Communities of innovation

Northwestern University Law Review

Volumn 106, Issue 1, 2012, Pages 103-155

  Mattioli, Michael ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

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EID: 84863547709     PISSN: 00293571     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Note

References (405)

1. Jonathan M. Barnett, Property as Process: How Innovation Markets Select Innovation Regimes, 119 YALE L.J. 384, 387-91, 432-37 (2009) (proposing that patent holders purposefully share their assets under certain circumstances to further collective innovation).
2. The idea that intellectual property naturally evades excessive appropriation was expressed by Thomas Jefferson. See Letter from Thomas Jefferson to Isaac McPherson (Aug. 13, 1813), in 6 THE WRITINGS OF THOMAS JEFFERSON 175, 180 (H.A. Washington ed., 1861) ("That ideas should be freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement.").
3. Many books and academic articles on the subject of patent overbreadth have been published in recent years.
4. ADAM B. JAFFE & JOSH LERNER, INNOVATION AND ITS DISCONTENTS 2 (2004) ("[T]he patent system-intended to foster and protect innovation-is generating waste and uncertainty that hinders and threatens the innovative process.").
5. James Bessen & Michael J. Meurer, PATENT FAILURE: HOW JUDGES, BUREAUCRATS, AND LAWYERS PUT INNOVATORS AT RISK (2008) (arguing that the costs of the patent system outweigh its benefits, in part because mechanisms that might prevent patent proliferation are not working properly).
6. DAN L. BURK & MARK A. LEMLEY, THE PATENT CRISIS AND HOW THE COURTS CAN SOLVE IT (2009) (discussing, inter alia, the proliferation of dubious patents and the harms of excessive patent litigation).
7. NAT'L RESEARCH COUNCIL OF THE NAT'L ACADS., A PATENT SYSTEM FOR THE 21ST CENTURY 81-129 (Stephen A. Merrill et al. eds., 2004) [hereinafter NRC, 21ST CENTURY] (recommending improvements to the currentpatent system).
8. Jaffe & Lerner, supra note 4, at 11-17 (characterizing these shifts as "the patent explosion").
9. In 1990, there were 176,264 patent filings, compared to 482,871 in 2009. PATENT TECH. MONITORING TEAM, U.S. PATENT & TRADEMARK OFFICE, U.S. PATENT AND STATISTICS CHART, CALENDAR YEARS 1963-2010 (2011), available at http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm.
10. The number of patents issued during the period also grew from 99,077 to 191,927.
11. The rate of patent litigation may also be on the rise. See, e.g., Gideon Parchomovsky & R. Polk Wagner, Patent Portfolios, 154 U. PA. L. REV. 1, 56 (2005) ("[T]he rate of [patent] litigation is rising among small firms and firms with smaller total patents.").
12. But see Jean O. Lanjouw & Mark Schankerman, Enforcing Intellectual Property Rights 3 (Nat'l Bureau of Econ. Research, Working Paper No. 8656, 2001), available at http://www.nber.org/papers/w8656 ("[T]he growth in patenting has been comparable to the growth of litigation ....").
13. See, e.g., Ian Ayres & Gideon Parchomovsky, Tradable Patent Rights, 60 STAN. L. REV. 863, 868-69 (2007).
14. Ironically, Newton's famous quote is adapted from a similar metaphor used by Bernard of Chartres.
15. See THE METALOGICON OF JOHN OF SALISBURY 167 (Daniel D. McGarry trans., Univ. of Cal. Press 1955) (1159) ("Bernard of Chartres used to compare us to [puny] dwarfs perched on the shoulders of giants. He pointed out that we see more and farther than our predecessors, not because we have keener vision or greater height, but because we are lifted up and borne aloft on their gigantic stature." (alteration in original)).
16. Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCI. 698, 698-99 (1998) (discussing that a "specter of rights" surrounding patents may discourage investment in product development).
17. This term was directly inspired by Michael Heller's use of the term "gridlock" to describe transactional failures caused by excessive propertization. MICHAEL HELLER, THE GRIDLOCK ECONOMY: HOW TOO MUCH OWNERSHIP WRECKS MARKETS, STOPS INNOVATION, AND COSTS LIVES xiii-xiv (2008).
18. See, e.g., JAFFE & LERNER, supra note 4, at 1-24 (summarizing trends under the Federal Circuit and at the USPTO that have resulted in a greater apportionment of patent rights).
19. Compare State St. Bank & Trust Co. v. Signature Fin. Grp., Inc., 149 F.3d 1368, 1373-75 (Fed. Cir. 1998) (establishing the "useful, concrete, and tangible result" test for patentable subject matter).
20. In re Bilski, 545 F.3d 943, 959-60 (Fed. Cir. 2008) (disavowing the "useful, concrete, and tangible" test and replacing it with the "machine-or-transformation" test).
21. with Bilski v. Kappos, 130 S. Ct. 3218, 3226 (2010) (stating that the "machine-or-transformation" test is not the sole indicium of patentability and refusing to categorically exclude software patents or business methods).
22. Brief of Intellectual Property Law Professors as Amici Curiae in Support of Petitioner at 10-11, KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398 (2007) (No. 04-1350) (arguing that the Federal Circuit has made obviousness too difficult to prove).
23. Rebecca Eisenberg, Obvious to Whom? Evaluating Inventions from the Perspective of PHOSITA, 19 BERKELEY TECH. L.J. 885, 889-902 (2004) (documenting diminished consideration of PHOSITAs in the Federal Circuit and proposing a new approach).
24. KSR Int'l, 550 U.S. at 418-19 (disapproving of the rigid use of the "teachingsuggestionmotivation" or "TSM" test to determine nonobviousness).
25. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 393-94 (2006) (announcing that injunctions should not be automatically granted in patent cases, but rather, that courts should grant injunctions only upon careful consideration of an equitable "four-factor" test).
26. Transcript of Oral Argument, Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238 (2011) (No. 10-290) (considering the appropriateness of the "clear and convincing" evidentiary standard for proving patent invalidity).
27. Mark A. Lemley & Bhaven Sampat, Essay, Is the Patent Office a Rubber Stamp?, 58 EMORY L.J. 181, 201 (2008) (stating that the USPTO "grants patents to more than 70% of those who apply").
28. Cecil D. Quillen, Jr. & Ogden H. Webster, Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office-One More Time, 18 FED. CIR. B.J. 379, 394-96 & tbls. 4-5 (2009) (reporting an overall rise in the USPTO's grant rate since the founding of the Federal Circuit that, when adjusted to account for Refiled Continuing Applications, ranged between 77% and 92% during the years 1995-2007 and ranged between 67% and 78% during the year 2008).
29. Cecil D. Quillen, Jr., Ogden H. Webster & Richard Eichmann, Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office-Extended, 12 FED. CIR. B.J. 35, 38 (2002) (discussing different methods of estimating grant rate and estimating adjusted grant rate in which patents were granted on both parent and continuing applications at 85%).
30. BURK & LEMLEY, supra note 4, at 3 ("The patent system is in crisis.").
31. Jonathan S. Masur, Costly Screens and Patent Examination, 2 J. LEGAL ANALYSIS 687, 727-28 (2010) (proposing the argument that higher prices will work to filter less valuable patents).
32. John H. Barton, 2on-Obviousness, 43 IDEA 475, 492-93 (2003) (suggesting stricter nonobviousness standards in some industries).
33. Nancy T. Gallini, The Economics of Patents: Lessons from Recent U.S. Patent Reform, J. ECON. PERSP., Spring 2002, at 131, 147-48 (citing negative consequences of weak review standards).
34. Microsoft Corp. v. i4i Ltd. P'ship, 131 S. Ct. 2238 (2011) (hearing arguments on this issue).
35. Mark D. Janis, Reforming Patent Validity Litigation: The "Dubious Preponderance," 19 BERKELEY TECH. L.J. 923 (2004) (doubting that the presumption of validity should be altered).
36. Two forms of post-grant reexamination procedures are available in the United States: (1) ex parte reexaminations, in which third-party challengers do not participate, 35 U.S.C. §§ 302-307 (2006), and (2) inter partes reexamination, in which they do.
37. id. §§ 311-318. The types of evidence that can be used in these procedures are limited and the requirements for instituting post-grant challenges are strict.
38. id. § 312 (requiring that challengers offer prior art that presents "a substantial new question of patentability"). Some commentators have suggested that more meaningful review could be provided though, inter alia, allowing post-grant challenges to be based on novelty, nonobviousness, written description, enablement, and utility.
39. NRC, 21ST CENTURY, supra note 4, at 101.
40. The America Invents Act fortifies these provisions. Leahy-Smith America Invents Act, Pub. L. No. 112-29, 125 Stat. 284 (2011) (to be codified in scattered sections of 35 U.S.C.).
41. Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 VA. L. REV. 1575, 1662 (2003).
42. Ayres & Parchomovsky, supra note 7, at 881-93 (proposing a system of tradable patent rights and explaining how such a system might work).
43. Gideon Parchomovsky & Michael Mattioli, Partial Patents, 111 COLUM. L. REV. 207 (2011) (introducing two new types of patent rights dubbed "quasi-patents" and "semi-patents" that, if incorporated into the legal system, would expand the menu of intellectual property protections available to investors beyond the current binary one-size-fits-all system).
44. Barnett, supra note 1, at 412 (positing that, under certain conditions, "[t]he market will tend to adjust excessive allocations of intellectual property entitlements in order to maximize the cumulative stream of innovation gains net of transaction costs").
45. Id. at 389 (introducing the term "sharing regimes").
46. Robert P. Merges, A 2ew Dynamism in the Public Domain, 71 U. CHI. L. REV. 183, 184 (2004) ("[T]he increasing importance of the public domain may represent a partial self-correcting impulse in the IP system."). Creative Commons is a nonprofit organization that provides copyright licenses designed to allow and encourage intellectual property owners to retain some, but not all, rights to their work.
47. CREATIVE COMMONS, http://www.creativecommons.org/about (last visited Mar. 9, 2012) (describing how Creative Commons's "some rights reserved" model works).
48. Arti K. Rai & Rebecca S. Eisenberg, Bayh-Dole Reform and the Progress of Biomedicine, 66 LAW & CONTEMP. PROBS. 289, 297-98 (2003) ("A standard response to [the concern about an anticommons]-that market forces will motivate the emergence of patent pools and other institutions for bundling intellectual property rights, thereby reducing transaction costs and permitting the parties to realize gains from exchange-is an empirical claim that has not yet been borne out by the experience of the biomedical research community." (footnote omitted)).
49. ELINOR OSTROM, GOVERNING THE COMMONS: THE EVOLUTION OF INSTITUTIONS FOR COLLECTIVE ACTION 182-85 (1990) (analyzing research findings and concluding, inter alia, that the Tragedy of the Commons is sometimes useful as a generalized model but that it does not always accurately characterize the behavior of communities).
50. In a recent contribution to the Columbia Law Review, Gideon Parchomovsky and I discussed the rise of communal patent sharing and explored how "communities of innovation" could be finely tuned to better serve their constituents.
51. Parchomovsky & Mattioli, supra note 24, at 233-43.
52. See infra note 107.
53. This study stems from personal experience. In 2010, I served as outside pro bono patent counsel to Creative Commons when it designed a general purpose open patent license. Our license directly influenced the practices of The GreenXchange (GX)-a large patent-sharing initiative led by Nike, Yahoo!, and Best Buy. In the course of our work, our group carefully studied the successes and failures of similar communities of innovation, many of which have emerged in just the past few years. Using this experience as a seed, I embarked on a broader study of patent-sharing efforts worldwide. My goal was to evaluate the extent to which communal patent licensing is properly understood as a market "correction" that will facilitate cumulative innovation.
54. OSTROM, supra note 29, at 55-56 (explaining how in-depth case studies can be abstracted in order to examine and advance theoretical understandings of collective behavior).
55. For a description of the theoretical support, see infra Part I.B. For a discussion of the possible empirical support, see infra Part II.
56. Telephone Interview with Anonymous Source #5 (Oct. 7, 2010). Many of the individuals interviewed for this Article only commented on condition of anonymity. As a result, some of the interviews in this Article avoid references to specific individuals. This anecdotal comment made by Source #5 is supported by well-documented evidence.
57. John P. Walsh, Ashish Arora & Wesley M. Cohen, Effects of Research Tool Patents and Licensing on Biomedical Innovation, in PATENTS IN THE KNOWLEDGE-BASED ECONOMY 285, 305-07 (Wesley M. Cohen & Stephen A. Merrill eds., 2003) (documenting the impact of patents on early-stage research and reporting that patents often go unlicensed at early stages).
58. John P. Walsh, Ashish Arora & Wesley M. Cohen, Working Through the Patent Problem, 299 SCI. 1021 (2003) (same).
59. Rebecca S. Eisenberg, 2oncompliance, 2onenforcement, 2onproblem? Rethinking the Anticommons in Biomedical Research, 45 HOUS. L. REV. 1059, 1063-66 (2008) (summarizing earlier studies).
60. id. at 1098 ("Within the academy, scientists generally ignore patents and rarely face patent enforcement.").
61. Telephone Interview with Anonymous Source #5, supra note 37.
62. Heller, supra note 10, at xiii.
63. BURK & LEMLEY, supra note 4, at 31.
64. Heller & Eisenberg, supra note 9.
65. This concept was introduced in an influential article in Science written by the ecologist Garrett Hardin in the late 1960s. Garrett Hardin, The Tragedy of the Commons, 162 SCI. 1243, 1244 (1968).
66. Peter Passell, One Answer to Overfishing: Privatize the Fisheries, N.Y. TIMES, May 11, 1995, at D2 (discussing the problem of overfishing as a prime example of the tragedy of the commons).
67. Heller & Eisenberg, supra note 9, at 699.
68. Michael A. Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 HARV. L. REV. 621 (1998) (utilizing the theory of the anticommons to explain the phenomenon of empty storefronts in Socialist countries where property rights are highly disaggregated).
69. William Carlos Spaht, Note, Overcoming Another Tragedy in 2ew Orleans: Rebuilding in the Wake of Kelo and Act 2o. 851, 60 VAND. L. REV. 1599, 1613-14 (2007).
70. Id. at 1614.
71. Id. at 1614-15.
72. A reference to Abraham Lincoln's famous "houses divided" speech, given in Springfield, Illinois on June 16, 1853.
73. THE COLLECTED WORKS OF ABRAHAM LINCOLN 461 (2008) ("A house divided against itself cannot stand."). Lincoln derived this phrase from a Biblical passage.
74. Mark 3:25 (King James) ("And if a house be divided against itself, that house cannot stand.").
75. Howard W. French, Homeowner Stares Down Wreckers, at Least for a While, N.Y. TIMES, Mar. 27, 2007, at A4 (reporting on a homeowner who had attracted media attention for holding out against land developers, despite significant pressure from private stakeholders and the Chinese government itself).
76. Richard McGregor & Sun Yu, China's '2ail House' Floors Developers, FT.COM (Mar. 27, 2007 3:00 AM), http://www.ft.com/cms/s/0/f1c5bc28-dbff-11db-9233-000b5df10621.html (reporting that the owner of the nail house demanded a price from developers that exceeded local market rates).
77. Homeowner Stands Down, N.Y. TIMES, Apr. 3, 2007, at A3, available at http://query.nytimes.com/gst/fullpage.html?res=9A04EFDC1F30F930A35757C0A9619C8B63 (reporting that the same property owner eventually reached an agreement with land developers).
78. French, supra note 52.
79. McGregor & Yun, supra note 52.
80. Robert P. Merges, Institutions for Intellectual Property Transactions: The Case of Patent Pools, in EXPANDING THE BOUNDARIES OF INTELLECTUAL PROPERTY 123, 124 (Rochelle Cooper Dreyfuss, Diane Leenheer Zimmerman & Harry First eds., 2001) ("A patent, for example, was conceived as a property right over a single, coherent product occupying a distinct economic market.").
81. Oren Bar-Gill & Gideon Parchomovsky, The Value of Giving Away Secrets, 89 VA. L. REV. 1857, 1868 (2003) ("Cumulative innovation is the hallmark of high-tech industries such as computer software, semiconductors, molecular biology, and pharmacology." (footnotes omitted)).
82. Heller & Eisenberg, supra note 9, at 699 ("A proliferation of patents on individual fragments held by different owners seems inevitably to require costly future transactions to bundle licenses together before a firm can have an effective right to develop [future commercial products].").
83. BURK & LEMLEY, supra note 4, at 76-77 (discussing the horizontal-vertical divide).
84. Yochai Benkler, Coase's Penguin, or, Linux and The Nature of the Firm, 112 YALE L.J. 369, 372 (2002) (discussing transaction costs).
85. R. H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1, 15 (1960).
86. Rai & Eisenberg, supra note 28, at 297 ("Transaction costs mount quickly when the basic research discoveries necessary for subsequent work are owned not by one entity, but by a number of different entities.").
87. AUGUSTIN COURNOT, RESEARCHES INTO THE MATHEMATICAL PRINCIPLES OF THE THEORY OF WEALTH 103-04 (Nathaniel T. Bacon trans., Augustus. M. Kelley 2d ed. 1971) (1838) (noting "the composite commodity will always be made more expensive, by reason of separation of interests than by reason of the fusion of monopolies.... [T]he more there are of articles thus related, the higher the price determined by the division of monopolies will be, than that which would result from the fusion or association of the monopolists.").
88. BURK & LEMLEY, supra note 4, at 76 (discussing Augustin Cournot's Theory of Complements).
89. BURK & LEMLEY, supra note 4, at 76 ("[T]he price of the integrated product will be inefficiently high-and output inefficiently low ...."). This problem is distinct from, and potentially more harmful than, the static efficiency costs of underproduction and supracompetitive pricing that are part and parcel of any patent regime.
90. id. at 76-77.
91. Thomas F. Cotter, Patent Holdup, Patent Remedies, and Antitrust Responses, 34 J. CORP. L. 1151, 1160 (2009) (describing the holdup or holdout phenomenon in economic terms).
92. Carl Shapiro, 2avigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting, in 1 INNOVATION POLICY AND THE ECONOMY 119, 124-26 (Adam B. Jaffe et al. eds., 2001) (discussing the patent holdup problem).
93. BURK & LEMLEY, supra note 4, at 76 (noting that holdouts can stifle product research and development when multiple patent holders are involved).
94. Chester J. Shiu, Of Mice and Men: Why an Anticommons Has 2ot Emerged in the Biotechnology Realm, 17 TEX. INTELL. PROP. L.J. 413, 450-54 (2009) (denying the existence of an anticommons in the biotechnology industry based on empirical study).
95. Stephen M. Maurer, Inside the Anticommons: Academic Scientists' Struggle to Build a Commercially Self-Supporting Human Mutations Database, 1999-2001, 35 RES. POL'Y 839 (2006).
96. Id. at 847-48.
97. Rebecca S. Eisenberg, Bargaining Over the Transfer of Proprietary Research Tools: Is This Market Failing or Emerging?, in EXPANDING THE BOUNDARIES OF INTELLECTUAL PROPERTY, supra note 55, at 223, 223-50 (discussing factors that led to bargaining failures in the realm of biomedical research and concluding that institutions to bring down transaction costs do not always arise).
98. JANET HOPE, BIOBAZAAR: THE OPEN SOURCE REVOLUTION AND BIOTECHNOLOGY 28-67 (2008) (reporting on patent bargaining failures in the biotechnology industry).
99. Id. at 66 (internal quotation marks omitted).
100. Bayh-Dole Act, Pub. L. No. 96-517, §§ 200-211, 94 Stat. 3015, 3019-28 (1980) (codified as amended at 35 U.S.C. §§ 200-11 (1994)).
101. Rai & Eisenberg, supra note 28, at 291 (noting that the Bayh-Dole Act likely contributed to significant increases in research patenting that may hinder scientific progress).
102. supra note 4 and accompanying text (listing several contemporary books and articles on this topic).
103. Masur, supra note 17, at 688-91 (discussing the application of a costly screening model to the procedures used by the USPTO).
104. JAFFE & LERNER, supra note 4, at 184 (discussing post-grant reexaminations).
105. Janis, supra note 20, at 923 (calling into question arguments for altering this presumption).
106. Martin J. Adelman, Property Rights Theory and Patent-Antitrust: The Role of Compulsory Licensing, 52 N.Y.U. L. REV. 977, 1001-02 (1977) (explaining a compulsory licensing system).
107. Cole M. Fauver, Comment, Compulsory Patent Licensing in the United States: An Idea Whose Time Has Come, 8 NW. J. INT'L L. & BUS. 666, 668-74, 683-85 (1988) (same).
108. John F. Duffy, The Marginal Cost Controversy in Intellectual Property, 71 U. CHI. L. REV. 37 (2004) (proposing and analyzing a scheme of intellectual property subsidies).
109. Industrial organization is a branch of economics dedicated to the study of the structure of markets and the strategies of firms that operate within markets.
110. Note, Dissent, Corporate Cartels, and the Commercial Speech Doctrine, 120 HARV. L. REV. 1892, 1902 (2007) (defining industrial organization).
111. Shapiro, supra note 65, at 123, 127-29 (viewing patent pools and cross licenses through the lens of the "complements" problem Cournot identified).
112. Id. at 123-24. Importantly, Shapiro recognized that the excessive balkanization of patent rights threatened not only the production of existing products, but also the research and development of future innovations.
113. Id. at 124 ("[T]he prospect of paying such royalties necessarily reduces the return to new product design and development, and thus can easily be a drag on innovation and commercialization of new technologies.").
114. Id. at 123, 126-27.
115. Bar-Gill & Parchomovsky, supra note 56 (examining the trend toward unprotected publishing of patentable material).
116. Id. at 1860, 1872 (discussing this strategy).
117. Robert P. Merges, Contracting into Liability Rules: Intellectual Property Rights and Collective Rights Organizations, 84 CALIF. L. REV. 1293, 1340-58 (1996).
118. Id. at 1391-92 ("Where firms are involved in such transactions repeatedly, institutions for regularized IPR exchange tend to emerge.").
119. Merges, supra note 27, at 186.
120. Id. at 188-94 (discussing these two examples).
121. Id. at 186.
122. Id. at 203 (expressing qualified optimism).
123. Robert P. Merges & Richard R. Nelson, On the Complex Economics of Patent Scope, 90 COLUM. L. REV. 839, 896 (1990) (recognizing that "[t]here is ... no reason to assume that when blockages arise industries will always turn to the deadlockbreaking solutions we have seen, patent pooling and cross licensing" and noting that government pressure has been an impetus in at least one case of patent pooling).
124. Barnett, supra note 1, at 442-43 (discussing investment in "transactional arrangements" designed to lower patent protections and increase cumulative innovation).
125. Id. at 432 (emphasis omitted).
126. Id. at 424.
127. Id. at 434-37.
128. Id. at 431.
129. Ostrom, supra note 29 (discussing natural resource sharing).
130. Charlotte Hess & Elinor Ostrom, Ideas, Artifacts, and Facilities: Information as a Common-Pool Resource, 66 LAW & CONTEMP. PROBS. 111 (2003) (analyzing scholarly information as a common pool resource).
131. Heller, supra note 47, at 625-26, 667 (referring to the paucity of commentary on the symmetrical relationship between commons and anticommons property).
132. Sven Vanneste, Alain Van Hiel, Francesco Parisi & Ben Depoorter, From "Tragedy" to "Disaster": Welfare Effects of Commons and Anticommons Dilemmas, 26 INT'L REV. L. & ECON. 104 (2006).
133. Id. at 118.
134. Rai & Eisenberg, supra note 28 (stating that, in the biomedical research community, the Market Correction Hypothesis "is an empirical claim that has not yet been borne out").
135. The term "patent pool," as it is commonly used by legal scholars, describes a set of patent licenses that facilitate production or assembly of an end-product that has already been invented.
136. Merges, supra note 90, at 1340.
137. Shapiro, supra note 65, at 127. The first widely documented patent pool in the United States arose in the sewing machine industry in 1856
138. Merges, supra note 90, at 1342. In the late twentieth century, patent pools arose to facilitate the assembly of digital standards, including MPEG video.
139. Letter from Joel I. Klein, Acting Assistant Attorney Gen., DOJ, to Gerrard R. Beeney, Esquire, Sullivan & Cromwell (June 26, 1997) [hereinafter MPEG-2 Business Review Letter], available at http://www.usdoj.gov/atr/public/busreview/215742.pdf.
140. For an analytical discussion of the antitrust implications of patent pools, see Josh Lerner & Jean Tirole, Efficient Patent Pools, 94 AM. ECON. REV. 691 (2004).
141. Economist Adam Smith coined the term "invisible hand" as a metaphor to describe how atomistic, self-interested actors can unintentionally achieve efficiency in the aggregate.
142. ADAM SMITH, THE THEORY OF MORAL SENTIMENTS 215-16 (Knud Haakonssen ed., 2002) (1759) ("They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species." (footnote omitted)). The Market Correction Hypothesis can be distinguished from Smith's "invisible hand" because it posits the conscious and deliberate pursuit of shared goals by small groups of private actors.
143. CONG. REC. 14,436 (daily ed. July 14, 2006) (statement of Sen. William H. Frist) (discussing why single-pill fixed-dose treatments will have a "profound" impact on HIV-AIDS patients).
144. ALL-PARTY PARLIAMENTARY GRP. ON AIDS, THE TREATMENT TIMEBOMB 25 (2009) [hereinafter TREATMENT TIMEBOMB], available at http://www.thebody.com/content/art52841.html ("There is an urgent need for new formulations of HIV medicines for children and for drugs that are easier to use such as small tablets.").
145. Amir Attaran, AIDS Medicine Patents Cause a Problem, FIN. TIMES (London), June 21, 2004, at 10 (explaining that "[u]nreliable supply chains in Africa make it" difficult for patients to receive regular, unbroken, and simultaneous doses of the three or more necessary medicines, and that combining the drugs into a single pill could solve this problem).
146. Jong-wook, Former Dir.-Gen., World Health Org., Speech at Press Conference on AIDS Treatment Global Health Emergency (Sept. 22, 2003), available at http://www.who.int/dg/lee/speeches/2003/AIDS_treatment_pressconference/en ("Our failure to deliver antiretroviral treatment for AIDS to the millions of people who need it is a global health emergency.").
147. supra note 59 and accompanying text (explaining horizontal and vertical patent gridlock).
148. While this problem affects developed countries as well, unreliable supply chains make it even more difficult to aggregate necessary drugs in Africa.
149. See, e.g., Attaran, supra note 109 (explaining how the failure of pharmaceutical patent holders to cooperate has impeded the production of fixed-dose pills).
150. The threat is so great that, in 2001, thirty-nine drug firms (and one individual) instituted a legal action to stop the government of South Africa from passing a law that would allow imports of generic HIV-AIDS drugs.
151. Pharm. Mfrs.' Ass'n of S. Afr. v. Mandela, High Court of South Africa, Transvaal Provincial Division, No. 4183/98 (2001), available at http://www.tac.org.za/Documents/MTCTPrevention/pharmace.txt. Only in the face of immense public pressure did the companies withdraw the suit in 2001.
152. Ben Hirschler, Glaxo Gives Up Rights to AIDS Drugs in South Africa, REUTERS NEWMEDIA (Oct. 6, 2001), http://www.aegis.com/news/re/2001/RE011009.html ("39 pharmaceutical companies backed down in a landmark court battle with the South African government.").
153. In the United States and Europe, there is a nearly 0% rate of HIV infections among children under age fifteen. UNAIDS, UNICEF, A CALL TO ACTION: CHILDREN: THE MISSING FACE OF AIDS 6 (2005).
154. TREATMENT TIMEBOMB, supra note 109, at 25 ("There is a lack of investment into medicines that are appropriate for children, because of the very limited commercial, developed country market for them.").
155. Brenda Waning et al., The Global Pediatric Antiretroviral Market: Analyses of Product Availability and Utilization Reveal Challenges for Development of Pediatric Formulations and HIV/AIDS Treatment in Children, 10 BMC PEDIATRICS 2010 74, 75 (2010) (highlighting the nearelimination of HIV in children from the United States and Europe and the corresponding minimal demand for pediatric ARVs in these markets as a strong disincentive to the development).
156. Children Being 2eglected in AIDS Fight, Says MSF, MÉDECINS SANS FRONTIÈRES/DOCTORS WITHOUT BORDERS (July 13, 2004), http://www.doctorswithoutborders.org/news/article.cfm?id=712&cat=field-news.
157. Press Release, Médecins Sans Frontières/Doctors Without Borders, Drug Companies Leave Children with AIDS to Fend for Themselves (Nov. 28, 2005), available at http://www.doctorswithoutborders.org/press/release.cfm?id=1628.
158. Cf. World Health Assembly, WHO, Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property, WHA61.21, annex 14 (May 24, 2008), available at http://apps.who.int/gb/ebwha/pdf_files/A61/A61_R21-en.pdf (recommending examining "the feasibility of voluntary patent pools of upstream and downstream technologies to promote innovation of and access to health products and medical devices").
159. TREATMENT TIMEBOMB, supra note 109, at 28 (discussing patent sharing as a vehicle for facilitating the development of drugs that do not yet exist).
160. The Medicines Patent Pool Initiative, UNITAID (Mar. 2009), http://www.unitaid.eu/images/projects/PATENT_POOL_ENGLISH_15_may_REVISED.pdf (describing how the UNITAID pool would work).
161. Donald G. McNeil, Jr., Effort for Lower Drug Prices Would Focus on Gaining Patents, N.Y. TIMES, July 8, 2008, at F6 ("[UNITAID] is endorsing the creation of a panel of experts to explore the feasibility of a 'patent pool.'").
162. Early Day Motion 1553-HIV Treatments and Children, PARLIAMENT.UK (Jan. 6, 2009), http://www.parliament.uk/edm/2008-09/1553. 120 25 Mar. 2009,
163. PARL. DEB., H.C. (6th Ser.) (2009) 289 (U.K.), available at http://www.publications.parliament.uk/pa/cm200809/cmhansrd/cm090325/debtext/90325-0001.htm#column_289.
164. Drug Firms 'Must Pool Patents,' BBC NEWS (July 15, 2009, 15:30 GMT), http://news.bbc.co.uk/2/hi/health/8150457.stm (internal quotation marks omitted).
165. Some drug companies have made positive statements to the press. For example, pharmaceutical company Gilead Sciences stated: "We believe if structured appropriately, UNITAID's patent pool can play a critical role in expanding access to antiretroviral treatments for patients around the world."
166. Andrew Jack, HIV 'Pool' Adds to Pressure on Drug Groups, FIN. TIMES (London), Dec. 16, 2009, at 16 (internal quotation marks omitted), available at http://www.ft.com/intl/cms/s/0/561186aa-e998-11de-9f1f-00144feab49a.html#axzz1cgYKXB7c.
167. TREATMENT TIMEBOMB, supra note 109, at 28-29 (noting GSK's refusal in the face of "strong political pressure").
168. Philippe Douste-Blazy & Jorge Bermudez, Correspondence, GSK: Please Extend Patent Pool to AIDS Drugs, 373 LANCET 1339 (2009) ("We invite ... GSK to contribute to the UNITAID medicines patent pool initiative and really join the sea change in the provision of medicines to people in developing countries.").
169. Kate Kelland, Some Drug Firms Keen, Others Reluctant on AIDS Pool, REUTERS (July 21, 2010, 2:28 PM), http://www.reuters.com/article/2010/07/21/us-aids-drugspool-idUSTRE66K2ZP20100721.
170. Kelland, supra note 124 (reporting on ViiV Healthcare's statements opposing the Medicines Patent Pool).
171. E. Richard Gold & Jean-Frédéric Morin, Correspondence, The Missing Ingredient in Medicine Patent Pools, 374 LANCET 1329, 1330 (2009).
172. cf. Ellen 't Hoen, Correspondence, Pharmaceutical Companies and the U2ITAID Patent Pool, 375 LANCET 30 (2010) (purporting to correct some of the statements made by Richard Gold and Jean-Frédéric Morin).
173. In an editorial, The Lancet urged MPs to offer more vocal support for the idea of aggregating AIDS-related patents. Editorial, Political Activism 2eeded for Patent Pools for HIV Drugs, 374 LANCET 266 (2009).
174. U2ITAID Approves Patent Pool, UNITAID (Dec. 14, 2009), http://www.unitaid.eu/en/resources/news/237-unitaid-approves-patent-pool.html.
175. Memorandum of Understanding between the World Health Org. and the Medicines Patent Pool Found. (Sept. 17, 2010), available at http://www.medicinespatentpool.org/content/download/208/1199/version/3/file/MemorandumOfUnderstanding_MedicinesPatentPoolFoundation_14Sept2010.pdf (detailing the World Health Organization's commitment to a five-year funding obligation).
176. The Medicines Patent Pool: Stimulating Innovation, Improving Access, MEDICINES PATENT POOL (Jan. 2011), http://www.medicinespatentpool.org/content/download/311/2031/version/1/file/FACTSHEET+FINAL+EB.pdf (stating that the MPP aims to lower the prices of existing drugs and foster "the development of better-adapted formulations for developing country contexts, such as medicines for children" and fixed-dose formulations).
177. Medicines Patent Pool in 2egotiations with Key HIV Medicines Patent Holders, MEDICINES PATENT POOL (July 2011), http://www.medicinespatentpool.org/LICENSING/Company-Engagement ("On 1 December 2010, the Medicines Patent Pool sent out letters to key patent holders inviting them to formally begin negotiations to license their HIV/medicines patents to the Pool ....").
178. Telephone Interview with Anonymous Source #9 (Feb. 22, 2011).
179. Donald G. McNeil, Jr., 2ational Institutes of Health Licenses Its Patent on a 2ew Drug for AIDS, N.Y. TIMES, Oct. 5, 2010, at D6.
180. MEDS. PATENT POOL FOUND., Public Health Service 2on-Exclusive Patent License Agreement (Sept. 20, 2010), http://www.medicinespatentpool.org/content/download/214/1227/version/1/file/MPPF+Patent+License+Full+Executed+%28Sept+2010%29-NS.pdf (reflecting that the NIH license is royalty-free).
181. Asher Mullard, Straight Talk with... Ellen 't Hoen, 16 NATURE MED. 1351, 1351 (2010), available at http://www.nature.com/nm/journal/v16/n12/pdf/nm1210-1351.pdf.
182. Current Licenses, MEDS. PATENT POOL, http://www.medicinespatentpool.org/LICENSING/Current-Licences (last visited Mar. 9, 2012).
183. Mullard, supra note 133 (discussing the need to get Johnson & Johnson on board, as they possess patents necessary to manufacture the drug).
184. Press Release, Medicines Patent Pool, Medicines Patent Pool Signs License Agreement with Gilead to Increase Access to HIV/AIDS Medicines (July 12, 2011), available at http://www.medicinespatentpool.org/content/download/484/2863/version/1/file/FINAL+Press+Release+-+Medicines+Patent+Pool+First+Pharma+Licence%5B1%5D.pdf.
185. internal quotation mark omitted
186. Hillary Chen, Medicines Patent Pool Agreement with Gilead a Key Milestone, OFF. SCI. & TECH. POL'Y BLOG (July 12, 2011, 11:12 PM), http://www.whitehouse.gov/blog/2011/07/12/medicinespatent-pool-agreement-gilead-key-milestone.
187. Press Release, BIO Ventures for Global Health, BIO Ventures for Global Health Chosen to Administer the GSK and Alnylam Intellectual Property Pool (Jan. 20, 2010), available at http://ntdpool.org/news/releases/bio-ventures-global-health-chosen-administer-gsk-a.
188. The full list is "tuberculosis, malaria, blinding trachoma, buruli ulcer, cholera, dengue/dengue haemorrhagic fever, racunculiasis, fascioliasis, human African trypanosomiasis, leishmaniasis, leprosy, lymphatic filariasis, onchocerciasis, schistosomiasis, soil transmitted helminthiasis and yaw."
189. Telephone Interview with Anonymous Source #7 (Feb. 7, 2011).
190. Audrey Huang & Chris Weber, The Health of 2ations: Open-Source Research and the Economics of Life and Death in the Developing World, 7 BERKELEY SCI. REV., Fall 2004, at 45, 47, available at http://sciencereview.berkeley.edu/articles/issue7/disease.pdf ("Of the 1,393 new drugs approved in the United States between 1975 and 1999, only 13 treat tropical diseases.").
191. Telephone Interview with Anonymous Source #4 (Oct. 7, 2010).
192. Telephone Interview with Anonymous Source #5 (Oct. 7, 2010).
193. Donald G. McNeil, Jr., Ally for the Poor in an Unlikely Corner, N.Y. TIMES, Feb. 9, 2010, at D1 (internal quotation marks omitted).
194. FDA Amendments Act of 2007, Pub. L. No. 110-85, § 1102, 121 Stat. 823, 972-74 (codified at 21 U.S.C. § 360n (2006)). Significantly, the USPTO recently sought public comments on a similar plan that would extend fast-track reexamination vouchers for companies that pursued "technologies and licensing behavior that addresses humanitarian needs." Request for Comments on Incentivizing Humanitarian Technologies and Licensing Through the Intellectual Property System, 75 Fed. Reg. 57,261 (filed Sept. 17, 2010).
195. § 1102 (discussing priority review and transferability of the vouchers).
196. Telephone Interview with Anonymous Source #4 (Oct. 7, 2010).
197. Telephone Interview with Anonymous Source #7 (Feb. 7, 2011).
198. How the Pool Works: User FAQs, POOL FOR OPEN INNOVATION, http://www.ntdpool.org/pages/for-users/faqs (last visited Mar. 9, 2012).
199. discussing eligibility for licensing
200. GARY ZWEIGER, TRANSDUCING THE GENOME 177-89 (2001) (discussing the formation of the SNP Consortium and the 1990s-era of SNP scientific research more generally).
201. See id. at 177, 186.
202. See id. at 177-78 (noting that private pharmaceutical companies were concerned about the propertization of SNPs).
203. Fiona Murray & Scott Stern, Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-Commons Hypothesis 25, 27 (Nat'l Bureau of Econ. Research, Working Paper No. 11465, 2005) (finding detrimental impact of patents on scientific publishing).
204. NHGRI Policy Regarding Intellectual Property of Human Genomic Sequence, NAT'L HUM. GENOME RES. INST. (Apr. 9, 1996), http://www.genome.gov/10000926.
205. Eliot Marshall, 'Playing Chicken' Over Gene Markers, 278 SCI. 2046, 2047 (1997) (noting that academics were "worried that private companies wielding new technologies for scanning the genome [would] snap up the SNPs ... and patent them").
206. Rai & Eisenberg, supra note 28, at 307.
207. ZWEIGER, supra note 152, at 177.
208. Eliot Marshall, Drug Firms to Create Public Database of Genetic Mutations, 284 SCI. 406, 406 (1999) [hereinafter Marshall, Drug Firms].
209. Marshall, supra note 156.
210. ZWEIGER, supra note 152, at 178 (internal quotation marks omitted).
211. noting that the project's founder had solicited $30 million from a consortium of eighteen NIH agencies.
212. Id. at 177-78 (indicating that both projects aimed to prevent researchers from being "held hostage to commercial databases" (internal quotation marks omitted)).
213. Id. at 177.
214. Marshall, Drug Firms, supra note 159 (internal quotation marks omitted).
215. In this way, the SNP Consortium was different from a traditional patent pool or patent commons-rather than licensing patents, the group defeated them.
216. Rebecca S. Eisenberg, The Promise and Perils of Strategic Publication to Create Prior Art: A Response to Professor Parchomovsky, 98 MICH. L. REV. 2358, 2365-69 (2000) (discussing the SNP Consortium's use of SIRs, including the organization's novel strategy of delaying release of SNPs as long as possible to create uncertainty for those seeking to propertize related data).
217. Merges, supra note 27, at 194-95.
218. Jorge L. Contreras, Bermuda's Legacy: Policy, Patents, and the Design of the Genome Commons, 12 MINN. J. L. SCI. & TECH. 61, 97 (2011).
219. Thomas A. Hemphill, Preemptive Patenting, Human Geonomics, and the US Biotechnology Sector: Balancing Intellectual Property Rights with Societal Welfare, 25 TECH. SOC'Y 337, 345 (2003).
220. J.H. Reichman & Paul F. Uhlir, A Contractually Reconstructed Research Commons for Scientific Data in a Highly Protectionist Intellectual Property Environment, LAW & CONTEMP. PROBS., Winter-Spring 2003, at 315, 458.
221. Marshall, Drug Firms, supra note 159 (reporting the initial goal).
222. Merges, supra note 27, at 190 (reporting the ultimate figures).
223. dbS2P Data Origins, NAT'L CENTER. FOR BIOTECHNOLOGY INFO., http://www.ncbi.nlm.nih.gov/books/NBK9691 (last visited Mar. 9, 2012) (reporting that the SNP Consortium's database is "no longer growing," and that the dbSNP "should contain all of their SNPs").
224. S.T. Sherry et al., dbS2P: The 2CBI Database of Genetic Variation, 29 NUCLEIC ACIDS RES. 308, 308-11 (2001).
225. One individual directly involved with the SNP Consortium who was interviewed for this Article reported that the project was not patterned after the government's preexisting initiative. Rather, the source opined that the SNP Consortium was private industry's response to design shortcomings in the government's SNP database. Telephone Interview with Anonymous Source #9 (July 11, 2011). This viewpoint contrasts somewhat with the statements that the director of the governmental effort made to Science magazine that the SNP Consortium was "nicely complementary." See supra note 164 and accompanying text. Both sources agree, however, that the SNP Consortium was motivated by the government's earlier efforts.
226. George Bittlingmayer, Property Rights, Progress, and the Aircraft Patent Agreement, 31 J.L. & ECON. 227, 230-31 (1988).
227. Id. at 231-32 (explaining that the Wrights sued Curtiss in 1909 and eventually won the suit in the summer of 1914).
228. The suit began when the Wrights read an article in Scientific American describing Curtiss' flight of an experimental aircraft he called " Bug. CECIL R. ROSEBERRY, GLENN CURTISS 115 (1991). On July 20, Orville Wright wrote Curtiss a letter explaining that June Bug's design likely infringed their U.S. Patent No. 821,393.
229. Bittlingmayer, supra note 173, at 232 ("[S]ome firms were reluctant to take contracts because of the threat of patent infringement suits.").
230. Merges & Nelson, supra note 95, at 890-91 (noting the corrosive impact of the Wright patent on innovation).
231. Nat'l Advisory Comm. on Aeronautics, THIRD ANNUAL REPORT OF THE NATIONAL ADVISORY COMMITTEE ON AERONAUTICS (1918), in 8 AERIAL AGE WKLY. 128, 129 (Sept. 30, 1918) ("In January, 1917, the War and Navy Departments called the attention of the Advisory Committee to the prohibitive prices of aircraft charged by the various aircraft manufacturers, attributing these prices to the extra item of royalty added by each firm in anticipation of infringement suits by owners of alleged basic aeronautic patents ....").
232. discussing the government's crucial role in identifying the aircraft patent problem and a government advisory committee's suggestion of the cross-licensing association that became the MAA.
233. End Patent Wars of Aircraft Makers, N.Y. TIMES, Aug. 7, 1917, at 5 (discussing the history and operation of the Manufacturers' Aircraft Association).
234. Bittlingmayer, supra note 173, at 232-33.
235. A copy of the original agreement was reproduced in A Bill Providing for the Recording of Patent Pooling Agreements and Contracts with the Commissioner of Patents: Hearing on H.R. 4523 Before the H. Comm. on Patents, 74th Cong. App. 3 at 3058-125 (1935) [hereinafter MAA License Agreement].
236. Id. at 3065.
237. Id. at 3078.
238. Aircraft Builders Deny Monopoly Aim, N.Y. TIMES, Aug. 12, 1917, at 11 (discussing criticisms of the MAA).
239. Manufacturers Aircraft Association, Inc., Organized, 3 AVIATION & AERONAUTICAL ENGINEERING 43, 43 (1917) ("When these negotiations were started the task of bringing all of the parties interested together seemed insurmountable, but actuated by patriotic impulses it was finally agreed ... that the [MAA agreement would] be completed.").
240. Interestingly, Leon Cammen, the Vice President of the Aeronautical Society of America, argued that the MAA would impede innovation and would "keep the airplane in its present state of imperfection." Aircraft Builders Deny Monopoly Aim, supra note 184. The topic of patent pooling as a cure for litigation is discussed in greater depth infra Part II.B.
241. Mfrs. Aircraft Ass'n. v. United States, 77 Ct. Cl. 481, 488-89 (1933) (recounting this history).
242. Mfrs. Aircraft Ass'n-Antitrust Laws, 31 Op. Att'y. Gen. 166 (1917).
243. Id. at 170-71.
244. Michael J. Madison, Brett M. Frischmann & Katherine J. Strandburg, Constructing Commons in the Cultural Environment, 95 CORNELL L. REV. 657, 660-61 (2010) ("Largely because of this functioning commons of patented inventions, airplanes were built, and the war was won.").
245. Bittlingmayer, supra note 173, at 234-35 (noting that the MAA received "numerous clean bills of health").
246. Plane Makers Hit by Antitrust Suit over Inventions, WALL ST. J., Mar. 30, 1972, at 3 (reporting on a Justice Department civil suit alleging antitrust violations).
247. United States v. Mfrs. Aircraft Ass'n, No. 72-Civ-1307, 1975 WL 814, at *4 (S.D.N.Y. Nov. 12, 1975) (ordering the termination of cross-licenses).
248. Airplane Makers Agree to Settle '72 Antitrust Suit, WALL ST. J., July 16, 1975, at 15 (discussing agreement to end the MAA).
249. As early as 1999, Robert Merges observed that some patent pools have only formed with the help of government assistance. Merges, supra note 55, at 145-46.
250. Other notable historical cases of government-inspired patent sharing exist. Following the First World War, the U.S. Navy encouraged the pooling of radio patents into what became the Radio Corporation of America (RCA).
251. Merges & Nelson, supra note 95, at 891-93 (discussing the formation of the RCA patent pool).
252. The open-source computing movement embraced a set of methods and philosophies about software development that focused on collaboration.
253. ERIC S. RAYMOND, THE CATHEDRAL & THE BAZAAR: MUSINGS ON LINUX AND OPEN SOURCE BY AN ACCIDENTAL REVOLUTIONARY (rev. ed. 2001) (extolling the benefits of the open-source software movement including its importance as a driver and facilitator of innovation). Most open-source licenses eschew (and in fact prohibit) any restrictions on use or redistribution based on the belief that the benefits of sharing one's innovations outweigh any costs.
254. Id. at 132-34.
255. Id. at 10-14 (discussing the rise of "microcomputers" during the 1980s).
256. SIVA VAIDHYANATHAN, COPYRIGHTS AND COPYWRONGS 154 (2001) (discussing programmer Richard Stallman's belief that "the rise of proprietary software systems [w]as a severe threat to freedom and creativity" and his contention that copyright law "impeded the development of the best possible software").
257. JONATHAN ZITTRAIN, THE FUTURE OF THE INTERNET-AND HOW TO STOP IT 77, 94, 189 (2008) (discussing the free software philosophy, the potential complications posed by intellectual property protections, and the possible solutions generated by "open source" software development).
258. Mark H. Webbink, Understanding Open Source Software, NEW S. WALES SOC'Y FOR COMPUTERS & L., https://www.nswscl.org.au/index.php?option=com_content&view=article&id=95:understanding-open-source-software&catid=23:march-2003-issue&Itemid=31 (last visited Mar. 9, 2012) (explaining how open-source licensing under the original GNU Public License works).
259. Benkler, supra note 60, at 371-74 & n.3 (discussing the power and potential of opensource software development).
260. State St. Bank & Trust Co. v. Signature Fin. Grp., Inc., 149 F.3d 1368, 1375 (Fed. Cir. 1998) (affirming the "useful, concrete, and tangible result" test for analyzing patentable subject matter and permitting software previously considered "too obvious" to be patented (quoting In re Alappat, 33 F.3d 1526, 1544 (Fed. Cir. 1994))).
261. BESSEN & MEURER, supra note 4, at 187, 201, 210-13 ("Unfortunately, the Federal Circuit has set software-specific precedents that essentially remove most restrictions on abstract claims in software.").
262. cf. Bilski v. Kappos, 130 S. Ct. 3218, 3226 (2010) (stating that "machine-or-transformation" test is not the sole indicum of patentability).
263. G2U General Public License, Version 1, FREE SOFTWARE FOUND. (Feb. 1989), http://www.gnu.org/licenses/gpl-1.0.html (containing no reference to patents).
264. Bruce Perens, Preparing for the Intellectual Property Offensive, LINUXWORLD (Nov. 11, 1998), http://web.archive.org/web/19990225093703/http://www.linuxworld.com/linuxworld/lw-1998-11/lw-11-thesource.html.
265. Christian H. Nadan, Open Source Licensing: Virus or Virtue?, 10 TEX. INTELL. PROP. L.J.349, 371-72 (2002) (internal quotation marks omitted).
266. Roger Parloff, Microsoft Takes On the Free World, FORTUNE, May 28, 2007, at 77 (discussing Microsoft's patent infringement claims).
267. Telephone Interview with Anonymous Source #2 (Oct. 7, 2010).
268. Frequently Asked Questions, OPEN INVENTION NETWORK, http://www.openinventionnetwork.com/press_faq.php (last visited Mar. 9, 2012).
269. Steve Lohr, Company to Start Offering Free Use of Patents It Holds, N.Y. TIMES, Nov. 10, 2005, at C8.
270. Telephone Interview with Anonymous Source #2 (Sept. 27, 2010). These founding members had different interests: IBM and Novell held many patents. Red Hat did not, so its reasons were mostly defensive. Sony and Philips, on the other hand, were shipping devices with Linux embedded.
271. Telephone Interview with Anonymous Source #2 (Oct. 7, 2010).
272. OI2 Community of Licensees, OPEN INVENTION NETWORK, http://www.openinventionnetwork.com/licensees.php (last visited Mar. 9, 2012).
273. Open Invention 2etwork Reports Increase in Licensing Program in First Quarter, WIRELESS NEWS, Apr. 18, 2010, available at Factiva, Doc. No. WLNW000020100430e64i0001h (reporting that OIN signed forty new licensees during this period).
274. Nick Wingfield, Group of Microsoft Rivals 2ears Patent Deal in Bid to Protect Linux, WALL ST. J., Sept. 8, 2009, at B1.
275. defining "patent trolls" as entities "that don't typically make products and exist primarily to earn money from lawsuits and settlements in patent cases" (internal quotation marks omitted).
276. BESSEN & MEURER, supra note 4, at 3, 159 (discussing patent trolls).
277. Readers should take note that Linux is not itself a collective effort to further innovation in the field of computer science by depropertizing the IP landscape. Rather, Linux is a freely available computer operating system designed to allow users to run software applications. Thus, the OIN's mission to protect Linux users and distributors from patent litigation is not inherently innovationenhancing.
278. License Agreement, OPEN INVENTION NETWORK, http://www.openinventionnetwork.com/pat_license_agreement.php (last visited Mar. 9, 2012) [hereinafter OI2 License Agreement].
279. Open Invention 2etwork-Patents, OPEN INVENTION NETWORK, http://www. openinventionnetwork.com/patents.php (last visited Mar. 9, 2012) (emphasis added).
280. Linux Definitions, OPEN INVENTION NETWORK, http://www.openinventionnetwork.com/pat_linuxdef.php (last visited Mar. 9, 2012) [hereinafter OI2 Linux Definitions].
281. Telephone Interview with Anonymous Source #2 (Oct. 7, 2010).
282. OI2 License Agreement, supra note 220.
283. OI2 Linux Definitions, supra note 224.
284. Telephone Interview with Anonymous Source #2 (Oct. 7, 2010).
285. Alessandro Nuvolari, Collective Invention During the British Industrial Revolution: The Case of the Cornish Pumping Engine, 28 CAMBRIDGE J. ECON. 347, 360 (2004) (including the Bessemer Association in a discussion of patent pools that furthered collective innovation).
286. THOMAS J. MISA, A NATION OF STEEL xx (1999) (stating that railroads were "the single most important consumer[s] of steel in the era before automobiles").
287. Peter B. Meyer, Episodes of Collective Invention 7 & fig.1, 8-10 (U.S. Dep't of Labor, Bureau of Labor Statistics, Working Paper No. 368, 2003), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=466880 (noting that imperfect knowledge of metallurgy in the United States during this period hindered production).
288. JOHN O'SULLIVAN & EDWARD F. KEUCHEL, AMERICAN ECONOMIC HISTORY 81 (1993) (stating that during this period, "[s]teel was expensive and available only in relatively small quantities").
289. SIR HENRY BESSEMER, SIR HENRY BESSEMER, F.R.S. 338 (1905).
290. Id. at 156-61 (giving a detailed firsthand description of this process and its genesis).
291. Id. at 337-39.
292. MISA, supra note 230, at 19-21.
293. Id. at 20 (internal quotation marks omitted).
294. Meyer, supra note 231, at 11 (discussing the licensing structure and membership requirements of the Bessemer Association).
295. Leonard H. Lynn, N. Mohan Reddy & John D. Aram, Linking Technology and Institutions: The Innovation Community Framework, 25 RES. POL'Y 91, 95 (1996) (explaining that, while the Bessemer Association lowered production costs of steelmaking, it likely impeded technological innovation).
296. Meyer, supra note 231 (noting the role of trade journals in disseminating technical information during this period).
297. TRANSACTIONS OF THE AMERICAN INSTITUTE OF MINING ENGINEERS (1871) (providing information about the creation and purpose of the journal).
298. Meyer, supra note 231, at 8-10 (detailing exemplary contributions made to the journal).
299. At the time, a similar periodical was also in wide circulation in England.
300. 1 J. IRON & STEEL INST. (1874).
301. Meyer, supra note 231, at 12 (alteration in original) (quoting PETER TEMIN, IRON AND STEEL IN NINETEENTH-CENTURY AMERICA 133 (1964)) (internal quotation marks omitted).
302. Meyer, supra note 231, at 11.
303. Lynn, Reddy & Aram, supra note 240, at 95 ("The U.S. industry lagged, however, when it came to product innovation, quality, and price to consumers. This too may have been an outcome of the strength of the Bessemer Association.").
304. MISA, supra note 230, at 20-21.
305. Thomas J. Misa, Controversy and Closure in Technological Change: Constructing "Steel," in SHAPING TECHNOLOGY/BUILDING SOCIETY 124 (Wiebe E. Bijker & John Law eds., 1999).
306. Meyer, supra note 231, at 12.
307. MISA, supra note 230, at 21 (discussing the deep and lasting anticompetitive impact of the Bessemer Association on steel pricing).
308. From an economic perspective, this conclusion is not surprising. In the words of Carl Shapiro, "As a matter of economic theory, there is no reason to expect [that] two parties' collective interests in settlement, and especially in the form of settlement they adopt, to coincide with the public interest, which includes consumer interests." Shapiro, supra note 65, at 142 (emphasis omitted).
309. B.E. Leveridge & A.J. Hartley, The Variscan Orogeny: The Development and Deformation of Devonian/Carboniferous Basins in SW England and South Wales, in THE GEOLOGY OF ENGLAND AND WALES 225 (Patrick J. Brenchley & Peter F. Rawson eds., 2d ed. 2006) (discussing the geologic history of the region).
310. 2ation on Film-Drill and Blast, BBC HOME, http://www.bbc.co.uk/cornwall/uncovered/stories/sept2003/nationonfilm.shtml (last updated Oct. 2003) (previewing the BBC television broadcast, 2ation on Film-Drill and Blast, that originally aired on October 7, 2003 (discussing the importance of Cornwall as an engineering center in the nineteenth century)).
311. This analogy has been made by a number of scholars. See, e.g., CHARLES LEADBEATER, WETHINK 54 (2d ed. 2009).
312. Nuvolari, supra note 229, at 351-59.
313. (discussing mine flooding).
314. Id. at 352-56.
315. See id. at 352 (stating that the Newcommen engine was invented in 1712 and that Watt's design, which replaced the Newcommen as the state of the art in mine-draining technology, came into use beginning in 1777).
316. (emphasizing the incredible value gained by Watt's addition of a separate condenser).
317. Id. at 352-53.
318. Id. at 353.
319. See id. at 353-55 (The case of the Cornish pumping engine seems to be indeed an 'exemplary' case of collective invention.").
320. Id. at 354.
321. Id. at 354, 357.
322. id. at 354.
323. John Taylor, Letter to the Editor, On the Duty of Steam-Engines in Cornwall, 7 PHIL. MAG. 424, 431 (1830).
324. Barnett, supra note 1, at 442.
325. Nuvolari, supra note 229, at 356-57 (discussing the "cost book system," a mode of profitsharing present in the Cornish mining economy, and noting that "[a]dventurers were usually not tied to the fortunes of a single mine but often acquired shares of different mine ventures").
326. Pilot Program for Green Technologies Including Greenhouse Gas Reduction, 74 Fed. Reg. 64,666 (Dec. 8, 2009).
327. Press Release, U.S. Patent & Trademark Office, The U.S. Commerce Department's Patent and Trademark Office (USPTO) Will Pilot a Program to Accelerate the Examination of Certain Green Technology Patent Applications (Dec. 7, 2009), available at http://www.uspto.gov/news/pr/2009/09_33.jsp.
328. U.N. Framework Convention on Climate Change, Ad Hoc Working Group on Long-Term Coop. Action Under the Convention, Bonn, F.R.G., June 1-12, 2009, Negotiating Text, ¶¶ 187-89, U.N. Doc. FCCC/AWGLCA/2009/8 (May 19, 2009), available at http://unfccc.int/resource/docs/2009/awglca6/eng/08.pdf (encouraging the development of "climate-friendly technologies" by proposing the removal of intellectual property "barriers to development and [the] transfer of technologies from developed to developing countr[ies]" or the exemption "from patent protection of climate-related technologies" for the least-developed countries).
329. Lisa Larrimore Ouellette, Comment, Addressing the Green Patent Global Deadlock Through Bayh-Dole Reform, 119 YALE L.J. 1727, 1727 (2010) ("During climate treaty negotiations, developing countries like China have argued that patents limit their access to green technologies. Based on these submissions, the May 2009 United Nations climate treaty negotiating text contained proposals that weaken IP rights for green technologies." (footnote omitted)).
330. H.R. REP. NO. 111-143, at 36 (2009).
331. H.R. amend. 187 to H.R. 2410, H.R. REP. NO. 111-143, at 53 (June 10, 2009) (amending Foreign Relations Authorization Act, Fiscal Years 2010 and 2011, H.R. 2410, 111th Cong. § 1120a (2009)) ("[I]t shall be the policy of the United States that, with respect to the United Nations Framework Convention on Climate Change, the President, the Secretary of State and the Permanent Representative of the United States to the United Nations should prevent any weakening of, and ensure robust compliance with and enforcement of, existing international legal requirements ... for the protection of intellectual property rights related to energy or environmental technology ...."). This amendment reflects the view that patents play an important role in encouraging innovation-an opinion that is generally held by wealthy and developed nations.
332. Tove Iren S. Gerhardsen, IP Issues May Go to 'Higher Political Level' in Copenhagen Amid Difficulties, INTELL. PROP. WATCH (Dec. 9, 2009, 5:57 PM), http://www.ip-watch.org/weblog/2009/12/09/ip-issues-may-goto-%E2%80%98higher-political-level%E2%80%99-in-copenhagen-amid-difficulties (explaining that, by and large, developed countries view patents as an important incentive for innovation, while developing countries view them as an barrier).
333. Press Release, IBM, IBM and World Business Council for Sustainable Development Team with Nokia, Pitney Bowes and Sony to Establish Eco-Patent Commons (Jan. 14, 2008), available at http://www-03.ibm.com/press/us/en/pressrelease/23280.wss (introducing the EPC and explaining how the plan originated).
334. Marc Sandy Block, Eco-Patent Commons: Selected Patents Made Available to Benefit the Environment, IP LITIGATOR, Mar.-Apr. 2009, at 25, 25-26 (discussing the history of the project).
335. Eco-Patent Commons, WORLD BUS. COUNCIL FOR SUSTAINABLE DEV., http://www.wbcsd.org/work-program/capacity-building/eco-patent-commons.aspx (last visited Mar. 9, 2012).
336. Eco-Patent Commons: Joining or Submitting Additional Patents to the Commons, 2on-Assert Pledge, WORLD BUS. COUNCIL FOR SUSTAINABLE DEV. 6, http://www.wbcsd.org/web/projects/ecopatent/EcoPatentGroundRules.pdf (last visited Mar. 9, 2012).
337. Equitable estoppel is a defense to patent infringement in which an implied license is found in a patent holder's misleading representation of permission.
338. Wang Labs., Inc. v. Mitsubishi Elecs. Am., Inc., 103 F.3d 1571, 1581 (Fed. Cir. 1997) (contrasting legal estoppel from equitable estoppel); AMP Inc. v. United States, 389 F.2d 448, 452-53 (Ct. Cl. 1968) (rejecting equitable estoppel as a basis for finding an implied license to a later-acquired patent because there was no showing that the licensor had made a false representation).
339. AT&T Corp. v. Microsoft Corp., No. 01 Civ 4872 (WHP), 2004 U.S. Dist. LEXIS 1214, at *6 (S.D.N.Y. Feb. 2, 2004) ("It is axiomatic that to assert equitable estoppel, the alleged infringer must have been aware of the patent at issue when it undertook its infringing activities.").
340. Block, supra note 275, at 26.
341. I.R.S. Notice 2004-7, 2004-3 C.B. 310 (discussing the tax implications of donating intellectual property, including patents, for charitable purposes).
342. Bronwyn H. Hall & Christian Helmers, Innovation in Clean/Green Technology: Can Patent Commons Help?, Presentation Before the Workshop on Innovation Without Patents 7 (June 12, 2010), available at http://elsa.berkeley.edu/~bhhall/papers/HallHelmers10_ecopats_BW.pdf (quoting IBM's Vice President of Environmental Affairs, Wayne Balta).
343. Eco-Patent Commons: Eco-Patents Database, WORLD BUS. COUNCIL FOR SUSTAINABLE DEV., http://web.archive.org/web/20100108051311/http://www.wbcsd.org/plugins/GENERICDB/result.asp?DBID=8&type=p&MenuId=MTU2MQ&doOpen=1&ClickMenu=LeftMenu&DBEntityTitle=&DBEntityText=&char70=&cbo68=&cbo69=&char71= (last visited Mar. 9, 2012).
344. Hall & Helmers, supra note 281, at 9, 18 (noting that patents pledged to the EPC are "more valuable than the typical patent in a firm's portfolio).
345. As one executive who was interviewed stated, "[I]t's highly questionable as to whether [the Eco-Patent Commons has] had any impact." Telephone Interview with Anonymous Source #6 (Oct. 7, 2010).
346. Hall & Helmers, supra note 281, at 24 (reporting these statistics).
347. Telephone Interview with Anonymous Source #1 (Sept. 10, 2010).
348. Telephone Interview with Anonymous Source #3 (Sept. 28, 2010).
349. Press Release, Don Tapscott, The GreenXchange, Davos: Nike and Partners Launch the GreenXchange (Jan. 27, 2010), available at http://www.greenxchange.cc/info/release/1-27-2010.
350. Pledge and License Types, GREENXCHANGE, http://www.greenxchange.cc (last visited Mar. 9, 2012) (explaining that the "Standard" license allows for royalty-free use while the "Standard PLUS" license allows the patent holder to charge royalty fees).
351. Mary Tripsas, Everybody in the Pool of Green Innovation, N.Y. TIMES, Nov. 1, 2009, at N5 (comparing the GX and the EPC).
352. Pledge and License Types, supra note 290 ("For example, the patent holder may restrict field of use, geography, or require a payment.").
353. Telephone Interview with Anonymous Source #3 (Sept. 28, 2010).
354. Telephone Interview with Anonymous Source #6 (Oct. 7, 2010).
355. NIKE, INC., Case Study: GreenXchange., in NIKE, INC. CORPORATE RESPONSIBILITY REPORT, FISCAL YEARS 2007-2009, at 125, available at http://www.nikebiz.com/crreport/pdf (last visited Mar. 9, 2012) (discussing Nike's efforts related to the GX).
356. All Organizations, GREENXCHANGE, http://www.greenxchange.cc/browse/all_organizations (last visited Mar. 9, 2012) (reflecting these figures).
357. 463 Assets, GREENXCHANGE, http://www.greenxchange.cc/search (last visited Mar. 9, 2012) (searchable database).
358. 463 Assets, supra note 298.
359. Patent: Rubber Compositions with Increased Shelf Life and Reduced Cure Temperatures and Times, GREENXCHANGE (Sept. 16, 2003), http://www.greenxchange.cc/nike/rubber-compositions-with-increased-shelf-life-and-reduced-cur (documenting Nike's donation of U.S. Patent No. 6,620,871).
360. Patent: US Patent 6,858,213 Mycobacterial Sulfaction Pathway Proteins and Methods of Use Thereof, GREENXCHANGE (Jan. 26, 2011), http://www.greenxchange.cc/ucberkeley/mycobacterialsulfation-pathway-proteins-and-methods-of-use-t (documenting U.C. Berkeley's donation of U.S. Patent No. 6,858,213).
361. Patent: Sheet Cleaner in a Multi-Station Printing Machine, GREENXCHANGE (Aug. 26, 2010), http://www.greenxchange.cc/bestbuy/sheet-cleaner-in-a-multi-station-printing-machine (documenting Best Buy's donation of U.S. Patent No. 6,684,769).
362. Barnett, supra note 1, at 442.
363. supra Part I.A. (discussing the theoretical underpinnings of the Market Correction Hypothesis).
364. supra Part I.B. (providing scholarship on the Market Correction Hypothesis).
365. Barnett, supra note 1, at 428-30, 429 n.104, 437.
366. supra Part II.A.1 (discussing the Medicines Patent Pool).
367. supra Part II.A.3 (discussing the SNP Consortium).
368. supra Part II.A.1 (discussing UNITAID).
369. supra Part II.A.3 (discussing the SNP Consortium).
370. supra Part II.A.4 (discussing the MAA). The MAA is just one historical example of the U.S. government's instigation of a patent pool. Another episode documented by scholars is the U.S. Navy's efforts to aggregate radio patents into what ultimately became RCA Corporation.
371. Merges & Nelson, supra note 95, at 892-93 (noting the RCA patent pool).
372. supra Part II.A.2 (discussing the NTD Pool).
373. Telephone Interview with Anonymous Source #8 (Feb. 7, 2011).
374. The U.S. government has also encouraged "precompetitive" collaboratives by enacting laws that reduce antitrust penalties for such groups. See National Cooperative Research & Production Act, 15 U.S.C. §§ 4301-4306 (2006). Some federal agencies such as the FDA and NIH have also collaborated directly with private industry on collaborative biomedical research projects.
375. BIOMARKERS CONSORTIUM, http://www.biomarkersconsortium.org (last visited Mar. 9, 2012). While such projects show the importance of government involvement, they fall outside the scope of this Article because they are not responses to patent gridlock. Rather they are responses to a more generalized lack of innovation in certain industries.
376. supra Part II.B.1 (discussing the OIN).
377. supra Part II.B.2 (discussing the Bessemer Association).
378. Telephone Interview with Anonymous Source #7 (Feb. 7, 2011).
379. Telephone Interview with Anonymous Source #6 (Oct. 7, 2010).
380. Merges, supra note 55, at 163 (discussing strict complementarity between patents).
381. supra Part I.A (discussing Cournot's study of monopolies).
382. supra Part II.A.1 (discussing fixed-dose ARVs).
383. supra Part II.C (discussing the EPC and the GX).
384. Ryan L. Lampe & Petra Moser, Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing-Machine Industry 5 (Nat'l Bureau of Econ. Research, Working Paper No. 15061, 2009), available at http://economics.stanford.edu/files/LampeOct15.pdf (discussing how some patent-sharing regimes can actually discourage innovation).
385. supra Part II.A.3 (discussing the SNP Consortium).
386. HELLER, supra note 10, at 31 (stating that "innovation in American airplane technology resumed" following the formation of the MAA).
387. Merges, supra note 90, at 1355 ("[N]ot only should the government exercise restraint in banning pools as violations of antitrust policy, but also ... the government may consider assisting the creation of patent pools.").
388. Parchomovsky & Mattioli, supra note 24, at 214 (proposing a compulsory licensing scheme).
389. Gary Pulsinelli, Share and Share Alike: Increasing Access to Government-Funded Inventions Under the Bayh-Dole Act, 7 MINN. J.L. SCI. & TECH. 393, 442-43 (2006) (discussing this proposal and its benefits).
390. Agreement on Trade-Related Aspects of Intellectual Property Rights, art. 31, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 313 (1995) (providing for compulsory licensing of patents under certain conditions).
391. supra Part II (discussing the interplay between government policies and patent licensing collectives).
392. See supra Part II.A.2 (discussing the role that FDA Priority Review Vouchers play in the NTD Pool).
393. In fact, the community discourages licensors from demanding vouchers from licensees.
394. Cf. IAN AYRES, CARROTS AND STICKS: UNLOCK THE POWER OF INCENTIVES TO GET THINGS DONE 24-28 (2010) (discussing the role of contingent rewards and penalties as "the basic building blocks of economic incentives").
395. Rai & Eisenberg, supra note 28, at 304-05 (noting that fund-granting agencies "are wellpositioned to take into account the impact of upstream patents on both future product development and future scientific research).
396. Pulsinelli, supra note 327.
397. See supra Part I.B.
398. See supra Part II.A.4.
399. See supra Part II.A.3.
400. See supra Part II.A.1.
401. This observation accords with Arti Rai's work on patent pools. See generally Arti Kaur Rai, Regulating Scientific Research: Intellectual Property Rights and the 2orms of Science, 94 NW. U. L. REV. 77, 130-33 (1999) (arguing that patent pools often only emerge with difficulty).
402. See supra Part II.B.1.
403. See supra Part II.B.2.
404. See supra Part II.A.1.
405. See supra Part II.A.2.