the rejection proposed by FTCR and PUBPAT).

90 See Decisions and other actions by the Board, 37 C.F.R. § 41.77(b)(1) (2011) (“The owner may file a response requesting reopening of prosecution before the examiner. Such a response must be either an amendment of the claims so rejected or new evidence relating to the claims so rejected, or both.”).

91 See Action following decision, 37 C.F.R. § 41.81 (2011) (“The parties to an appeal to the Board may not appeal to the U.S. Court of Appeals for the Federal Circuit under § 1.983 of this title until all parties’ rights to request rehearing have been exhausted, at which time the decision of the Board is final and appealable by any party to the appeal to the Board.”).

92 See Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342, 1347 (Fed. Cir. 2007).

93 Interesting, but not surprising. The USPTO has allowed claims for isolated human products since 1906 when Judge Learned Hand upheld a claim for isolated adrenaline based on the degree of purity. See Parke-Davis & Co. v. H. K. Mulford Co., 189 F. 95, 110 (C.C.S.D.N.Y. 1911).

94 The list of plaintiffs also included two non-profit groups, Breast Cancer Action and the Boston Women's Health Book Collective, that advocate for women's health issues. See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 702 F. Supp. 2d 181 (S.D.N.Y. 2010), rev’d, 653 F.3d 1329 (Fed. Cir. 2011).

95 See Ass’n for Molecular Pathology, 653 F.3d at 1340 (referring to a cease and desist letter received by plaintiff Haig Kazazian, Jr., M.D., which identified as infringing activity any testing “the results of which are … provided to the patient”).

96 702 F. Supp. 2d at 217 (noting that the plaintiffs used the term BRCA1 to define the particular fragment of DNA found on chromosome 17 that relates to a person's disposition to develop breast and ovarian cancer. Similarly, the term BRCA2 describes the “particular fragment of DNA found on chromosome 13 that relates to a person's predisposition to develop breast and ovarian cancer”) (quoting Plaintiff's Memorandum of Law in Support of Motion for Summary Judgment, supra, at 14).

97 Id. at 187-89 (listing various female plaintiffs who desire BRCA1/2 testing by a laboratory other than Myriad or who are unable to afford the out-of-pocket expense of Myriad BRCA1/2 testing).

98 Diamond v. Chakrabarty, 447 U.S. 303 (1980).

99 Id. at 310.

100 Id. (holding that genetically engineered bacteria is patent-eligible because it was designed to break down crude oil, unlike the original bacteria. This difference produced “a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility … [that] is not nature's handiwork [and] … is patentable subject matter under Section 101.”).

101 See Ass’n for Molecular Pathology, 702 F. Supp. 2d at 234 (holding that the method claims for analyzing these gene sequences were invalid under section 101 because they lacked the requisite “transformative” steps required to establish patentability under In re Bilski).

102 Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948).

103 Id. at 131 (“It is no more than the discovery of some of the handiwork of nature and hence is not patentable” because “[t]he combination of species produces no new bacteria, no change in the six species of bacteria, and no enlargement in the range of their utility.”).

104 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329, 1333- 34 (Fed. Cir. 2011).

105 Id. at 1350-53. The Federal Circuit also reversed the lower court on the method claims finding that all but one was patentable under Bilski. Id. at 1355-58. Invalidity was upheld only for claims directed to comparing or analyzing DNA sequences because those claims included no transformative steps and covered only ineligible, abstract, mental steps. See id.

106 See id. at 1352 (“Thus, when cleaved, an isolated DNA molecule is not a purified form of a natural material, but a distinct chemical entity.”).

107 Id. at 1351. Judge Lourie opined that “isolated DNA has been cleaved (i.e., had covalent bonds in its backbone chemically severed) or synthesized to consist of just a fraction of the naturally occurring DNA molecule.” Id. As such, this cleaving and synthesizing “imparts on that isolated DNA a distinctive chemical identity from that possessed by native DNA.” Id. at 1352.

Judge Kimberly Moore's concurring opinion further distinguishes that the isolated cDNA falls into a separate category since cDNA, although based on a naturally occurring RNA template, is totally human engineered and has no naturally occurring counterpart. Id. at 1363-64 (Moore, J., concurring in part). “The claimed isolated cDNA sequences are the creation of man, made using biological tools and the naturally occurring mRNA as a template.” Id. at 1364.

For a recent article agreeing with Judges Lourie and Moore but offering a slightly different spin on the Chakrabarty rule, see Mueller, Janice M., Facilitating Patient Access to Patent-Protected Genetic Testing, 6 J. Bus. & Tech. L. 83 (2011)Google Scholar. In a thought-provoking piece, Professor Mueller disagrees with the Myriad district court and argues that the Chakrabarty rule does not focus on the “markedly different characteristics” between the natural product and the isolated, purified product, but instead simply requires that the isolated product is the subject of human intervention or manipulation. Id. at 87. I find this rationale problematic since the court used the specific term “marked differences” in its holding. Id. (quoting Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 702 F. Supp. 2d 181, 223 (S.D.N.Y. 2010), rev’d, 653 F.3d 1239 (Fed. Cir. 2011)). In fact, crucial to the Chakrabarty court's reasoning is the ability of Dr. Chakrabarty's bacteria to digest crude oil, a feature lacking in its naturally occurring counterpart. Diamond v. Chakrabarty, 447 U.S. 303, 310 (1980). This distinction aligns Chakrabarty with Funk Brothers. In Funk Brothers, although the patentee manipulated and mixed several species of non-inhibitive root-nodule bacteria, the end product was patent-ineligible subject matter because the human intervention did not result in a product biologically different from its naturally occurring counterpart. See Funk Bros., 333 U.S. at 127. Professor Mueller argues that there is no need to align Chakrabarty and Funk Brothers since Chakrabarty was decided under section 101's subject matter requirements and Funk Brothers was decided on obviousness grounds. Mueller, supra, at 86. Although the Funk Brothers court uses the language “lacks inventiveness,” its core holding refers to the root-nodule material as “no more than the handiwork of nature and hence is not patentable.” Funk Bros., 333 U.S. at 442. I would therefore suggest that at best the Kalo patents were invalidated on both subject matter and obviousness grounds. See id. at 442-43. I posit that it is the subject matter rejection that parallels the subject matter analysis in Chakrabarty. Myriad argues that isolated DNA is “markedly different” because it can be used in diagnostic tests or gene therapy, but this property is simply incident to the DNA being ex vivo. See Ass’n for Molecular Pathology, 702 F. Supp. 2d at 230. The utility of the DNA lies in its naturally occurring capability to encode specific information.

108 See Ass’n for Molecular Pathology, 653 F.3d at 1349-50. Note, however, that this does not mean such cDNA sequences will meet the section 103 non-obviousness requirement. See In re Kubin, 561 F.3d 1351, 1356 (Fed. Cir. 2009) (holding that a cDNA sequence is obvious to one skilled in the art when the resulting protein is known).

109 See Ass’n for Molecular Pathology, 702 F. Supp. 2d at 231 (“The use of isolated BRCA1/2 DNA in the production of BRCA1/2 proteins or in gene therapy also relies on the identity between the native DNA sequences and the sequences contained in the isolated DNA molecule. Were the isolated BRCA1/2 sequences different in any significant way, the entire point of their use-the production of BRCA1/2 proteins-would be undermined.”).

110 See Ass’n for Molecular Pathology, 653 F.3d at 1373-81 (Bryson, J., concurring in part and dissenting in part). This was the district court's opinion and also that of Federal Circuit Judge Bryson, dissenting and concurring in part. Id.; see also Yu, supra note 5, at 410 (discussing scholarly and scientific views that in determining patentability, genes should be viewed as “information,” rather than chemical compounds). Thus, isolated genes and gene sequences remain patent-ineligible products of nature since they are “valued precisely for the faithful copies of naturally occurring information contained within.” Yu, supra note 5, at 410. Yu also cites a number of additional authors supporting this position. Id. at 410 n.119, 411 n.122; see, e.g., James W. Fickett, Computation and the Genome Project—A Shotgun Wedding, in THE HUMAN GENOME PROJECT: DECIPHERING THE BLUEPRINT OF HEREDITY 250 (Necia Grant Cooper ed., 1994) (discussing the important role of sequenced genes in the basic understanding of human diseases and conditions); Eisenberg, Rebecca S., Re-Examining the Role of Patents in Appropriating the Value of DNA Sequences, 49 Emory L.J. 783, 786 (2000)Google ScholarPubMed (“DNA sequences are not simply molecules, they are also information.”); Rai, Arti K., Intellectual Property Rights in Biotechnology: Addressing New Technology, 34 Wake Forest L. Rev. 827, 836 (1999)Google Scholar (“Although DNA is, obviously enough, a chemical compound, it is more fundamentally a carrier of information.”).

111 Ass’n for Molecular Pathology, 653 F.3d at 1378 (Bryson, J., concurring in part and dissenting in part). Judge Bryson further distinguishes that although Judge Moore's concurrence establishes the additional utility of isolated gene sequences as probes or primers, this should not be considered by the court since Myriad's claims were limited to the detection of the mutations and did not include any mention of “new uses for the isolated BRCA genes as probes or primers.” Id.

112 Id. at 1348-55 (majority opinion); see also id. at 1358 (Moore, J., concurring in part) (“The ability to use isolated DNA molecules as the basis for diagnostic testing is clearly an ‘enlargement of the range of … utility’ as compared to nature.”) (quoting Funk Bros., 333 U.S. at 131).

113 Judge Bryson analogizes genes to minerals and wild plants. Id. at 1375 (Bryson, J., concurring in part and dissenting in part). He argues that extracting minerals from the earth or cutting a plant from the wild is a difficult process and may require some “physical or chemical changes to the natural substance.” Id. He quickly points out, however, that, like isolated genes, “these changes do not make extracted minerals or plant cuttings patentable, and they should not have that effect for isolated genes.” Id.

114 See id. at 1353 (“We recognize that biologists may think of molecules in terms of their uses, but genes are in fact materials having a chemical nature and, as such, are best described in patents by their structures rather than their functions.”). If this is true, however, then why create separate biotechnology art units in the PTO instead of simply adding more chemistry examiners to evaluate biotech inventions, including isolated bioproducts? See also id. at 1354 (“Finally, our decision that isolated DNA molecules are patent eligible comports with the long-standing practice of the PTO.”).

115 See Utility Examination Guidelines, 66 Fed. Reg. 1092-94 (Jan. 5, 2001).

116 Ass’n for Molecular Pathology, 653 F.3d at 1368 (Moore, J., concurring in part).

117 Id. Judge Moore cites the following statistics: since the early 1980s the PTO has issued over 2600 patents claiming “isolated DNA” and granted over 40,000 DNA related patents. Id. at 1355 (citing Rogers, Eric J., Can You Patent Genes: Yes and No, 93 J. Pat. & Trademark Off. Soc’Y 19 (2011)Google Scholar).

118 Id. at 1370. Judge Moore also cites the long-standing guidelines of the PTO (which allowed isolated gene patents since the 1980s) and the detrimental reliance of the biotechnology industry on these guidelines, as arguments for “leaving intact the settled expectations of property owners … in light of the large number of property rights involved, both to isolated DNA and to purified products in general.” Id. at 1368.

119 See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 6 (1966) (“Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain.”); see also Dinwoodie & Dreyfuss, supra note 17, at 209 (expressing the view that the continued patenting of upstream bioproducts, which are more like scientific principles than inventions, is a “prime exemplar of the Federal Circuit's patent dominated view on innovation”).

120 See Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948) (stating that it is “part of the storehouse of knowledge of all men”).

121 See, e.g., Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803) (“It is emphatically the province and duty of the judicial department to say what the law is.”); see also Eldred v. Ashcroft, 537 U.S. 186, 235 (2003) (Stevens, J., dissenting) (“[T]he fact that Congress has repeatedly acted on a mistaken interpretation of the Constitution does not qualify our duty to invalidate an unconstitutional practice when it is finally challenged in an appropriate case.”).

122 Eldred, 537 U.S. at 223 (Stevens, J., dissenting) (reminding courts to consider constitutionally mandated boundaries of IP statutes and, to promote “Progress” (quoting Graham, 383 U.S. 1 at 6 (“Congress may not overreach the restraints imposed by the stated constitutional purpose.”))).

123 Id. at 236 (“[I]t is obviously correct that no one acquires a vested or protected right in violation of the Constitution by long use … .” (quoting Walz v. Tax Comm’n, 397 U.S. 664, 678 (1970))).

124 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329, 1380 (Fed. Cir. 2011) (Bryson J., dissenting) (noting that the PTO lacks substantive rule-making authority regarding patentability and patent scope, and the degree of deference given the PTO is measured by “the thoroughness and consideration and the validity of its reasoning” (quoting Merck & Co. v. Kessler, 80 F.3d 1543, 1550 (Fed. Cir. 1996))). Judge Bryson further notes that the 2001 PTO guidelines outlining the patentability of isolated genes lack the level of consideration and study to carry any degree of deference by the Federal Circuit. Id.

125 See Petition for a Writ of Certiorari, Ass’n for Molecular Pathology, No. 11-725, (U.S. Dec. 7, 2011).

126 See also Yu, supra note 5, at 413 (acknowledging the plausibility of both perspectives: “[L]ooking at DNA materials from the perspective of the layman—extracted [isolated] genetic material may indeed be seen as ‘artificial,’ since a purified batch of extracted [isolated] material does confer properties that an unpurified, natural batch of DNA materials does not [extracted DNA as a new chemical compound view]. But viewed at a lower level of granularity [DNA as information], extracted DNA begins to look less different. Extracted DNA molecules process the same molecular structures and information as natural forms of DNA [extracted DNA as the biological equivalent of naturally occurring DNA view].”).

127 Should the Supreme Court grant certiorari, I am hopeful that they will be mindful of their role as Keepers of the Constitution. See, e.g., Eldred, 537 U.S. at 235 (Stevens, J., dissenting) (“[T]he fact that Congress has repeatedly acted on a mistaken interpretation of the Constitution does not qualify our duty to invalidate an unconstitutional practice when it is finally challenged in an appropriate case.”).

128 I am using broad categories of stakeholders. Of course, within each category are numerous sub-categories. For example, “industry stakeholders” will likely include representatives from biotechnology, pharmaceutical, genomics, hospitals, and regenerative medicine. Similarly, publicinterest stakeholders might include public and private laboratories, scientific societies, government agencies, individuals, and other non-profits.

129 See, e.g., Jeffrey T. Macher et al., Semiconductors, in U.S. INDUSTRY IN 2000: STUDIES IN COMPETITIVE PERFORMANCE 245, 245 (D.C. Mowery ed., 1999) (“[S]emiconductors are the basic building blocks of many electronics industries.”).

130 See, e.g., SEMICONDUCTOR INDUSTRY ASS’N 1993 ANNUAL DATABOOK 41 (1993); Irwin, Douglas A. & Klenow, Peter J., Sematech: Purpose and Performance, 93 Proc. Nat’L. Acad. Sci. 12739, 12739 (1996)CrossRefGoogle ScholarPubMed (discussing formation of the semiconductor research consortium in 1987); Kastenmeier & Remington, supra note 2, at 432 (“Semiconductor chips are at the center of our information society.”).

131 The term “semiconductor” accurately describes devices composed of semiconductive material such as silicon or germanium, whose conductivity of electricity varies between being insulative and conductive, depending on the purity of the particular material used. See, e.g., Radomsky, Leon, Sixteen Years After the Passage of the U.S. Semiconductor Chip Protection Act: Is International Protection Working?, 15 Berkeley Tech. L.J. 1049, 1053 (2000)Google Scholar (“They do not conduct electricity if the applied voltage is below a certain threshold voltage, but they do conduct electricity if the applied voltage exceeds the threshold voltage.”).

132 See Semiconductors and Related Devices, HIGH BEAM BUS. (2011), http://business.highbeam.com/industry-reports/equipment/semiconductors-related-devices.

133 Id.

134 See, e.g., Macher et al., supra note 129 (“Semiconductor technology has increased the variety of products offered in industries such as consumer electronics, personal communications, and home appliances.”).

135 See Risberg, supra note 44, at 242 (discussing U.S. manufacturer claims of millions of dollars lost to chip piracy).

136 See id. at 243 (“[C]opying firms avoided the enormous development costs associated with chip design [and were] flooding the market with cheap copies.”); see also Kastenmeier & Remington, supra note 2, at 437 (“For less than $1 million, an entire family of chips can be duplicated.”).

137 See Risberg, supra note 44, at 251-52 (“While patent law can protect electronic circuitry or an improved process of manufacture, … the level of creativity involved in [semiconductor topography] designs does not usually rise to the level required by the patent laws”). Ultimately, by the late 1980s and early 90s when semiconductor chips became part of integrated circuits, patents were more frequently granted for integrated circuitry design and manufacturer processes of these chips.

138 17 U.S.C. § 101 (2006) (“[A] useful article … shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that … are capable of existing independently of, the utilitarian aspects of the article.”). Mask works failed the separability requirement of section 101 since they were neither physically or conceptually separable from the electronic utility of the chip itself. See Samuelson, supra note 37, at 473 (“Since chips are clearly ‘utilitarian works,’ to include them under copyright law would have required abandoning one of its fundamental tenets.”).

139 See Rauch, supra note 44, at 408.

140 See Samuelson, supra note 37, at 477-78.

141 See, e.g., Bills Offer Protection for Chips, N.Y. TIMES, June 11, 1984, at D1.

142 See Copyright Protection for Semiconductor Chips: Hearings on H.R. 1028 Before the Subcomm. on Courts, Civil Liberties, and the Admin. of Justice of the H. Comm. on the Judiciary, 98th Cong. 47 (1983) (Intel general counsel indicating preference for modified copyright protection, but not opposing sui generis). Indeed, we will face a similar gap in protection for isolated bioproducts should an en banc panel of the Federal Circuit or the Supreme Court find isolated gene products patent-ineligible subject matter under section 101.

143 See Samuelson, supra note 37, at 496 n.130 (noting that the original Senate bill did not contain a reverse engineering provision, but that one was added later).

144 17 U.S.C. §§ 901-914 (2006).

145 See Baumgarten, Jon A., ‘Reverse Engineering’ and Other Exceptions Under the Semiconductor Chip Protection Act of 1984, in Computer Software And Chips: Protection And Marketing 159, 173 (Practising Law Inst. ed., 1986)Google Scholar (“Noting that the Act is ‘sui generis,’ some have suggested that the patent principle is applicable; others argue that the copyright principle controls.”).

146 17 U.S.C. §§ 901-914.

147 17 U.S.C. § 302 (2006) (the term of copyright protection is currently the life of the author plus seventy years).

148 See Samuelson, supra note 37, at 492 (“The most frequently cited reason for creating a shorter term of protection for chip designs was that the commercial life of any specific chip layout was likely to be relatively short: roughly two to five years in the normal case.”).

149 See id. at 496 (indicating persons who reverse engineer the layout of a chip would be shielded from liability provided that they made more than insignificant changes).

150 Complex chip designs, coupled with the formation of the Federal Circuit and relaxed nonobviousness requirements ultimately led to increased strategic patenting of chip designs as an alternative to protection under the SCPA. See Hall, Bronwyn H. & Ziedonis, Rosemarie H., The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995, 32 Rand J. Econ 101 (2001)CrossRefGoogle Scholar; see also Rauch, supra note 44.

151 U.S. CONST. art. I, § 8, cl. 8.

152 See Samuelson, supra note 37, at 492-93 (pointing out that “gaps” have always existed between patent and copyrights and noting that both statutes exclude discoveries, principles of nature, mathematical algorithms, and significant but obvious improvements in patentable subject matter as examples).

153 See Kastenmeier & Remington, supra note 2, at 422 (“[T]he primary objective of intellectual property laws is not to reward the author or inventor, but rather to secure for the public the benefits derived from the labors of authors and inventors. This objective is achieved by giving authors and inventors the incentive to create.”).

154 U.S. CONST. art. I, § 8, cl. 8.

155 See Samuelson, supra note 37, at 492.

156 “This piracy was perceived to be a threat, not only to the health of the U.S. semiconductor industry, but to the growth of American Information Industries.” See id. (citing H.R. REP. NO. 98-781, at 2 (1984), reprinted in 1984 U.S.C.C.A.N. 5750, 5751-52 (“Because the copyist firm does not have the enormous cost borne by the inventor, such a firm can undersell the innovating firm and flood the market with cheap copies of the semiconductor chip. In an industry in which innovation is absolutely essential, such appropriation of creativity is a devastating disincentive to innovating research and development.”)); see also id. at 496 (“Without the reverse engineering provision, the chip act might not have had the substantial industry support that it did.”).

157 Robert W. Kastenmeier served as former Congressman and Chairman of the House Committee on the Judiciary Subcommittee on Courts during the 98th Congress. OFFICIAL CONGRESSIONAL DIRECTORY 1983-1984, at 334-35 (1983).

158 Michael J. Remington served as Chief Counsel for the Committee. Id. at 335.

159 See Kastenmeier & Remington, supra note 2, at 461 (indicating that for future evaluations of the viability of sui generis intellectual property legislation, we must add the fifth factor to “expressly consider the burgeoning internationalization of intellectual property law”). They go on to point out that the SCPA did include international considerations by including provisions which allowed for interim protection for foreign nationals under section 914 of the Act. Id. at 461-62. Japan was the first country to take advantage of this provision. Id. at 463.

160 Id. at 442 (pointing out that this test was in fact applied to evaluate the record rental legislation, which was the only other amendment to the Copyright Act passed by the 98th Congress).

161 Id. (“A review of [the SCPA] demonstrates that it satisfies all four prongs of the test.”).

162 See Samuelson, supra note 37, at 482 (“[T]he Court had broadly interpreted the constitutional term ‘writings’ to include ‘any physical rendering of the fruits of creative intellectual or aesthetic labor.’” (citing Goldstein v. California, 412 U.S. 546, 561 (1973))).

163 Id. at 489-90 (quoting a Copyright Office spokesperson claiming chip designs could not exist independent of their utilitarian aspects).

164 See id.

165 See Goldstein, 412 U.S. at 546.

166 See Kastenmeier & Remington, supra note 2, at 444; see also Samuelson, supra note 37, at 495-96 (noting that in lieu of a derivative work exclusive right, Congress decided to add a reverse engineering provision to the SCPA, which allowed for others to take apart an existing chip design and incorporate that design into their own new chip as long as the new chip was not a duplicate of the protected chip and contained more than “insignificant” changes).

167 See H.R. REP. NO. 98-781, at 3, reprinted in 1984 U.S.C.C.A.N. 5750, 5752.

168 See Samuelson, supra note 37, at 501.

169 17 U.S.C. § 901 (2006) (defining semiconductor chip product as “the final or intermediate form of any product – (B) intended to perform electronic circuitry functions … .”); see also Rauch supra note 44, at 403-04 (“[P]roduction of a semiconductor chip may require up to 20 masks, each containing patterns for a different layer … . The patterns are ‘written’ on the mask by an electron beam controlled by a computer using coordinates that describe the geometric shapes stored in a computer file. The computer file is created by a layout designer using a graphics workstation. The integrated circuit thus consists of a series of patterns which cooperate to form a functioning circuit.”). Some scholars argued that the SCPA contained too limiting a definition of mask work. See, e.g., Radomsky, supra note 131, at 1057-78 (criticizing that the SCPA was too limited by only protecting the three-dimensional patterns in a semiconductor chip, which failed to fully protect the total topography of integrated circuits; as a result, it would not be infringing to copy one layer of topography, if you did not copy the others.). Other scholars dispute this and opine that the legislative history surrounding the SCPA supports a more comprehensive definition of “mask work” to include the full topography of the chip at the one-, two-, and three-dimensional levels. See, e.g., Kastenmeier & Remington, supra note 2, at 445.

170 17 U.S.C. § 902 (2006); see also H.R. REP. NO. 98-781, at 14, reprinted in 1984 U.S.C.C.A.N. 5750, 5766 (“[A] mask work is ‘original’ if it is the independent creation of an author who did not copy it.”).

171 17 U.S.C. § 905 (2006); see 17 U.S.C. § 903 (defining “owner” of the mask work to include the creator, transferee, or other legal assignee); see also H.R. REP. NO. 98-781, at 15 (1984), reprinted in 1984 U.S.C.C.A.N. 5750, 5766 (discussing ownership).

172 17 U.S.C. § 909(a) (2006) (“The affixation of such notice is not a condition of protection under this chapter, but shall constitute prima facie evidence of notice of protection.”).

173 See H.R. REP. NO. 98-781, at 18, reprinted in 1984 U.S.C.C.A.N. 5750, 5770 (“[Section 906(a)] thus codifies the established industry practice of ‘reverse engineering.’ It is therefore permissible for a competitor to reproduce a mask work by photographing the semiconductor chip product and studying and analyzing the photograph, in order to create another semiconductor chip product that competes with the first one.”).

174 17 U.S.C. § 906(a) (2006).

175 See Samuelson, Pamela & Scotchmer, Suzanne, The Law and Economics of Reverse Engineering, 111 Yale L.J. 1575, 1602 (2002)CrossRefGoogle Scholar.

176 See H.R. REP. NO. 98-781, at 19, reprinted in 1984 U.S.C.C.A.N. 5750, 5771 (“[I]t is an established industry practice to similarly make photo-reproductions of the mask work in order to analyze the existing chip so as to design a second chip with the same electrical and physical performance characteristics as the existing chip (so-called ‘form, fit and function’ compatibility), and that this practice fosters fair competition and provides a frequently needed ‘second source’ for chip products … .”).

177 17 U.S.C. § 906(b) (2006); see also H.R. REP. NO. 98-781, at 19, reprinted in 1984 U.S.C.C.A.N. 5750, 5772 (“Section 906(b) carries over to mask works the ‘exhaustion of monopoly rights’ and ‘first sale’ doctrine of 17 U.S.C. 109(a) and many years of case law.”).

178 17 U.S.C. § 906(b).

179 See also H.R. REP. NO. 98-781, at 11-13, reprinted in 1984 U.S.C.C.A.N. 5750, 5772 (“The owner of a mask work has no right to try to exercise ‘remote control’ over the pricing or other business conduct of its semiconductor chip customers, once the semiconductor chips have passed into their hands.”).

180 17 U.S.C. § 907 (2006).

181 See Kastenmeier & Remington, supra note 2, at 452 (noting that unlike the first two prongs of the KR test, the third prong's requirement to weigh costs and benefits of the proposed IP legislation is “more subjective and less quantifiable”).

182 Id. at 457.

183 Id.

184 Id. at 457-60.

185 Id. at 459.

186 See U.S. CONST. art. I, § 8, cl. 8.

187 17 U.S.C. § 102(a) (2006). Similarly, 17 U.S.C. § 102(b) expressly excludes from protection ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries in order to ensure that this “building block” information remains in the public domain for all to share.

188 17 U.S.C. § 107 (2006).

189 35 U.S.C. §§ 102 (a), 103 (2006).

190 35 U.S.C. § 102 (b).

191 In contrast to patent law's seventeen-year term and copyright law's incredibly long term of life of the author plus seventy years. See H.R. REP. NO. 98-781, at 20 (1984), reprinted in 1984 U.S.C.C.A.N. 5750, 5769.

192 See H.R. REP. NO. 98-781, at 24, reprinted in 1984 U.S.C.C.A.N. 5750, 5773.

193 See Samuelson & Scotchmer, supra note 175, at 1603 (utilizing the term “creative copying” for what the semiconductor industry described as reverse engineering).

194 See, e.g., Rauch, supra note 44, at 431 (“[T]he most important limitation of the Chip Act is the defense of reverse engineering.”).

195 See Samuelson, supra note 37, at 496 n.130 (noting that the original Senate bill did not contain a reverse engineering provision, but that the provision was added later).

196 See H.R. REP. NO. 98-781, at 19, reprinted in 1984 U.S.C.C.A.N. 5750, 5771 (“[T]his practice [reverse engineering] fosters fair competition and provides a frequently needed ‘second source’ for chip products[;] it is the intent of the Committee to permit such reproductions by competitors … [and to make illegal the] wholesale appropriation of the work and investment in the creation of the first chip.”); see also Samuelson, supra note 37, at 496 (noting that the SCPA's reverse engineering provisions were crucial to obtaining unified industry support for this legislation).

197 Kastenmeier & Remington, supra note 2, at 449 (describing the “mature fruit” of the reverse engineering process).

198 See Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1564-65 (Fed. Cir. 1992) (awarding Brooktree Corp. twenty-six million dollars in damages for AMD's infringement under the SCPA, despite the fact that AMD had a reasonable paper trail to establish legitimate reverse engineering to create its own original product. The Federal Circuit held copying fell outside the section 906(a) reverse engineering provision and found infringement even though AMD's chip was only eighty percent similar to the protected mask work. The court opined that an extensive paper trail did not establish legitimate reverse engineering as a matter of law, contradicting legislative history by noting that legitimate reverse engineering will always yield a paper trail.). Some scholars have cited the ambiguity of the SCPA's reverse engineering provision and copyright-like “substantial similarity” infringement test as evidence of the Act's ineffectiveness. See, e.g., Chesser, supra note 44; Rauch, supra note 44.

199 Rauch, supra note 44, at 427 (“infringement under the Act may be difficult to find.”); see also Risberg, supra note 44, at 244 (“[T]he lack of enforcement litigation under SCPA is unexpected, and may suggest either that piracy is no longer a significant problem or that SCPA as drafted offers insufficient protection.”).

200 See Samuelson & Scotchmer, supra note 175, at 1605-06.

201 See Rauch, supra note 44, at 429.

202 Id. (“[T]his complexity scuttles the pirate. He can no longer reproduce each layer of a chip and produce a knock-off in three months.”).

203 See Langlois, Richard N. & Edward, W., Strategy and Circumstance: The Response of American Firms to Japanese Competition in Semiconductors, 21 Strat. Mgmt. J. 1163, 1168 (2000)3.0.CO;2-G>CrossRefGoogle Scholar (noting Japanese dominance in the dynamic random-access memory market from the late 1970s to late 80s with U.S. resurgence beginning in 1985 due, in part, to organizational innovation and specialization).

204 Ultimately, U.S. semiconductor designers like Intel, focused exclusively on complex “specialty function” chips, which incorporate types of layering that are too complex for cheap and easy copying.

205 See Samuelson & Scotchmer, supra note 175, at 1605 (citing the semiconductor industry's growth and limited litigation under the SCPA as factors evidencing the overall positive impact of this statute. They further posit that the inclusion of a provision protecting integrated circuit layouts in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides additional evidence of the positive influence of the SCPA.).

206 See Kasch, Steven P., The Semiconductor Chip Protection Act: Past, Present and Future, 7 High Tech. L.J. 71, 103 (1992)Google Scholar (“Thus, given the present state of technology and the ‘substantial toil and investment’ reverse engineering standard, it is reasonable to inquire as to what vitality the SCPA retains today.”).

207 See Radomsky, supra note 131, at 1089 (“Piracy has been reduced since the mid-1980s.”); see also Samuelson & Scotchmer, supra note 175, at 1607 (positing that since the SCPA probably contributed to the rise in second-source licensing agreements and led to a reduction in chip piracy, it had an overall beneficial effect on the market).

208 See Langlois & Edward, supra note 203, at 1165.

209 Id. at 1169 (noting that in the early 1980s, Japanese chip defect rates were probably half to one-tenth the rates for American products. By 1991, American firms had narrowed the gap in yield rates from fifteen to nine percent).

210 Id.

211 See Global Billings Report History, SEMICONDUCTOR INDUS. ASS’N (Oct. 4, 2011), http://www.sia-online.org/clientuploads/directory/IndustryStatistics/GSR1976-Aug%202011.xls.

212 See Langlois & Edward, supra note 203, at 1169.

213 See Kastenmeier & Remington. supra note 2, at 461-62 (noting that the International Transitions provisions in the SCPA provided the stimulus for other countries to develop their own integrated circuit or topography statutes by setting “a favorable climate for these countries to develop their own chip protection legislation”). Arguably, this “globalizing” effect led to the inclusion of an integrated circuit topography protection provision in the TRIPS agreement.

214 See Samuelson & Scotchmer, supra note 175, at 1606.

215 See, e.g., Radomsky, supra note 131, at 1083 (noting that a large portion of integrated circuits now contain individual semiconductor devices protected by patents); see also Moore, Kimberly A., Worthless Patents, 20 Berkeley Tech. L.J. 1521 (2005)Google Scholar (recounting an empirical study for all patents issued in 1991 to determine which industries valued their portfolios enough to continue to make the appropriate maintenance filings. Her regression data showed that during that period patents on semiconductors and electrical devices were more likely to be maintained than biotech patents.).

216 More specifically, they discuss the bifurcation of the U.S. semiconductor industry into separate design and fabrication components. The design portion of the industry now has more sophisticated designs that are frequently patented and aggressively protected. As a result of this increased patenting and enforceability of patent rights, there has been an increase in second source licensing agreements. See Samuelson & Scotchmer, supra note 175, at 1607. To the extent that the SCPA increased innovation of chip designs for the later generation of patentable designs, it has positively impacted the semiconductor market, which positively impacted the U.S. economy as a whole. Id. at 1607-08.

217 See Kastenmeier & Remington, supra note 2, at 461-62.

218 I posit that Congress had to be aware of the SCPA's small window of applicability since they knew Intel and others had more sophisticated designs in the works that would clearly be protectable and would be protected as patent property.

219 Basically, patentees tend to overvalue their invention's worth on the market, because, after all, it is “their invention.” At the same time, potential licensees want to strike the best possible deal and typically undervalue the patentee's invention, which clearly impedes the ability to “close the deal” and finalize a license. See Heller & Eisenberg, supra note 17, at 701.

220 A “reach through” license provides the licensor with the ability to “reach through” and share some agreed-upon portion of the profits resulting from any downstream products that utilize the upstream licensed technology. See id. at 699.

221 Id. at 698-701; see also Long, Clarisa, Proprietary Rights and Why Initial Allocations Matter, 49 Emory L.J. 823, 826-27 (2000)Google Scholar (outlining the following factors that surround basic research licensing and contribute to an exponential increase in market failures: excessive transactions costs, search costs, and enforcement costs. Professor Long further argues that as one approaches the basic or building-block end of the spectrum, the ability to predict accurately the commercial viability of the technology and its future uses becomes speculative at best. Since both parties lack this data, it becomes difficult to negotiate effectively a technology transfer agreement for future innovation of basic research.). She cites the string of uncertainty surrounding genes and genes fragments as an example of potential market failures. Long, supra, at 832.

222 See Burk, Dan. L. & Lemley, Mark A., Policy Levers in Patent Law, 89 Va. L. Rev. 1575, 1610-14 (2003)CrossRefGoogle Scholar (discussing the economic theories behind the scholarly debate on whether too much patent protection creates an “Anticommons”); Dinwoodie & Dreyfuss, supra note 17, at 206-07 (“Firms specialized in focused upstream work need upstream patents to attract funding and protection against free riders … . These new patents potentially chill progress … because they increase transaction costs, require heterogeneous licensors to agree to terms (which has proved very difficult), allow patentees to disguise coordinated actions that restrain competition, and pose formidable barriers to entry.”); Heller & Eisenberg, supra note 17, at 698. For contrary views that biotech patents do not necessarily create an anticommons, see, for example, Barnett, Jonathan, Property as Process: How Innovation Markets Select Innovation Regimes, 119 Yale L.J. 384, 428-31 (2009)Google Scholar (arguing both that the data is inconclusive that biotech patents create “anticommons” and that the market will go through phases and correct itself by limiting property rights to preserve an adequate balance between innovation and access. He cites the semiconductor industry as an example of an industry that successfully went through these phases.); Holman, Christopher M., Biotechnology's Prescription for Patent Reform, 5 J. Marshall Rev. Intell. Prop. L. 318, 327-31 (2006).Google Scholar

223 See Heller & Eisenberg, supra note 17, at 701.

224 See, e.g., Eisenberg, Rebecca S., Noncompliance, Nonenforcement, Nonproblem? Rethinking the Anticommons in Biomedical Research, 45 Hous. L. Rev. 1059, 1093-98 (2008)Google Scholar; Laakmann, supra note 32, at 71 (arguing for the Federal Circuit to broaden its view of the PHOSITA, and for the Federal Circuit to apply a more “flexible” approach, which will result in many upstream bioresearch tools being found obvious in light of prior art); Resnick, David B., A Biotechnology Patent Pool: An Idea Whose Time Has Come, 3 J. Phil. Sci. & L. (2003)Google Scholar (evaluating the viability of patent pools); Swanson, Suzanne R., The Patentability of Business Methods, Mathematical Algorithms and Computer-Related Inventions After the Decision by the Court of Appeals for the Federal Circuit in State Street, 8 Fed. Circuit B.J. 153, 177 (2009)Google Scholar (discussing commentary regarding “petit patent” protection); Yu, supra note 5, at 428-30 (arguing for the “constitutional requirement” of subject matter eligibility); see also Toward a New Era of Intellectual Property: From Confrontation to Negotiation, THE INNOVATION PARTNERSHIP, http://www.theinnovationpartnership.org/data/ieg/documents/report/TIP_Report_E.pdf (last visited Oct. 4, 2011) (asserting that the old intellectual property paradigm is broken for biotechnology products and arguing for “new IP” such as global implementation of alternative ways to stimulate innovation such as intellectual property protection, plus health and environmental regulation, the judicial system, tax rules, public private partnerships to conduct upstream bioresearch, and publication of licensing information and sources of bioresearch to facilitate licensing); O’Rourke, Maureen, Towards a Doctrine of Fair Use in Patent Law, 100 Colum. L. Rev. 1177, 1203-05 (2000)Google Scholar (advocating a Fair Use limitation for patent law which would require a five-part balancing test); Rose, Simone A., On Purple Pills, Stem Cells and Other Market Failures: A Case For A Limited Compulsory Licensing Scheme for Patent Property, 48 How. L.J. 579 (2005)Google Scholar (advocating a well-defined compulsory licensing provision, which can be utilized in cases of national emergency or where excessive transaction costs/market failures are established).

225 See ADVISORY COMM. ON GENETICS, HEALTH, & SOCIETY, Gene Patents and Licensing Practices and Their Impact on Patient Access to Genetic Tests, NAT’L INST. OF HEALTH (Apr. 2010), http://oba.od.nih.gov/oba/sacghs/reports/SACGHS_patents_report_2010.pdf.

226 See, e.g., Gervais, supra note 16; see also Barnett, supra note 222, at 410-11; Eisenberg, Rebecca S., Patent Costs and Unlicensed Use of Patented Inventions, 78 U. Chi. L. Rev. 53 (2011)Google Scholar. For a contrary view arguing that subpatentable inventions that fail to meet the novelty and nonobviousness requirements of patent law should not receive any type of sui generis property rights due to the high transactional and social cost, see Reichman, Jerome H., Of Green Tulips and Legal Kudzu: Repackaging Rights in Subpatentable Innovation, 53 Vand. L. Rev. 1743, 1775-78 (2000)Google Scholar (using a hypothetical “green tulip” invention to argue that for “small-grain innovations” such as computer programs, integrated circuit designs, and biogenetically engineered organisms “a properly crafted liability rule [e.g. compensatory negotiated ‘reasonable royalty’] would solve follow-on [downstream] applications of sub-patentable know-how industry with fewer social costs [than sui generis rights] and without impoverishing the public domain”).

I posit that the liability scheme is a misfit for isolated bioproducts for the following reasons. First, it is debatable whether many isolated bioproducts would qualify as sub-patentable small grain innovations because many meet the novelty and non-obviousness requirements of patent law, but fail to meet the subject matter eligibility requirements. Second, given the insistence on some type of “patent” protection as a prerequisite before Big Pharma and venture capitalists invest in bioproduct development projects, as well as the reliance on twenty-year patent protection for these products, it becomes easier to argue for a sui generis parapatent property paradigm rather than the more tenuous compensatory liability regime. See, e.g., Graham et al., supra note 34, at 1279 (“[V]irtually all (ninety-seven percent) [of venture-backed start-up] companies in the biotechnology and medical device sectors hold patents—while holding patents is less likely for venture-backed IT firms.”). The authors note that their survey results lead to two conclusions: “First, early stage biotechnology companies are more likely to use, and to see utility in using, the patent system and second, venture investors are interested in patents, and venture-capital companies are much more likely to hold and file for patent.” Id. at 1280. Furthermore, the authors found that the biotechnology industry as a whole is much more reliant on patent protection. Id. at 1277, tbl.1 (reporting seventy-six percent of biotechnology start-up companies surveyed held patents and patent applications as compared to thirtynine percent overall and twenty-four percent in the software industry, thereby indicating that the biotechnology industry prefers to rely on patent protection when compared to other industries overall and the software industry specifically). In light of this reliance, instead of a liability scheme, I propose that a well-crafted parapatent statute can address the “access” concerns for the public domain and downstream innovation via targeted compulsory licensing and/or fair use provisions.

227 Like other scholars, I am using the term “parapatent” to describe a property scheme that is “patent-like” in its overall framework, but that has a shorter term of protection. See generally Aoki, Keith, Food Forethought: Intergenerational Equity and Global Food Supply-Past, Present, and Future, 2011 Wis. L. Rev. 399, 439 (2011)Google Scholar (discussing the use of parapatents for plants). Some scholars refer to these as “petit patents.” See Swanson, supra note 224, at 177. Unlike the patent right, the parapatent allows for “copyright-like” limitations to allow greater access to this material during its term of protection.

228 Of course, this is contrary to the majority and concurring Federal Circuit opinions in the Myriad case, but coincides with the opinion of both the district court and Judge Bryson's mixed dissent and concurrence in the Federal Circuit. See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329, 1379-81 (Fed. Cir. 2011). Congress's interest in fostering growth in the regenerative medicine sector is evidenced by pending House Bill 1862, which amazingly has bipartisan support and advocates tax relief and codification of President Obama's executive order allowing federal funding for embryonic stem cells, as well as numerous federally funded grants to stimulate stem cell research. See Alex Phillippidis, Advocates Attempt to Advance Regenerative Medicine with Introduction of HR 1862, GEN (Jul. 20, 2011), http://www.genengnews.com/analysisand-insight/advocates-attempt-to-advance-regenerative-medicine-with-introduction-of-hr-1862/77899433/.

229 Industry Says Biotech Drug Companies Need at Least 14 Years of Data Exclusivity, PHARM. L. & INDUSTRY DAILY (BNA) (Jan. 1, 2009) http://news.bna.com/pidm (follow “All Issues” hyperlink, then follow “01/01/2009” hyperlink, followed by “News” hyperlink).

230 See, e.g., Mireles, Michael S. Jr., States as Innovation System Laboratories: California, Patents, and Stem Cell Technology, 28 Cardozo L. Rev. 1133, 1159-63 (2006)Google Scholar. But for scholars who argue that the market can take care of itself and create its own royalty pools and efficient licensing agreements, I cite the cautionary tale of Myriad and others. I concede that we can point to successful licensing arrangements of upstream isolated bioproducts. Due, however, to the inconsistency and inability to predict when market failures will occur, I posit that we should go to the more uniform and reliable fair use/compulsory licensing paradigm.

231 See Heller & Eisenberg, supra note 17 (defining a patent stacking and reach through licenses and discussing how patenting basic research products leads to market failures and the creation of an “anticommons” of knowledge); discussion supra note 218.

232 See Rose, supra note 224, at 620 (noting that a compulsory licensing provision in the Patent Act would create the “wings effect” of motivating major pharmaceuticals and other patentees to initiate social-marketing or voluntary licensing schemes, which in turn, will increase access to these essential products”); see also Mueller, supra note 107, at 99 (noting that the “threat of compulsory licensing encourages patentees to license more widely and on more reasonable terms”). Professor Mueller cites India and the United Kingdom as examples of countries where the compulsory licensing provisions had this “wings effect.” Mueller, supra note 107, at 99 n.110. Professor Mueller also cites potential administrative delay associated with implementing and challenging the compulsory licensing royalty scheme as possible downsides to a compulsory licensing limitation. I posit that despite these risks, the value of uniformity and reduced market failures makes the compulsory licensing a viable option.

233 Bayh-Dole Act, 35 U.S.C. §§ 200-212 (2006); see also Pulsinelli, Gary, Share and Share Alike: Increasing Access to Government-Funded Inventions Under the Bayh-Dole Act, 7 Minn. J.L. Sci. & Tech. 393, 397–402 (2006)Google Scholar.

234 See, e.g., Clifton Leaf, The Law of Unintended Consequences, FORTUNE (Sept. 19, 2005), http://money.cnn.com/magazines/fortune/fortune_archive/2005/09/19/8272884/index.htm (asserting that an unintended consequence of Bayh-Dole was the legal rush by university scientists to patent their research, which “diverted scientists from doing science”); see also Pulsinelli, supra note 233, at 430-42 (outlining arguments of critics of Bayh-Dole, such as Professors Rebecca Eisenberg and Arti Rai. The author then proposes a compulsory licensing scheme where university researchers should be given limited, royalty-free licenses to make or use for research purposes, and underlying patent.); Mireles, supra note 230 at 1155-63 (outlining praise and criticism of Bayh-Dole and discussing the unintended consequences of creating a research anticommons, a shift in research agenda by University scientists, and a delay in publication or withholding of research materials).

235 The House Committee on Energy and Commerce is currently considering a bill to create a regenerative medicine group to seek tax breaks and other funding for stem cell research. This may be unlikely to progress, given the mandate to cut billions of dollars from the current budget. See H.R. 1862, 112th Cong. (2011).

236 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 653 F.3d 1329, 1358 (Fed. Cir. 2011) (Moore, J., concurring in part).

237 35 U.S.C. § 271 (2006).

238 The Leahy-Smith America Invents Act reforms patent law in three major ways: (1) inventors are now awarded patent rights based on the first to file a patent application, rather than the first to invent, (2) there are now three new ways for third parties to challenge patents and applications, and (3) there are new changes relevant to patent litigation, such as joinder restrictions, elimination of the best mode defense and expansion of the prior user defense. See Pub. L. No. 112-29, 125 Stat. 284 (2011).

239 35 U.S.C. § 102 (2006); see also Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011).

240 An alternative route would be to require “originality,” and like the SCPA, expressly exclude isolated bioproducts that are “staple, commonplace, or familiar in the semiconductor industry, or variations on such designs, combined in a way that, considered as a whole, are not original.” Given, however, the biotech's industry's reliance and insistence on the patent property right, it's unlikely that these stakeholders would agree to terminology that puts them farther away from patent-like protection and closer to copyright.

241 Currently section 112 of the Patent Act includes the requirement that the inventor disclose the “best mode” of carrying out the claimed invention known at the time of filing the patent application. The inventor must amend the patent disclosure if a better mode is discovered after the patent issues. See 35 U.S.C. § 112 (2006).

242 See Utility Examination Guidelines, 66 Fed. Reg. 1092-97 (Jan. 5, 2001).

243 See Ass’n for Molecular Pathology v. U.S. Patent & Trademark Office, 702 F. Supp. 2d 181, 186-92 (S.D.N.Y. 2010), rev’d, 653 F.3d 1329 (Fed. Cir. 2011).

244 See id. at 186 (describing the Association for Molecular Pathology as a non-profit scientific society dedicated to genomic research and providing clinical diagnostic testing for patients, including diagnosis for breast cancer).

245 See, e.g., Conley, Vorhaus & Cook-Deegan, supra note 20 (noting that basic BRCA testing costs range from $3000-$4000 depending on the payer, and that prices are expected to increase because of the Myriad litigation). The authors further note that “BRCA testing accounts for a striking 88% of the company's nearly $400 million in annual revenues, with only 2% of these sales occurring [outside the] U.S.” Id.

246 See Robertson, Andrew S., The Role of DNA Patents in Genetic Test Innovation and Access, 9 Nw. J. Tech. & Intell. Prop. 377, 389 (2011)Google Scholar (citing notable lenient licensing examples, such as Jonas Salk's refusal to patent the polio vaccine and Francis Collins and others's advocacy for broad licensing of the cystic fibrosis-linked gene).

247 See Kastenmeier & Remington, supra note 2, at 453.

248 Id. at 422.

249 In contrast to patent law's then–seventeen-year term and copyright law's incredibly long term of life of the author, plus seventy years. See H.R. REP. NO. 98-781, at 20 (1984), reprinted in 1984 U.S.C.C.A.N. 5750, 5769.

250 Id. at 5773.

251 Id. at 5771 (discussing how the SCPA's reverse engineering provided greater public access for copying registered chip designs to produce new and efficient chip designs that could perform similar functions with different and improved mask work designs).

252 See Rose, supra note 224; see also Mueller, supra note 107, at 99. Moreover, as noted previously, with breast cancer being the second leading cause of death of woman in the United States, greater access to the BRCA genes is a significant benefit.

253 See, e.g., Radomsky, supra note 131, at 1086 (noting that most industrialized countries passed their own sui generis legislation in response to the SCPA).

254 See Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, in THE LEGAL TEXTS: THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS 320 (1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994). As part of the TRIPS agreement, the World Trade Organization was established to enforce international trade agreements and TRIPS.

255 See, e.g., Dinwoodie & Dreyfuss, supra note 17, at 208-09 (contrasting the earlier Paris Convention treaty requirements with TRIPS and noting that any “basic science” amendments to the Patent Act, such as compulsory licensing or fair use, run the risk of conflicting with article 27.1 of the TRIPS provisions, which requires member states to make “patent rights enjoyable without discrimination … as to the field of technology, restrictions on compulsory licensing and limitations on defenses to infringement”); see also Reichman, supra note 226, at 1796-97 (exploring the global impact of a compensatory liability regime for “small-scale innovations of importance to local industries” and concluding that such a regime would allow developing countries to provide a more efficient means of stimulating innovation and protecting “indigenous know-how”).

256 See Dinwoodie & Dreyfuss, supra note 17, 209-10 (suggesting that article 27.1's “subject matter neutrality” requirements be read narrowly so that bioinformatics subject matter would clearly be excluded from the patent right and thus not subject to the article 27.1 provisions).

257 Id.

258 See Ann, Christoph, Patents on Human Gene Sequences in Germany: On Bad Lawmaking and Ways to Deal With It, 7 German L.J. 279, 279 (2006)CrossRefGoogle Scholar, http://www.germanlawjournal.com/pdfs/Vol07No03/PDF_Vol_07_No_03_279-292_Articles_Ann.pdf (“Whether patents should be granted on human genes or gene sequences is highly controversial, both ethically and politically; not only in Germany but throughout Europe and the rest of the world.”); Ayme, S. et al., Patenting and Licensing in Genetic Testing: Recommendations of the European Society of Human Genetics, 16 Eur. J. Hum. Genetics S3 (Supp. 2008)CrossRefGoogle ScholarPubMed, available at http://www.nature.com/ejhg/journal/v16/n1s/pdf/5201929a.pdf; see also Gitter, Donna M., International Conflicts Over Patenting Human DNA Sequences in the United States and the European Union: An Argument for Compulsory Licensing and a Fair-Use Exemption, 76 N.Y.U. L. Rev. 1623, 1668-70 (2001)Google Scholar (discussing the continued “suspicion” in the European Union of patenting DNA sequences and arguing that while both the E.U. patent directives and U.S. patent law caved to the pressure to patent this biological material, the European Union and particularly Germany, have been more vigilant in continuing to question and challenge the viability of such protection).

259 Ann, supra note 258 (documenting larger public policy recommendations and noting that in Europe the current public opinion is against the patentability of human genes. The authors and others have already begun a dialogue with stakeholders, such as patients, biopharmaceutical and health industries, hospitals, laboratories, and research institutions to revisit existing patenting policies.). Note also that the Court of Justice of the European Union, the E.U.'s highest court, recently invalidated all stem cell method patents requiring the destruction of human embryos. See Press Release No. 112/11, COURT OF JUSTICE OF THE EUROPEAN UNION, A Process Which Involves Removal of a Stem Cell from a Human Embryo at the Blastocyst Stage, Entailing the Destruction of that Embryo, Cannot Be Patented, (Oct. 18, 2011). While Germany allows gene patenting, it has gone against the E.U. biotechnology directive and limits the scope of patenting for gene sequences. Specifically, Germany requires that the patentee state the specific utility for the particular sequence and the patentee's scope of protection is limited to that specific utility or function. See Patentgesetz [PatG] [German Patent Act] 2009 Reichsgesetzblatt [RGBl] II at 1 § 1a(4) (F.R.G.); see also Ann, supra note 258, at 281 (discussing Germany's reluctant adoption of the E.U. biotechnology directive (citing Gesetz zur Umsetzung der Richtlinie über den rechtlichen Schutz biotechnologischer Erfindungen [Statute Implementing the European Council's Biotechnology Directive], Jan. 28, 2005, BGBL. I at 146 (Ger.), available at http://www.bgbl.de/Xaver/start.xav?startbk=Bundesanzeiger_BGBl)).

260 See Ayme, supra note 258.

261 See Gold & Carbone, supra note 50 (discussing Japan, Canada, and Australia's current policies of gene patenting and noting that Australia is currently conducting dialogue about the continued patentability of genes and possible alternative property schemes).