Intellectual Property Rights as an International Public Good and the Frontiers of Patent Competition

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1. In 1998, the U.S. society experienced two impressive incidents on patens. First, on July 23rd, the CAFC ruled in the State Street Bank v. Signature Financial Group that business methods are patentable. Second, on October 6th, the Incyte Pharmaceutical Inc. was awarded patent on ESTs. Thereafter, significant increase in patent filings especially in the areas of business methods and biotechnology has occurred. Methods of doing business as well as genome information have the public-good qualities, so with the application boom a kind of rivalry between "common interests of mankind" and "privatization of knowledge" has become worse.2. The recent proliferation of patent rights in biotech research suggests "the tragedy of anticommons" in which people underuse scarce resources is occurring. Privatization of genome information-basic research results that formerly would have been made freely available in the public domain-may cause a forest of genetic patents of upstream genome medicine and put restrictions on access by pharmaceutical firms. As a result, downstream product development will be more expensive and slower. Although the USPTO asserts that patent pool is effective to solve the problem, the usefulness of patent pool is very doubtful at least in the sphere of genome medicine.3. There has been a dramatic rise in the number of BMPs (especially e-commerce patents) since the State Street decision. This recent patent flood has given rise to several problems such as low quality patents, increased litigation, and delay of cumulative innovation. Although the USPTO's initiative to improve the quality of business method patents has proved successful, a fundamental problem still remains unsolved. Business method patents currently retards rather than promote innovation which is the main goal of U.S. patent law. So it is important to formulate a concrete plan for reforming the patent system.