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Property Rights Theory and the Commons: The Case of Scientific Research

Published online by Cambridge University Press:  13 January 2009

Robert P. Merges
Law, University of California, Berkeley


For some time now, commentators in and out of the scientific community have been expressing concern over the direction of scientific research. Cogent critics have labeled it excessively commercial, out of touch with its “pure,” public-spirited roots, and generally too much a creature of its entrepreneurial, self-interested times. In most if not all of this hand-wringing, the scientific community's growing reliance on intellectual property rights, especially patents, looms large. Indeed, for many the pursuit of patents is emblematic of just what is rotten in the republic of science today.

Research Article
Copyright © Social Philosophy and Policy Foundation 1996

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1 See Kennedy, Donald, “Research in the Universities: How Much Utility?” in The Positive Sum Strategy: Harnessing Technology for Economic Growth, ed. Landau, Ralph and Rosenberg, Nathan (Washington, DC: National Academy Press, 1986)Google Scholar; and Boonin, Leonard G., “The University, Scientific Research, and the Ownership of Knowledge,” in Owning Scientific and Technical Information: Value and Ethical Issues, ed. Weil, Vivian and Snapper, John W. (New Brunswick, NJ: Rutgers University Press, 1989), p. 253.Google Scholar

2 See, e.g., Kenney, Martin, Biotechnology: The University-Industry Complex (New Haven: Yale University Press, 1986)CrossRefGoogle Scholar; and Commercialization of Academic Biomedical Research (Hearings before the Subcommittee on Investigations and Oversight and the Subcommittee on Science, Research, and Technology of the House Committee on Science and Technology, Ninety-seventh Congress, First Session, 1981), pp. 6263Google Scholar (testimony of Dr. Jonathan King, Professor of Biology, Massachusetts Institute of Technology):

The openness, the free exchange of ideas and information, the free exchange of strains, of protein, of techniques, have been a critical component in the creativity and productivity of the biomedical research community.…

This freedom of communication stemmed from the fact that all of the investigators shared the same professional canon: the increase of knowledge of health and disease for the general benefit of the citizenry.…

3 See Lehrman, Sally, “Broad Coalition Adds Voice to Religious Protest on Gene Patents,” Biotechnology Newswatch, 06 19, 1995, p. 1Google Scholar, in which Lehrman quotes Richard Levins, Professor of Population Science at the Harvard School of Public Health, as staring that gene patenting is a means of “subordinating a common intellectual heritage for private gain.”

4 Merton, Robert K., The Sociology of Science (Chicago: University of Chicago Press, 1973).Google Scholar

5 Hagstrom, Warren O., The Scientific Community (New York: Basic Books, 1965).Google Scholar

6 Ibid., pp. 87, 91.

7 Cohen, Jon, “Share and Share Alike Isn't Always the Rule in Science; Many Researchers Fail to Share Materials,” Science, vol. 268 (06 23, 1995), pp. 1715–18.CrossRefGoogle Scholar

8 Ibid., p. 1715: “A National Research Council (NRC) report last year on problems with sharing genetically engineered mice such as knockouts [i.e., mice genetically engineered to have immune systems lacking a defense against a disease, used to test drugs aimed at treating that disease] concluded that ‘increased cost and competition … appear to be challenging the tradition of sharing in some branches of biological research.’”

9 See Ibid., p. 1717, where Cohen recounts the story of the creator of a research mouse who directed his graduate student to “initially [turn] down [a] request because [the requestor] was a direct competitor; that researcher was later given the mouse for a specific experiment in an area unrelated to [the creator's work or that of his graduate student].”

10 Ibid., p. 1716.

11 See, e.g., Student Note, “Ties That Bind: Conflicts of Interest in University-Industry Links,” U.C. Davis Law Review, vol. 17 (01 1984), p. 895.Google Scholar

12 See, e.g., Djerassi, Carl, “The Gray Zone: Academic Researchers and Private Enterprise,” Science, vol. 261 (08 20, 1993), p. 972.CrossRefGoogle Scholar

13 See, e.g., Cohen, , “Share and Share Alike Isn't Always the Rule in Science,” p. 1715:Google Scholar

[P]roblems in materials sharing … crop up in cell-line repositories, crystallographic databases—indeed wherever competitors would like to share research materials. And these problems stir passions in the scientific community. “Typically, over coffee or beer at night, this is what our colleagues are talking about,” says one researcher at the University of California, Berkeley, who insisted on anonymity.

Science's investigation, however, reveals that, e.g., “while no makers of [the genetically engineered mice known as “knockouts”] simply refuse to share them, some researchers substitute their own policies for those of NIH: not sharing mice until long after publication, or sharing mice selectively. Insiders in the field—none of whom would allow themselves to be named—repeatedly mentioned Nobel prize-winning immunologist Susumu Tonegawa as someone whose mice are not freely available immediately after publication.”

14 See Burk, Dan L., “Misappropriation of Trade Secrets in Biotechnology Licensing,” Albany Law Journal of Science and Technology, vol. 4 (1994), pp. 141–42:Google Scholar

The professional norms of the scientific community have long required that scientists share data and materials with one another, both to allow repetition and validation of reported results and to facilitate new discoveries.… These exchange practices have to some extent been constrained by an unwritten and often unspoken agreement among researchers that the materials shared will not be used for commercial gain and will not be passed on without permission from the original owner.

15 ibid., p. 142.

16 See Merges, Robert P., Patent Law and Policy (Charlottesville, VA: Michie Co., 1992), ch. 2.Google Scholar

17 This and other details of the early movement for property rights in science are drawn from Hamson, C J., Patent Rights for Scientific Discoveries (Indianapolis: Bobbs-Merrill Co., 1930).Google Scholar

18 Quoted in Ladas, Stephen P., Patents, Trademarks, and Related Rights: National and International Protection (Cambridge: Harvard University Press, 1975), vol. 3, p. 1856.Google Scholar

19 Ladas, , Patents, Trademarks, and Related Rights, vol. 3, section 1012, p. 1856.Google Scholar

20 Ruffini, F., Report on Scientific Property (Committee on Intellectual Cooperation, League of Nations, Document A. 38, 1923), XII, 10Google Scholar; quoted in Ladas, , Patents, Trademarks, and Related Rights, section 1012, p. 1856.Google Scholar

22 See Ladas, , Patents, Trademarks, and Related Rights, section 1017, p. 1862.Google Scholar

24 See ibid., sections 1021–26, pp. 1868–75. It should be noted that Article 2(viii) of the convention establishing the World Intellectual Property Organization (WIPO) includes, in the definition of “intellectual property,” rights relating to “scientific discoveries” and “all other rights resulting from intellectual activity in the … scientific … fields.”

25 See Hamson, , Patent Rights for Scientific DiscoveriesGoogle Scholar; and Ladas, , Patents, Trademarks, and Related Rights.Google Scholar

26 Katz v. Horni Signal Mfg. Corp., 145 F.2d 961, 63 U.S.P.Q. (BNA) 190 (2d Cir. 1944).Google Scholar

27 See Merges, , Patent Law and Policy, ch. 2.Google Scholar

28 This is the legal test used to determine patentability in close cases involving a putative “scientific principle.” See ibid., ch. 2.

29 See Teitelman, Robert, Profits of Science: The American Marriage of Business and Technology (New York: Basic Books, 1994).Google Scholar

30 See ibid., p. 8, where Teitelman contrasts the 1953 elucidation of the structure of the DNA molecule by James Watson and Francis Crick, which had no commercial impact until decades later, with the 1973 Cohen-Boyer work on recombinant DNA, which led to the founding of Genentech in 1976.

31 See ibid., ch. 1.

32 Eisenberg, Rebecca, “A Technology Policy Perspective on the NIH Gene Patenting Controversy,” University of Pittsburgh Law Review, vol. 55 (Spring 1994), p. 646.Google Scholar

33 Carlton, Jim, “Roche Brings Leading Institutions into Lawsuit over Patent Rights,” Wall Street Journal, 05 25, 1995, p. B4:Google Scholar

At a conference here this week, scientists reacted with dismay [to a suit brought by Roche against Promega, another biotechnology company, in which Roche accused Promega of “contributory infringement” by supplying scientists with a key component that allows them to use Roche's patented polymerase chain reaction (PCR) technology], saying they could be prevented from using patented products—such as for computers and biotechnology—in their scientific research. They say they have done research virtually unfettered by patent constraints for some 200 years.

Note that many of these scientists—or at least the institutions where they work—are actively seeking patents on the results of their research. In other words, they are dismayed that their own strategy of defecting from the cooperative arrangement is becoming the norm!

34 On lab transfer agreements, see Lipsey, Charles E. et al. , “Protecting Trade Secrets in Biotechnology,” in Protecting Trade Secrets (PLI Patent, Copyright, Trademarks, and Literary Property Course Handbook Series No. 224, 1986), Exhibit K.Google Scholar

35 This uniform MTA suggests that standard contractual terms—a form of transaction-cost-reducing industry coordination—are beginning to emerge. (My source here is a personal interview with Sandy Shotwell—an AUTM member and a participant in the project to draft the Uniform Biotechnology Material Transfer Agreement (UBMTA)—conducted in Washington, D.C., in February 1994.) On the evolution of transaction-cost-reducing institutions and practices in intellectual property-intensive industries, see Merges, Robert P., “Of Coase, Property Rules, and Intellectual Property,” Columbia Law Review, 1994, p. 2655Google Scholar; and Merges, Robert P., “Intellectual Property and the Costs of Commercial Exchange: A Review Essay,” Michigan Law Review, vol. 93 (1995), p. 1570.CrossRefGoogle Scholar

36 See Ellickson, Robert, Order without Law (Cambridge: Harvard University Press, 1989)Google Scholar; and Eggertsson, Thrainn, Economic Behavior and Institutions (Cambridge: Cambridge University Press, 1990).CrossRefGoogle Scholar

37 Ostrom, Eleanor, Governing the Commons (Cambridge: Cambridge University Press, 1990).CrossRefGoogle Scholar

38 See, e.g, Stevenson, Glenn, Common Property Economics: A General Theory and Land Use Applications (Cambridge: Cambridge University Press, 1991)CrossRefGoogle Scholar, which presents empirical studies of grazing rights in common pastures. (The Ostrom quote earlier in this paragraph is from Governing the Commons, p. 110.)Google Scholar

39 In this respect, they bring to mind some intriguing observations of my colleague Bob Cooter regarding the formation of formal markets for property rights in Papua New Guinea, a country currently undergoing a transition from a traditional, clan-based system of real-property ownership to a more modern system. See Cooter, Robert, “Inventing Market Property: The Land Courts of Papua New Guinea,” Law and Society Review, vol. 25 (1991), p. 760CrossRefGoogle Scholar, where Cooter argues that the best approach to modernizing is for courts to encourage “novel forms of market property that are more congenial to tradition.”

40 See Eisenberg, Rebecca, “Patents and the Progress of Science: Exclusive Rights and Experimental Use,” University of Chicago Law Review, vol. 56 (1989), p. 1017CrossRefGoogle Scholar, where Eisenberg describes the interaction between the scientific research ethos and intellectual property rules.

The pure research exemption to patent infringement, known as the experimental-use doctrine, had its origins in Justice Joseph Story's opinion in Whittemore v. Cutter, 29Google Scholar F. Cas. 1120 (C.C.D.Mass. 1813) (No. 17,600). In this case, the defendant appealed a jury instruction which stated, in effect, that the “making of a machine … with a design to use it for profit” constituted infringement. Justice Story upheld the trial judge's instruction, and stated that “it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects” (29 F. Cas. at 555). Other cases followed, generally limiting the exception to these quite narrow grounds. See Note, “Experimental Use as Patent Infringement: The Impropriety of a Broad Exception,” Yale Law Journal, vol. 100 (1991), p. 2169Google Scholar, which states that the experimental-use exception “should be applied as it has been in the past: in a very restrictive manner, consistent with the purpose and function of the patent system.”

In Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858, 221 U.S.P.Q. (BNA) 937 (Fed. Cir.), cert, denied, 469 U.S. 856 (1984), the Federal Circuit Court of Appeals considered the experimental-use defense for the first time. Here, the defendant, Bolar Pharmaceuticals, engaged in infringing acts prior to the expiration of the plaintiff's patent in order to facilitate Food and Drug Administration testing, so as to be ready to market the drug as soon as the patent expired. The Federal Circuit Court overruled the district court's finding of nonin-fringement, holding that the experimental-use exception did not include “the limited use of a patented drug for testing and investigation strictly related to FDA drug approval requirements …” (733 F.2d at 861).

41 In fact, in “Patents and the Progress of Science,” Eisenberg explicitly recommends that “[r]esearch use of a patented invention with a primary or significant market among research users should not be exempt from infringement liability when the research user is an ordinary consumer of the patented invention.”

42 See Eisenberg, , “Patents and the Progress of Science.”Google Scholar

43 The most notorious recent case involves patents on short snippets of genetic material, which, it is hoped, will one day be identified as portions of larger, whole genes having commercial applications. See Eisenberg, Rebecca, “Genes, Patents, and Product Development,” Science, vol. 257, p. 903CrossRefGoogle Scholar; Adler, Reid, “Genome Research: Fulfilling the Public's Expectations for Knowledge and Commercialization,” Science, vol. 257 (1992), p. 908CrossRefGoogle ScholarPubMed; Kiley, Thomas, “Patents on Random Complementary DNA Fragments?Science, vol. 257 (1992), p. 915CrossRefGoogle ScholarPubMed; and Healy, Bernadine, “Special Report on Gene Patenting,” New England Journal of Medicine, vol. 327 (1992), p. 664.CrossRefGoogle Scholar

44 The “outsiders” may also be members of the commons, only acting in a commercial capacity. It is typical in university research circles for academic researchers to have commercial affiliations. I assume here that community members “role differentiate” in their dealings with each other, that is, behave differently in a transaction with the same partner when that partner is acting in a different role (e.g., commercial entity rather than academic colleague).