Washington Law Review


Scientists who require multiple "research tools" (i.e., laboratory resources such as transgenic animals and biological receptors) to develop new drugs and medical diagnostic products are frequently finding that these tools are patented or subject to other proprietary constraints. Stacking royalty obligations and heightened transaction costs resulting from the proliferation of patents on research tools threaten to slow or stop the development of new drugs and devices critical to public health. Because U.S. courts have very narrowly interpreted the common law "experimental use" defense of patent law as limited to "dilettante" uses of inventions for mere "amusement" or "philosophical" inquiry, scientists face the daunting choice of either negotiating numerous licenses or risking the possibility that their research and development will be enjoined. In response to this dilemma of mounting transaction costs and increasingly restricted access to patented research tools, this Article argues for a broadened rule of "development use" that would permit scientists to use certain patented research tools without prior authorization, but require that the research tool patent owner be paid an ex post royalty based on the ultimate commercial success of the new drugs orotherproducts developed through use of the tool. This "reach-through" royalty approach maintains incentives forthe development and patenting of new research tools, but alleviates the access restrictions and up-front costs currently associated with their acquisition and use.

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