Patents, Progress and Unforeseen Consequences
photography by denmarsh
Clean water.
Today, it is a community priority and a public policy given. It wasn’t always so. Sometimes, it takes a crisis to push controversial policy concerns into the realm of the necessary. For environmental policy, such a seminal event was the 1969 blowout of Union Oil’s Platform A off the coast of Santa Barbara, California, which spewed some three million gallons of crude oil onto the picturesque beaches of that coastal city. The result was a cleanup problem of then-historic proportions.
But this is not a story of environmental law. To the contrary, it’s a story of how such an event can also trigger the unprecedented development, and ongoing debate, of critical issues in another area of law and public policy: intellectual property.
As with the law, the development of important new technologies may proceed from the results of other, unrelated ones. As the world’s demand for petroleum expanded after World War II, the need to transport it from regions where it was found—such as the Middle East and under the coastal oceans—to areas of demand—such as mainland U.S. and Europe—led to the development of huge oceangoing tankers, offshore drilling platforms, and ever more sophisticated piping technologies. Like many technologies, these were not fail-safe. In particular, they could lead to leaks or spills, endangering the nearby environment in disastrous and publicly unacceptable ways.
In early 1971, a relatively obscure Indian-American microbiologist, working at the historic Research and Development Laboratories of the General Electric Company in Niskayuna, New York, near Schenectady, was trying to solve this problem: how to more easily and efficiently clean up the tarry mess left when crude oil is spilled on water. Ananda Chakrabarty may not have been aware at the time, but his problem-solving invention and its subsequent legal travails not only helped advance environmental technologies, but helped jump-start the nascent biotechnology industry. But more significantly, the need to use the law to protect and nurture such emerging technologies helped revolutionize what was at the time a fairly obscure corner of law—what we now call intellectual property. Pretty soon, Dr. Chakrabarty, and intellectual property law, would be obscure no longer.
Dr. Chakrabarty’s proposed solution did not exist in a vacuum. It was known at the time that four species of the Pseudomonas bacteria contained genes that allowed the bacteria to metabolize four different components of crude oil into harmless by-products. Dr. Chakrabarty hypothesized that, if he could combine the four different genes in a single bacterium, he could optimize the bacterium’s “oil-eating” capability.
How to perform this combination was another aspect of the problem. Because of relatively recent developments in molecular biology, Dr. Chakrabarty also knew that the genes could be placed individually on bits of DNA known as “plasmids.” He also knew that these plasmids could then be used like “magic bullets” to transfer the genes from one species to another. This technique was one of the bases of the relatively new technology dubbed “genetic engineering.”
Using the plasmids, he inserted each of the four genes into yet another Pseudomonas bacterium, and then dosed it with ultraviolet light. This cross-linked all four genes in place, creating a new, stable bacteria species. It turned out that this new bacterium could “digest” crude oil ten to twenty times faster than any of the species alone, and consume almost two-thirds of the crude oil in the average spill.
This new bacterium, of course, had never existed in nature before, and so, as was the usual practice in the GE labs, Dr. Chakrabarty wrote up his work in an invention disclosure and submitted it to the GE Patent Department for consideration for filing as a patent application.
Nothing too unusual there, except for one thing: GE wanted to obtain a patent on the bacterium itself and the U.S. Patent and Trademark Office had never granted a patent on such a living organism before.
Article 1, Section 8, of the Constitution specifically grants to Congress the power to establish a patent system. Beginning with the first Patent Act in 1790, patent law has retained a number of basic elements, one key aspect of which has been a definition of inventions that are eligible for patent protection in the first place. Since, in many ways, patents have some of the properties of monopolies, the law has treated them cautiously, taking care not to allow patents on “natural phenomena,” abstract ideas, or mathematical concepts, while still providing for general applicability to technologies unknown at the time.
As the years have passed and technologies evolved in unforeseen ways, the issue of subject matter patentability has been repeatedly tested and often expanded. Statutorily, this issue is embodied in what many would consider the Patent Act’s most interesting, yet controversial, provision, 35 U.S.C. §101. Chakrabarty would be one of the biggest tests of all for the legal and policy implications of §101.
It wasn’t the first, however, and it would not be the last. Computer software; business methods; methods of using the Internet; electrical signals; human beings themselves; their embryos and stem cells; gene sequences or their fragments—especially those of humans, but increasingly those of critical plants, such as rice and corn; methods of performing medical or surgical procedures, tests, or treatments; pharmaceutically-efficacious compounds only produced in situ, so-called metabolites: the list has been a long one. Recently, it seems to have reached a particular high point in heated debates about patenting methods of tax planning and avoidance, and even movie plot lines.
For patent practitioners, the more important part of the question tends to be whether the invention meets the other main requirements for patentability, namely whether it is new and non-obvious rather than whether they satisfy subject matter requirements in the first place.
In June 1972, Dr. Chakrabarty’s patent application was filed in the USPTO by GE, which was, and in many ways still remains, a fairly conservative, risk-averse institution. Upon receiving it, the Office, following what they believed was the law at the time, rejected Dr. Chakrabarty’s application under §101, explaining that this was a “product of nature.” GE appealed to the Court of Customs and Patent Appeals (CCPA) (later the Court of Appeals for the Federal Circuit or CAFC). First in 1977, and then finally in 1979, the CCPA reversed the USPTO and held the patent allowable, stating, “the fact that microorganisms ... are alive ... [is] without legal significance” for purposes of the patent law. 596 F.2d 952 (1979). Sidney Diamond, a former trademark attorney and the Commissioner of Patents and Trademarks at the time, appealed to the Supreme Court on behalf of the USPTO, which granted certiorari.
Looking back from the vantage point of 2008, this history is nothing short of amazing. In particular, I couldn’t have guessed that this case would so preoccupy my life’s work, nor that it would reflect in many ways the growth of the intellectual property profession.
For example, in 1971, when Dr. Chakrabarty was initiating his work, I was a sophomore in college, majoring in chemistry. The use of genetic tools for such purposes was far too advanced for that level of study—such technological matters were largely confined to PhD-level programs in microbiology or advanced research labs. Today, the level of technology that Dr. Chakrabarty disclosed is practiced by high school students.
The state of the patent law, and its curriculum in law schools, was little different. By 1977, when the Chakrabarty application was filed, I took an independent study course in PTO practice with Eugene Buell, a prominent patent practitioner in downtown Pittsburgh. The previous year, Gene had taught me substantive patent law in a two-credit seminar at the University of Pittsburgh Law School—at the time, the School’s only formal patent law course. Gene hired me the next year, and I joined Gene’s firm, Blenko, Buell, Ziesenheim and Beck. It was the largest IP firm in Pittsburgh at that time, with all of seven full-time attorneys. The practice was underdeveloped: prosecution fractured and patent litigation strained by forum shopping and inconsistent enforcement.
Just at that moment, however, things were stirring in the IP profession. A Presidential Commission’s recommendations to improve the patent law eventually found their way into Congressional legislation and significant administrative and policy changes at the USPTO. By 1982, all patent appeals nationwide were consolidated in the new Court of Appeals for the Federal Circuit. More stable funding and increased use of information technologies significantly improved USPTO operations. These changes and many others revolutionized the policy and practice of IP law, and vastly strengthened the confidence, and subsequent investment, that companies, universities and individuals would have in the system.
It also would have been hard to foresee that the practice of IP law would become one of the most interesting, complicated, and, yes, lucrative among all legal specialties.
On a personal level, the changes to come were even more profound. I couldn’t possibly have foreseen that within twenty years, I would myself become Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patents and Trademark Office, and would eventually oversee the vast portfolio of General Electric’s IP portfolio, including the Chakrabarty patent, as GE’s Vice President for Intellectual Property.
However, one major issue that was still outstanding at the time, and also not easy to predict, was the many controversies epitomized by Diamond v. Chakrabarty, and its question of subject matter patentability.
The Supreme Court had taken this case, and writing for a tight 5-4 majority, Chief Justice Burger affirmed the CCPA, and maintained their reversal of the USPTO. With unusual foresight, Burger ruled that “[Chakrabarty’s] claim is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter—a product of human ingenuity ‘having a distinctive name, character [and] use.’” Specifically addressing the statutory interpretation of §101, he stated that: “In choosing such expansive terms as ‘manufacture’ and ‘composition of matter,’ modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.”
But it was perhaps the most famous quote of his long tenure as Chief Justice, substantially broadening the interpretation of §101, setting off the explosion in genetically-based bioresearch, which still resonates today: “The Committee Reports accompanying the 1952 Act inform us that Congress intended statutory subject matter to ‘include anything under the sun that is made by man.’”
This quotation, and the broad philosophy leading from it, has to this day informed the U.S. patent system and its administration in extraordinary ways. Whole fields of art or technology thought not to be patentable have been held so, such as methods of performing or implementing business methods, and the isolation and purification of human gene sequences.
Other longer-term controversies were implicated by this issue and decision, most notably in the technological and economically critical area of computer software. The same court, in dealing with this issue, struggled much more to find a cogent and consistent rationale. Just two years before Chakrabarty, the Court dealt with the issue in Parker v. Flook, 437 U.S. 584 (1978), which came to what appeared to be the opposite conclusion, i.e., seeming to rule that “software” was not patentable. Justice Stevens, in one of his first opinions, ruled that a mathematical algorithm is not rendered patentable by a novel and non-obvious application, implying that most stand-alone software was therefore not patentable.
While this seemed a major setback to software patenting, in the years to come, it would be Burger’s view that would carry the day, leading to several opinions from both the Supreme Court and the CAFC that software itself was indeed patentable subject matter. Whether this was the Burger logic or the extraordinary growth of the software industry and the need to protect its shareholder value is hard to say.
What can be said, however, and perhaps most importantly, is that it fostered a jurisprudence in this area that is second to none in the world, and allowed the U.S. to maintain its global leadership role in technological research and development.
While it continues to inspire controversies as new technologies arise, its impact on the growth and importance of intellectual property law and on the careers of those of us who are lucky enough to have found ourselves in it, are its real legacy.
And all from a concern about clean water.
