Diagnostic Kits/IP in Kits

Patents

Patent Pools

"An agreement between two or more patent holders to license one or more of their patents to one another, or to license them as a package to third parties who are willing to pay the royalties that are associated with the license." Patent Pools provide a reduction in transaction costs but they also risk anti competitive effects and the shielding of weak patents. (Esther van Zimmeren et al. 2006)
US Antitrust law limits the behavior of patent pools which have the potential to exert unfair market pressure. ([[Diagnostic Kits/Patent pools and diagnostic testing|Verbeure, B. et al., 2006])

Patent Clearing Houses

A "mechanism by which providers and users of goods services and/or information are matched." (Esther van Zimmeren et al. 2006)

The Structure of Patent Clearhouses

The Zimmeren article provides a useful framework for understanding the patent clearinghouses (Esther van Zimmeren et al. 2006)
- Five types.
  - Two types of clearinghouses provide access to information on the patented inventions: information clearing houses and technology exchange clearing houses. Information clearing houses provide basic information related to the technology. They have a low barrier to entry but require constant maintenance. The technology exchange clearing house model adds licensing information to the basic information related to the technology to provide a means for initiating negations. (Esther van Zimmeren et al. 2006)
  - There are three types of clearing houses are analyzed that not only offer access to information but also facilitate the use of the patented inventions: the open access clearing house, the standardized licenses clearing house, and the royalty collection clearing house. The open access clearing house provides free use of patented inventions. The standardized licenses clearing house provides standardized licenses for the use of patented inventions. The royalty collection clearing house provides standardized licenses, royalty collection, monitoring of the patents, and a dispute resolution mechanism. (Esther van Zimmeren et al. 2006)

The Advantages and Disadvantages of Patent Clearhouses

Advantages
- The Zimmeren article states that clearinghouses provide the advantages of simplifying licensing negotiations, increased visibility of the patent rights, streamlining of royalty collection, and possible decreased enforcement costs.
Disadvantages (Esther van Zimmeren et al. 2006)
- The Zimmeren article states the difficulties and problems of clearinghouse include having the potential for anti-competitive effects, loss of patent holder control, high levels of patent holder participation are required for success, set up of the clearinghouse is complex, standardized licenses lack flexibility found in negotiated licenses, and trade secret secrecy data cannot be easily maintained. (Esther van Zimmeren et al. 2006)

Four licensing approaches considered by the Van Overwalle article: (Geertrui Van Overwalle et al., 2005)

Free access to the genetic sequences but royalty payments for the commercial test kits
Licensing to laboratories at a rate that makes the commercial test kit more economical
Exclusively licensing to a limited number of laboratories
Biological Innovation for Open Society license that makes improvements to the patent shared as a way to facilitate cooperative invention.

Compulsory Licensing

A compulsory license occurs when the government or court compels a patent owner to license their rights. There is no general provision for compulsory licensing under the patent statute, only very specific instances where it will be applicable. This has not been applied to licensees in genetics so far. (Geertrui Van Overwalle et al., 2005)

Licensing Behavior

The likelihood of granting a license for patented DNA sequenceswas was found to be similar for firms and nonprofits but nonprofits were far more likely to grant exclusive licenses. This use of exclusive licensing demands further study to find out if the use of these licenses is justified or merely a default practice with little substantive justification. (Henry, M. et al. 2002)
A Merz article investigating genetic test patent history for Hemochromatosis (HFE) gives a detailed patent history is developed to show how patent ownership and licensing complexities can have measurable effect on the development and performance of genetic testing. (Merz, J.F. et al., 2002)
- The patent ownership of HFE testing begins with Mercator Genetics in 1998. Next, Progenitor, Inc. merged with Mercator and was assigned its patents. SmithKline Beecham Clinical Laboratories then became the exclusive license of Progenitor’s HFE patents. Following the licensing deal, SmithKline Beecham Clinical Laboratories was sold to Quest Diagnostics. Finally, Bio-Rad Laboratories, Inc., acquired the HFE patents from Progenitor. (Merz, J.F. et al., 2002)