Two rationales underpin the patent system. First is the notion that an inventor has a natural right to the product of his or her endeavour in accordance with the views on property rights promoted by philosophers such as Locke.34 Secondly, a utilitarian rationale underpins the exchange of a short-term monopoly right to the commercial exploitation of the invention for an addition to the store of public knowledge contributed by new inventions. This utilitarian purpose has received judicial approval:
The patent system rests on the policy that a limited term monopoly will be granted as an incentive to innovation but subject to the invention and the best method of carrying it out being disclosed and made available for public use at the end of the term of protection.35
The fundamental relationship between the state and the grantee of a patent 'represents a quid pro quo. The quid to the patentee is the monopoly; the quo is that he presents to the public the knowledge which they have not got.'36 The primary purpose of intellectual property systems is to promote and protect human intellectual creativity and innovation.37 Patents are a form of social contract, where inventors receive an exclusive right for a twenty-year term38 to exploit their invention commercially in return for public disclosure of information about it. During the term of the patent only the patentee may make, use or sell the invention. The publication of details of the invention enables researchers and competitors to have immediate access to this information which they may study. This availability of new knowledge helps to spread and widen technical knowledge. As the grant of a monopoly restricts freedom of trade and commerce and is, therefore, not to be given lightly, inventors must contribute to the sum of human knowledge. Patents are available for inventions. Not every new discovery will qualify. The term invention is used to describe a patentable innovation. In contrast, an idea or principle alone is without technical application and is not patentable. However, the term invention can mean both the product, or process, and the abstract quality which the thing so invented must embody. Yet, this quality has proved difficult to define and can lead to difficult questions of law. This requirement for patentability is discussed further in Part XI.
The enrichment of the public information base is one goal of the patent system. It aims to achieve this goal through the granting of an exclusive property right in the exploitation of an invention in exchange for the contribution of new knowledge to the public domain. If the patent holder is able to control the dissemination of this new knowledge, then the public are denied the full value of the patent bargain. The disclosure of the details about the invention secures the public benefit.
DNA sequences store information about the structure and function of biological materials. The use of biotechnological innovations such as gene sequences will be necessary in order to access this information. A molecule of DNA can be used as a probe to detect the presence of a particular DNA sequence in a sample. This procedure has applications for routine diagnostic work as well as for pure research.39 Patents that restrict the public from accessing the disclosed information alter the balance of the patent contract. Therefore, it is important that gene patents do not restrict public access to the information stored in patented genes.
The incentive provided by a commercial monopoly will have an effect upon the areas in which innovation will be stimulated. If the reward is dependent upon a market for the results of research and development, then, market preferences will influence the course of research. It has been suggested that one result of this is too little investment in applied research that clearly benefits society, such as repairing damage done to the environment.40 However, socially desirable innovations can also benefit from a patent system. The first patent on a genetically modified organism was awarded for a bacterium engineered to be useful for cleaning up land contaminated with oil spills.41 Four ways in which the patent system stimulates technical progress are:
First it encourages research and invention; secondly, it induces an inventor to disclose his discoveries instead of keeping them secret; thirdly, it offers a reward for the expense of developing inventions to the state at which they are commercially practical and, fourthly, it provides an inducement to invest capital in new lines of production.42
Information about the invention is published at the beginning of the patent term. This is contained in the patent specification which is held at the Intellectual Property Office of New Zealand library and is available to the public. However, the use that the public may make of this information is limited by the scope of the patent claims.
Knowledge fuels innovation. Intellectual property rights are concerned with protecting innovation in order to promote the development of new knowledge. As government funding for research fades and private sector investment becomes a greater source of the necessary money, the incentive to make this investment must be provided by private monopoly rights. Once any new piece of knowledge exists, the greater public interest lies in a wide and rapid dissemination of that knowledge. Free usage leads to the fastest and widest distribution.43 Patent law aims to balance these two conflicting objectives.
A tension exists between the objectives of providing a monopoly on the exploitation of a new invention and the promotion of research and development. Widespread use of a new invention is the most efficient way to promote further developmental work in the field in which the invention was made. Yet the patent monopoly allows the patent holder to control and restrict the use of the invention. This tension is brought into sharp focus by inventions in biotechnology because inventions that carry their essential information with them in the form of genetic material will usually require the use of the invention itself in order to access that information. The number of patent applications that contain a genetic sequence has exploded over the past decade.44 In New Zealand, it is estimated that over 500 patent applications for genes encoding plant or animal proteins had been filed or granted prior to October 2000.45
The balance between these conflicting aims of the patent system is addressed in two ways. First, by defining patentable inventions in such a way that knowledge itself is not patentable, only industrial applications of knowledge. This is discussed in the following section. Secondly, an exclusion from patent infringement liability exists for bona fide experimental use of a patented invention. The scope of this exclusion is discussed in Part X.