Patent Grid Lock: Clearing Traffic

Trying to get from point A to B can be frustrating, particularly when stuck in gridlock. A situation Michael Heller likens to the American (and by default, the Canadian) patent system. Heller argues in his article titled “Where are the Cures” [1], that the current patent laws hinder researchers’ abilities to develop medical cures. The cause of the gridlock: too many ‘unusable’ patents.

Canadian courts have ruled, as have our American counterparts, that biotechnologies (such as genetically modified bacteria) are patentable, and as such, the approval of the ‘original innovator’ must be sought for the use of their patented biotechnology. In the realm of medical research, various biotechnologies need to be used and researched in order to advance medicine, exponentially increasing the cost of research and the time expended in securing approvals for patent use. It can be easy to side against the Big Bad Pharmaceutical Company, claim greed, and argue for sacrifice, but one must consider the repercussions for innovation and research. In today’s capitalist economy, profit, not public charity, drives the market. Research is expensive, and if innovators are unable to claim compensation or recover the costs of their investment, then what is the incentive to continue research, other than one’s own interest, initiative, or will to do good? Bills can only be paid in money. Researchers can thus opt to: (1) pay potentially exuberant royalties, (2) abandon the research, or the ever popular (3) ignore the patent and risk a lawsuit. The first two options can thus render patents unusable, while the third option is illegal. None of the options strike the required balance of meeting the needs of the innovator, researcher and public. The innovator wants to be paid for their research, the researcher wants to use biotechnologies at the lowest cost possible, and the public wants medicine advanced.

How can balance be achieved? Heller suggests adjusting infringement damages; an option which changes the cost benefit analysis of the parties involved, but does nothing to improve the situation. Instead, it may be beneficial to look to other areas of IP for guidance, particularly copyright. The Copyright Act[2] allows for exemptions under the guise of fair use. Essentially, this prevents certain uses of works from constituting infringement. This concept could be applied to biotech patents, allowing researchers to use and investigate patented materials without requiring the approval of the original innovator. In order to ensure that the innovator is not left without profit or recourse, there could be a requirement that the researcher advise the innovator that their patented material is being utilized in research. A capped royalty payment could ensure that the innovator is able realize on some profit. In addition, if the material developed out of the use or research of a previously patented biotechnology, the original innovator could claim a higher (pre-determined) royalty. Ultimately, the innovator is paid for their patent, and the researcher is able to further research, both of which move research and innovation forward without leaving the public in perpetual gridlock.

1 Michael Heller, “Where are the Cures? How Patent Gridlock is Blocking the Development of Lifesaving Drugs”. (Forbes Magazine: July 17, 2008) << >>
2 Copyright Act, R.S.C. 1985, c.C-42