Uncertainty of Patent Validity

The indeterminacy of the validity of patent claims is another factor that adds to information costs. Even if patents are granted on the basis of satisfying patentability requirements, they nonetheless are subject to revocation or amendment.68 _{The validity of patents is thus fraught with uncertainty, as patent}

offices issue patents that can end up judged by courts as invalid. This situation of uncertainty has caused Lemley and Shapiro to label patents as ‘probabilistic rights’.69

One factor responsible for the probabilistic nature of patents is that information is indivisible— an outcome of a recombination of previously existing information

66 _{For example, see Generics [UK] Limited trading as Mylan v Yeda Research and Development}

Co. Ltd, Teva Pharmaceutical Industries Limited [2012] EWHC 1848 (Pat) Paragraph 219.

67_{[2004] R.P.C. 46, paragraph 42.}

68 _{Mark Janis, ‘Rethinking Reexamination: Toward a Viable Administrative Revocation System for}

U.S. Patent Law’ (1997) 11 Harvard Journal of Law and Technology 3-117; see also, Phillip Leith, ‘Judicial or Administrative Roles: the Patent Appellate System in the European Context’ (2001) 1 Intellectual Property Quarterly 50-99.

69 _{Mark Lemley and Carl Shapiro, ‘Probabilistic Patents’ (2005) 19 Journal of Economic}

and complementarity between available information. 70 _{It is by virtue of}

indivisibility that it is impossible to unequivocally discern how ideas differ in terms of quality.71 _{In addition to the indivisibility of information, judicial}

discretion is responsible for the indeterminacy of patent validity. The deciding judge may bring several factors to bear, depending on the type of patentability requirement in issue. For example in determining enablement, the court could be lenient or strict, depending on the court’s consideration of the degree of experimentation required by the skilled person to put the invention to work.72

The same could be the case in non-obviousness determinations. The court’s consideration of whether the skilled person would have successfully mosaicked several pieces of technological or scientific information in the search for a solution is sometimes also a matter of judicial discretion. 73 _{Judicial discretion is}

particularly prominent when secondary factors, such as commercial success and long-felt market needs, are used to determine non-obviousness.74 _{In addition, as}

Powles argues,75 _{patentable subject matter can be expanded by judicial discretion.}

70 _{Cristiano Antonelli, ‘Knowledge Complementarity and Fungeability: Implications for Regional}

Strategy’ (2003) 37 Regional Studies 595-606; see also,Cristiano Antonelli, ‘Collective Knowledge Communication and Innovation: The Evidence of Technological Districts’ (2010) 34 Regional Studies 535-547.

71 _Ibid.

72 _{Guang Whitley, ‘A Patent Doctrine without Bounds: The “Extended” Written Description}

Requirement’ (2004) 71 University of Chicago Law Review 617-637; see also, William Macomber, Judicial Discretion in Patent Causes’ (1914) 24 The Yale Law Journal 99-110; see also Redin Woodard, A Reconsideration of the Patent System as a Problem of Administrative Law’ (1942) Harvard Law Review 950-977.

73 _{Gordon Harris, ‘Why Obviousness is Anything But Obvious’ (2007) 174 Managing Intellectual}

Property 34-37; see also James Cherry, ‘Standard of Inventiveness for Australian Patents’ (1996) 18 European Intellectual Property Review 356-368.

74 _{Jay Jongjitirat, ‘Leapfrog Enterprises v Fisher-Price: Secondary Considerations in Non-}

Obviousness Determinations.’ (2008) 42 University of California DavisLaw Review 599-629; see also, Jonathan Darrow, ‘Secondary Considerations: A Structured Framework for Patent Analysis’ (2010-2011) 74 Albany Law Review 47-92.

75 _{Julia Powles, ‘Industrial Applicability of Bioscience Inventions in the Supreme Court’ (2012) 71}

Cambridge Law Journal 50-52 (‘To avoid chilling such investment, a low threshold for industrial applicability (and other validity requirements) inevitably follows’).

International trade and political factors also shape judicial discretion in respect of the validity of patents.76 _{Two factors inform relevant judicial positions on the}

assessment of validity:

a) the nature of patent laws of a state mirror the extent of transnational investment and trade volumes the state can attract. In other words, courts may be lenient in their positions on patent validity in order to enable patent protection for inventions, usually of controversial nature, applied for by foreign investors or multinational companies.

b) patents serve as alternatives to tariffs in that they discourage importation and enhance the fortification of local industries. This can be easily explained by stating that the bar on patent validity can also be lowered so as to provide patent protection on debatable patent subject matter with a view to encouraging local manufacturers or industries.77

These reasons partially account for a proliferation of patents of dubious validity, such as those on software and biological matters. This was well encapsulated by Sir Robin Jacobs in Aerotel Ltd v Telco Holdings Ltd:78

… there is pressure from would-be patentees on patent offices. People are applying for what are, or arguably are, business method and computer program patents in significant numbers. …….This pressure in part stems from the fact that, following the State Street Bank case…people have started getting patents for these subject matters in the USA. Since they can get them there, they must as a commercial necessity apply for them everywhere. If your competitors are getting or trying to get the weapons of business methods or computer program patents you must too. An arms race in which the weapons are patents has set in. The race has naturally spread worldwide….79

76 _{Joshua Harrison, ‘On the Convergence of US and Australian Patent Law’ (2001) 2 Melbourne}

Journal of International Law 352-379.

77 _Ibid.

78 _{[2007] Business Law Reports 634, paragraph 25.} 79 _{Ibid, paragraph 25.}

However, it appears that globally, there has been contraction in the grant of patents of dubious nature, with judicial caution expressed in US cases such as Bilski v Kappos80 and Alice Corp. v. CLS Bank International.81 _{The simple}

implication of these cases is that the threshold for patent eligibility of software has been raised, which makes securing the grant of such patents more difficult than was previously the case. Another case of significance is Mayo Collaborative Services v Prometheus Laboratories, Inc,82_{decided in 2011, where the US Supreme}

Court decided against patent validity of claims relating the ascertainment of medical correlation with a view to knowing the amount of dosage to administer to patients. The court reasoned that the correlation between the administration of a drug and its result on a patient was entirely a natural phenomenon over which a patent should not be granted. The likely effect of this case is that it is apt to dampen the grant of patents on dosage regimen.83

Scholars have rightly suggested that patent offices are constrained at the time of grant by informational and budgetary considerations, and this adds to the validity conundrum.84 _{Patent applications, they say, are} ex parte _{and the decision to be}

made by the patent officer on whether a patent is valid or not, is contingent upon available supporting or adverse information.85 _{Additionally, the avalanche of}

applications in ratio to the examiners at patent offices places budgetary limitations on patent offices, as time, personnel, and other resources have to be optimized to assess applications.86 _{This is why it is surmised that patent}

examiners have little incentive to thoroughly examine patents, but shift the

80 _{561 U.S. 593 (2010).} 81 _{134. S. Ct. 2347 (2014).} 82 _{132 S. Ct. 1289 (2012).}

83 _{See, Na An, ‘Decline of Dosage Regimen Patents in Light of Emerging Next-Generation DNA}

Sequencing Technology and Possible Strategic Responses’ (2016) 17 Minnesota Journal of Law, Science and Technology 907.

84 _{Alan Delvin, ‘Revisiting the Presumption of Patent Validity’ (2008) 37} Southwestern University

Law Review 325-396; see also, Scott Kieff, ‘The Case for Preferring Patent Validity Litigation Over Second-Window Review and Gold-Plated Patents: When One Size Doesn’t Fit All, How Could Two Do the Trick?’ (2009) 157 University of Pennsylvania Law Review 1938-1963; see also, Mark Lemley and Bhaven Sampat, ‘Is the Patent Office A Rubber Stamp’ (2008-2009) 58 Emory Law Journal 101-128.

85 _{Doug Litchtman and Mark Lemley, ‘Rethinking Patent Law’s Presumption of Validity’ (2007) 60}

Stanford Law Review 45-72.

responsibility of weeding out underserving patents to the courts.87 _{Lemley, for}

this reason, described patent offices as being ‘rationally ignorant’.88 _{In summary,}

the uncertainty of the assessment of patent eligibility contributes to the information costs problem.