Abstract:The view of patents as well defined property rights is as simplistic as it is ubiquitous. This paper argues that in newly arising or immature technologies, patents are subject to intrinsic and extrinsic uncertainty that make them very opaque representations of the underlying inventions. The opacity is a result of unsettled legal doctrine and scientific terminology, uncertain commercial and technological prognosis, and leads to considerable ambiguity in property parameters. Patents in immature technologies do not solve Arrow's information paradox of non-rivalrous goods because they do not represent the sharp exclusive right that is central to his thesis. In such cases patents ought to be reclassified in terms of their perceived and actual function as credence goods. The difficulty in discovering the value of these patents necessitates credence verifiers, further increasing the transaction costs of encouraging innovation. The theoretical and empirical implications of credence explored in this paper are based primarily on the Anglo-American legal protection of biotechnological inventions, but may equally be relevant to patents in other newly arising technologies.
Abstract:The Indian Supreme Court's (SC) decision in Novartis v Union of India (UOI), decided earlier this year, formalizes a concerted and focused attempt by Indian law-makers to reject trivial secondary pharmaceutical inventions. The SC concluded that S 3(d) of the Indian Patents Act made new forms of known substances ineligible for patents in the absence of 'enhanced efficacy', which in this case was defined as 'therapeutic efficacy'. This paper argues that the SC wrongly ignored the context of S 3 and Chapter II of the Act, which is a medley of exclusions, exceptions and ineligible subject matter, each of which can be differentiated by the need to involve the person skilled in the art standard. In this case a greater appreciation of the flexibility afforded by this notional standard as part of a broader non-obviousness enquiry would have led the SC to a more conventional and legitimate legal option. Instead the SC's adoption of the patent eligibility route has paradoxically left it much less room to manoeuver the law around secondary pharmaceutical inventions.
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