Mailing List CNI-ANNOUNCE@cni.org Message #91400
From: Clifford Lynch <cliff@cni.org>
Subject: National Academies Research on Intellectual Property Issues
Date: Mon, 16 Oct 2000 07:48:54 -0700
To: <cni-announce@cni.org>
The following announcement describes some of the work that the National Academies is sponsoring on intellectual property issues.

Clifford Lynch
Director, CNI

The National Academies
Board on Science, Technology and Economic Policy (STEP)

As part of its examination of intellectual property rights, the National
Academies STEP Board is pleased to announce the results of its March 23, 2000
request for proposals.  It is expected that this research will help inform the
deliberations of the Committee on Intellectual Property Rights in the
Knowledge-based Economy over the coming months, and that final reports of this
research will be presented and discussed at a public conference in early Fall
2001.  The following activities were chosen to receive full or partial support
by the STEP Board.  In addition to the commissioned work, the Committee will
have access to results of work being supported by other sponsors or provided on
a primarily pro bono basis. The researchers and project descriptions are both
pasted below this message and attached as a .pdf file.  We are grateful for the
support of the Andrew W. Mellon Foundation and the National Aeronautics and
Space Administration, who are helping support this initial research endeavor.

For further information on this research activity, please visit
www.nationalacademies.org/ipr, or contact:

Craig Schultz
Research Associate
STEP Board
cschultz@nas.edu
202.334.2200
www.nationalacademies.org/ipr


                      PATENT ADMINISTRATION AND LITIGATION

1.   Patent Examiner Productivity and Quality

In  the  absence  of  a  solid  understanding of the process of assigning patent
rights,  it  is  difficult  to assess the likely effect of changes to the PTO in
terms   of   management   and  personnel  practices,  financial resources,  and
information  sources,  etc.   Through a series of structured interviews with PTO
managers,  current  and  former  patent examiners, private patent attorneys, and
inventors,  followed  by  an analysis of a sample of recent granted patents, the
research   team   will   analyze   the   relationship  between patent  examiner
characteristics   (such   as   tenure,  educational  background  and degree  of
specialization)  to  patent  productivity and quality (such as time to approval,
citation rate, litigation outcomes, etc.).  The interviews and the analysis will
take  into  account the fact that examination is conditioned not only by law and
factors within the PTO but also by the structure of applications and interaction
with attorneys.

Scott Stern, MIT Sloan School
Sam Kortum, Boston University
Iain Cockburn, Boston University


2.   Effects of Patent Oppositions: A Comparison of U.S. and European Patent
Histories

An  important  institutional  difference  between  the  U.S. and European patent
systems  is  the  European  opposition  process  whereby  interested parties can
contest  the  validity of an issued patent for a period after its issuance.  The
U.S.  reexamination  procedure  is  more  circumscribed and much less frequently
used.   Opportunity  for opposition has been cited as an efficient and effective
means to improve patent quality, especially in novel technological areas, and to
reduce costly litigation; but the effects of the procedure have not been studied
empirically.   The  research team will assemble experimental and control samples
of  identical  USPTO and EPO patents and determine what conclusions can be drawn
about the parties to and effects of opposition on patent examination and quality
and subsequent litigation.

Dietmar Harhoff, University of Munich
Bronwyn Hall, U.C. Berkeley
David Mowery, U.C. Berkeley Haas School of Business


3.   Enforcing IPRs: the Incidence and Outcomes of Patent Suits

Patent  litigation  is  on  the  rise  and  the  costs  of  patent suits can be
substantial, but we do not know the extent to which those costs reduce the value
of  patents  vis-

à-vis other means of protecting IP and the incentives for firms
of  different  types to invest in research and development.  Using a database on
patent suits, a research team will investigate how the frequency and probability
of  suits  and their outcomes (settlement rates and win or loss rates in trials)
vary  across  patents,  technology  fields,  and  patent  owners with different
characteristics.

Jean Lanjouw, Yale University and the Brookings Institution
Mark Schankerman, London School of Economics


4.   Cooperation and Conflict Over Patent Rights in Cumulative Technologies

This  study investigates the breakdown of  private bargaining over patent rights
in  one  industrial  context, semiconductors, involving cumulative technological
development.  Previous  research  has  shown  that semiconductor firms ramped up
their  patent  portfolios during the 1980s in part to improve their abilities to
negotiate with external owners of IP and to deter patent-related suits.  Yet the
number  of  semiconductor-related  patent suits filed in U.S. federal courts has
risen  steadily  over  this  period.   This  study  tracks the patent litigation
histories  of  a  sample of 97 U.S. semiconductor firms between 1995 and 1998 to
address  two  main questions:   1)  what types of technologies (e.g., process or
product)  and  entities  are  involved in these disputes? and 2) how, if at all,
have  the characteristics of these disputes changed during the period associated
with stronger U.S. patent rights?

Rosemarie Ham Ziedonis, Wharton School, University of Pennsylvania



                      SOFTWARE AND BUSINESS METHOD PATENTS

1.   Software Copyrights and Patent Rights: The Causes and Consequences of
Regime Change in IP Protection

Although  software  patenting  has  accelerated,  it is not clear which types of
firms  with  respect  to what types of products have shifted from one form of IP
protection  to  the other or supplemented one with the other and why. Nor is it
known  whether  the  greater  propensity  to patent is associated with increased
licensing  of  computer  program  components  or is largely defensive in nature.
Whatever  the trends, what are their implications for the future of the computer
software  industry?   The investigator will relate data on software patents with
copyright registrations identifiable by firm to shed light on these questions.

D. Mowery, U.C. Berkeley Haas School of Business


2.   Internet-Related Business Method Patents

Although  the  USPTO  has  been  issuing  patents  relating  to business methods
embodied  in  software  for  several  years,  the  numbers  were small and their
significance  largely  unnoticed  until  the growth of the Internet and the 1998
Federal  Circuit  Court  of  Appeals decision in the State Street Bank case.  To
assess  the  causes  of  the  acceleration of patenting and its implications for
financial services, electronic commerce, and other services, there is a need for
baseline  data on patent holders, examination characteristics, patent references
and  scope,  and litigation trends.  The research team will develop a profile of
Internet-related  business  method  patents  that will be useful to a variety of
further  research  projects  as well as policy discussions.  A careful effort to
develop  intelligible  definitions  of  related terms (i.e., software, Internet,
business  methods,  e-commerce,  etc.)  and relate them to USPTO classifications
will accompany this analysis.

John R. Allison, Graduate School of Business, University of Texas at Austin.
Emerson H. Tiller, University of Texas at Austin



                                 BIOTECHNOLOGY

1.   Intellectual Property Licensing in Pharmaceuticals and Biotechnology

As  a  result  of  changes in policy (the Bayh-Dole Act allowing publicly funded
research institutions to acquire and dispose patent rights on their inventions),
technology (molecular biology and DNA sequencing), and participants (the rise of
university   participation   in   commercial   activity   and  growth of  small
biotechnology companies, including ones marketing genomic information), there is
concern  how  the  acquisition  and  use of patents is affecting the conduct and
communication  of  fundamental research and innovation.  In particular, there is
concern  that  the  strengthening and proliferation if patent rights to upstream
products  and  processes are making it more difficult for 1) research scientists
to  communicate  methods  and results, collaborate, and share research materials
and  2)  downstream product developers to commercialize new products. Through a
series  of  structured  interviews  with  representatives  of  all parties, the
research  team  will  ascertain  what the trends and patterns are and especially
whether reasonable arrangements for licensing IP are evolving.

Wesley Cohen, Carnegie Mellon University
Ashish Arora, Carnegie Mellon University
John Walsh, University of Illinois at Chicago.



                          RELATED RESEARCH ACTIVITIES

In  addition  to  the above commissioned work the STEP Committee on Intellectual
Property  in  the  Knowledge-Based  Economy  will have access to results of work
being supported by other sponsors or provided on a primarily pro bono basis:

1.   Patent Examination,  Patentability, and Patent Reform

Analytical papers addressing three inter-related topics: 1)  How should "prior
art" be defined given the development and future predominance of  "information
age" sources for memorializing and accessing prior art technology and the needs
and capabilities of patent offices to access prior art  examining inventions for
patentability.  A case study will consider the issues related to the definition
of and access to prior art in computer software and so-called "business method"
technology. 2)  How should the patent system be limited or bounded in areas
where public policy issues or concerns become manifest.  A case study will
consider the issue of limits on patent eligibility for genomics and business
method inventions. 3)  How should the patent system operate in the 21st Century,
focusing on proposed reforms for increasing the efficiency and quality of patent
examination and reducing the incidence and cost of disputes over patents.

Fellows of the American Intellectual Property Law Association
Robert Armitage, Lilly Research Laboratories
Michael Kirk, American Intellectual Property Law Association

2.   The Role of Intellectual Property in Financial Services

An  analytical  paper  on  how  intellectual  property  rights have affected the
development of financial services and what role they may play in the future.

Robert Hunt, Research Department, Federal Reserve Bank of Philadelphia

3.   Patent Examination Procedures

An  empirical  analysis of the relationship between the administration of patent
examination at the PTO unit level and litigation of patent validity.

John L. King, Economic Research Service, U.S. Department of Agriculture

4.   Opportunity Costs of Litigation

A  survey  component  to  ascertain the costs other than attorney fees and court
costs  entailed in litigation.  These include costs associated with the time and
attention  that firms' high-level managerial and technical personnel must devote
to avoiding, defending against, and supporting the prosecution of patent suits.

W. Cohen and A. Arora, Carnegie Mellon University
J. Walsh, University of Illinois at Chicago

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