One Size Fits All

One Size Fits All?

Robin JacobJudge of the Chancery Division of the High Court of England and WalesJudge in Charge of the Patents ListStrand, London, WC2A 2LLUK

Mark Twain’s Connecticut Yank went to Warwick Castle, England. There hewas magically transported back to the time of King Arthur. He did well. He wasmade First Minister. He was called Sir Boss. What was the first thing he did inpower?

‘‘The very first official thing I did, in my administration—and it was onthe very first day of it, too—was to start a patent office; for I knew that acountry without a patent office and good patent laws was just a crab,and couldn’t travel anyway but sideways or backwards.’’1

Was Sir Boss right? Or, more specifically, was he right for modern day condi-tions, for all technologies and for all countries?

I do not propose to answer that question in detail; it is a very big one.All that I can say is that it does seem inherently unlikely that ‘‘One size fits all’’is a correct analysis of the benefits of patents (or other IP rights, for that matter)for all peoples everywhere. Certainly that was not the view of many presentlyadvanced industrial countries at earlier stages of their development. Here aretwo examples:

1 I have always wanted to use this quote in a lecture. How fortunate to be able to do so on

the banks of the Mississippi—it was from the call of the men who measured the depth of the river for

the pilots that Mr Clemens took his nom-de-plume. ‘‘Mark Twain’’ meant that the depth was 2

fathoms—dangerously close to the bottom.

Copyright � 2003 Robin Jacob 449

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1. In England, one of the first countries to have a patent system, you could get apatent for stealing ideas from foreigners and bringing them into the countryfor the first time. The first recorded British patent for an invention wasindeed a stolen idea—it was granted in 1449 to John of Uthnam, a Dutch-man who had special techniques for making stained glass windows. He wasgiven a monopoly, plus tax breaks, in return for which he had to do thestained glass windows for Eton College and a Cambridge College. He alsohad to train apprentices in the new techniques.

‘‘. . . and because the said art has never been used in England and Johnintends to instruct divers lieges of the king in many other arts neverused in the realm beside the said art of making glass, the king retainshim therefor for life at his wages and fees and grants that no liege of theKing learned in such arts shall use them for a term of twenty yearsagainst the will and assent of John, under a penalty of £200, whereoftwo parts shall be rendered to the king and one part to John, any liegewho cannot levy that sum to suffer imprisonment without delivery saveby the king’s special command.’’

2. In America, copyrights to foreign authors were refused unless their workswere first published in the USA. As a result of this process spanning thewhole of the nineteenth century and much of the twentieth, America wasthe world center of piracy. An English judge put it this way in 1880:

‘‘Persons in the position of the defendants, that is of agents for anAmerican publisher, must be taken to know that Americans are in thehabit of printing and exporting piratical works and they must thereforeknow that they import books from America at the risk of their con-taining what is piratical and are thus committing an unlawful act and ofbeing liable to be sued without notice.2

In those early days national interests, particularly the interest in encouragingnational industry, prevailed over international equality. The growth of an inter-national system, commencing with the great Treaty of Paris in 1883, beganto change things. But the change was slow. National interests still prevailed.For instance, in many countries failure to exploit a patented invention by localmanufacture was a ground for an exclusive licence. Trade-Related Aspects ofIntellectual Property Rights (TRIPS) has largely changed that. But no oneshould underestimate the resentment it causes in underdeveloped and developing

2 Per Sir George Jessel MR (1880) 15 Ch. D 501.

450 Robin Jacob

countries. I have had the benefit of attending two World Intellectual PropertyOrganization (WIPO) seminars, one in Egypt for Arab nations in 1996 and mostrecently, this year in India for judges from Asia. The common complaints weretwo-fold: that TRIPS would destroy local pharmaceutical industries and thatthey would keep the price of medicines beyond the reach of the people. Make nomistake, these are complaints which not only have force but also cannot beignored. They cannot be answered by words like ‘‘property.’’ Nor can they beanswered by vague promises of economic benefit. If you ask how Westernerswould react if the boot were on the other foot, you may understand better. Lookhow fast people in the U.S. reacted during the anthrax scare—Cipro waspatented by a foreign company and there was instantly much talk of compulsorylicensing. That was just a scare—think how people in poor countries weighrespect for patents against a shortage or impossibly high prices of drugs for large-scale diseases.

In no field is the complaint more acute than in patents on or related tohuman genes. It becomes coupled not only with a pressing need for cheapmedicines but also with emotional appeals to natural law—how can anyone‘‘own’’ genes? The complaint is worsened by the fact that no one can designaround gene patents. One of the driving forces used to justify the patent system,the incentive to design around, is gone. Another man’s gene patent is an absolutebar—a complete block for the other person—in relation to whatever that genedoes. This is a very important fact about such patents, a fact that has importanteffects and creates important conceptions in first world countries.

Gene patents are apt to have a very long reach. Consider the breastcancer gene patents on BRCA1 and BRCA2. These appear to affect all scien-tists researching those diseases and thus were greeted with much resentment.Can it really be right that only one commercial concern should have controlover any use of these genes, either by regulating testing for breast cancer ortreatment of the disease and other cancers affected by those genes? Can thepatent system justify a monopoly over all testing for these cancers? I am told thatthe Myriad, who own the patents, are trying to insist not merely on a monopolyon testing kits, but on conducting the tests to the exclusion of hospitals anddoctors as well. To outsiders that sort of reach may bring the patent system as itstands into question.

This brings me to the first subject I wish to discuss, the partly alliedtopics of compulsory licences and parallel imports: first compulsory licences. Ibelieve that most considerations of these have been and are superficial and ill-informed. In my experience as a practicing lawyer there were two periods whenfirst compulsory licences were available in the UK. When I came into practicein the late 1960s, importers of generic drugs from non-patent countries (mainlyItaly at the time) were beginning to make use of a provision of our patent lawwhich had been introduced as a result of experience during the First World War.

24. One Size Fits All? 451

The pre-war success of the great German dye and chemical industry was seen tohave been partly based on the successful use of patents to confine industrialknow-how to Germany, to the disadvantage of home manufacture. The ‘‘solu-tion’’ was to provide that anyone could, on application to the Patent Office,have a licence ‘‘on such terms as seems fit.’’

In the early 1960s, aspiring importers sought to use this provision3 toobtain compulsory licences for already-successful drugs. The earliest targets werethe early psychotropic drugs,4 shortly followed by the benzodiazapines.5 Thebattles over these drugs largely concerned the royalty rate—should it be enoughto compensate the companies for ongoing research and promotion costs as wellas profit? Should it be fixed or should it fall with prices? Not only did patenteespursue fair royalties (which I do not think they received) but also they used theprocedural system to delay. Under the law as it stood the licensee had no licenseuntil all the terms were settled—so the more you could argue, the greater thedelay. Looking back I think it is fair to conclude that the entire business wasessentially a failure from society’s point of view. Some middle men made money,and the State (the UK pays for most Patented pharmaceuticals), saved a littlebut not much. Research and risk money were adversely affected.

In 1977 this type of licence was abolished, but another emerged as aresult of the extension of the term of a patent from 16 to 20 years and theremoval of any possibility of extension of patent term.6 By way of transition,‘‘new existing patents’’ (those who had more than eleven years to run) weregranted an automatic extension of term to 20 years but were subject to ‘‘licencesof right’’ for the last four of these. Again the middlemen emerged, and again thebattles were about rates of royalty. But this time the drug companies did betterlegally,7 though in practice I think the middlemen made a lot more moneybecause their sales were so much more than under the prior regime.

What is to be concluded about compulsory licences? First and foremost,unless they are well thought-out, they are not likely to be effective in the wayintended. In particular they are a very poor way of dealing with drug prices,especially if they are available to middlemen rather than being confined

3 By this time this had been re-enacted as s.41 of the Patents Act 1949.4 E.g., Smith Kline and French’s ‘‘Stelazine’’ (trifluoperazine)5 First Hoffmann-La Roche’s Librium (chlordiazepoxide) and Valium (diazepam) and

then a number of follow-ups.6 Until 1977 a patentee who could show that he had had ‘‘inadequate remuneration’’

could obtain an extension of his patent for up to 10 years. Drug companies could often do this –

demonstrating many ‘‘lost years’’ and only late recompense for early, mainly abortive, research.7 SmithKline got 46% of their pre-licence price for Tagamet (cimetidine). Contrast that

with 26% which was about the highest achieved under the s.41 regime. Even at 46%, the generic

companies, within a few months, took the entire ‘‘generic’’ market (i.e., that met by doctors

prescribing generically rather than by the trademark).

452 Robin Jacob

to promoting local manufacturers. Middlemen are not interested in lowprices—what they want are higher prices so they can sell at that price minus alittle bit. Compulsory licences are, on the other hand, a very good way forlawyers and accountants to make money. No doubt better systems can be devisedthan we had in the UK. But I also doubt that rewarding unproductive middlemenis the best way to get cheaper drugs, even for markets which by any practical ormoral standard should have them.

Compulsory licences for local manufacturers, on the other hand, mayhave a proper purpose. Whether such licences should be available is an import-ant question, one allied to the subject of parallel imports.

What about compulsory licences for research tools? Not patents onscanners, stethoscopes, and the like, all of which as considered artifacts. It ispatents on probes, tools employing a genetic code, that may cause problems. Onthe one hand, some legal systems provide an exception to the scope of protec-tion for research. This may be wide or narrow, but it is an all or nothing solution.Surely better is an approach which recognizes that the patentee should havesome reward but also controls the size of that reward: a compulsory licence.There are many who say that a complete monopoly over a gene is inappropriate,just because you were first to isolate it, or even if you are first to isolate it andknow what it is for. It may be that well-designed compulsory license provisionswould be helpful in this area. It is not as though compulsory licence provi-sions cannot be made to work; in fact they work very well, for instance, inrelation to musical copyrights.8 There is, I think, too great a danger in callingpatents ‘‘property’’ and arguing on that basis that they must be inviolate. A lotdepends on the nature of the invention—one that is not only high risk butinvolves billions in research and years in time to bring to market stands in adifferent economic category than an isolated gene, especially one isolated bymore or less standard techniques.

I turn to parallel imports. The old English rule was that the patentee hasconsented to his product being on the market anywhere in the world if he sold itwithout any fetter. Only if he labeled the product in such a way as to bring hometo those who dealt in it (including subsequent purchasers) the product’s licensefor sale in limited territories could he use his patents outside those territories toprevent parallel imports. Other countries have different rules, and there may bedifferent rules about other intellectual property rights. The European Union, forinstance, has settled on a rule for trademarks stating that unless there is expressconsent or conduct unequivocally indicating such consent, no trademarked

8 Cases about these before the Copyright Tribunal in the UK show that they are, or can

be, just as complex as compulsory licences for patents. It would not be right to dismiss the

compulsory licences in copyright as an inappropriate analogy because they are just a question of a

‘‘penny a play.’’


goods can be imported into the EU without the trademark owner’s consent.9 SoKodak film made in Rochester, New York by Kodak and sold in the US will, ifimported into the EU, infringe upon Kodak’s EU trademarks.

My suggestion is that rational world, or at least regional, rules forparallel imports are seriously needed, particularly in the case of pharmaceuticals.Drug companies cannot expect to make serious money in poor countries. No onein such places can afford Western prices. So either the companies sell at a muchlower price or not at all. But they cannot afford to sell at lower prices if the drugsimmediately leave the poor country and reappear as parallel imports in high-price developed countries, which is exactly what middlemen will do if they can.Strong barriers to parallel imports are needed in the name of humanity in thiskind of case. If they are not available then once again, either the drugs will notbe sold at all in the poor countries or will only be sold at a high price. Eithersituation is a strong incentive for local manufacture via compulsory licensing.Putting it bluntly, if the drugs are not made available cheaply, the case forcompulsory licensing becomes unanswerable. And they can only be sold cheaplyif they are confined to the markets where they are sold.

That makes it important to put in place two systems to ensure suchconfinement. First, one can reasonably ask that some sort of system in thecountry or region of import to prevent export be put in place. No one canexpect the system to work on its own—that would be expecting too much oflocal court and administrative systems. So the first world countries need toamend their own laws to ensure that patent enforcement works well against‘‘grey’’ drugs from third world countries. The old British rule for patents is notlikely to be enough. Something like the EU’s rule for trademarks isoptional—proof positive that consent was given for re-sale in the first worldwhen drugs were sold in the third world. Otherwise there is infringement.

I turn to my next main topic, again one alluded to by Sir Boss. Hewanted ‘‘good patent laws.’’ If one stands back and takes a view of the world, thedifferences in substantive patent law are, in principle, not that great. This isbecause the main objections to validity are lack of novelty and obviousness.Things like first to invent and first to file or grace periods and restrictions on thesort of thing that can be patented (computer programs, methods of medicaltreatment, etc.), important though they are, are second order compared with thegreat duo of novelty and obviousness.

I said ‘‘in principle’’ because what matters in practice is how the rulesare enforced. In her biography of Jeremy Bentham, Mary Mack said two thingsof penetrating wisdom:

9 A purist would say this is bizarre because is it is contrary to the central function of a

trademark—to denote trade origin. If a mark does that, it fulfills its task—in a global market it is

irrelevant where the goods are actually made or sold.

454 Robin Jacob

‘‘Substantive laws are not self-enforcing. They pre-suppose an efficientadjectival law.’’

‘‘The law is everything and in it procedure and evidence come first.’’

I venture to suggest that the various systems devised for judgingwhether patents are valid or infringed are, frankly, not very good. No oneoutside America, for instance, regards the use of jury trial as remotely sensible.William Penn and his collaborator, Mead, were put on trial in London forsedition. Having heard the case, the jury retired to consider their verdict. Theydecided to grant an acquittal. The Judge refused to accept the verdict anddirected them to convict. They refused. The Judge had them locked up withoutfood or water. They held out. Eventually the impasse was overcome by anapplication to the Court of King’s Bench which overruled the Judge, thusestablishing the right of a jury to come to its own verdict if it chooses in theface of the evidence. That lesson was brought to America, and it remains animportant bastion of freedom. But Americans have taken it to an illogicalconclusion, that the right of man is to have his case tried by a body of peoplewho cannot possibly understand.10

To right the potential for this kind of injustice, Americans created theFederal Court of Appeal. But this works only after an incorrect verdict and allthe damage it can do. Even that court is likely to be severely tested in hightechnology cases. After all, its judges (and law clerks) are themselves notexperts. Some things which seem to outsiders as clever and thus inventive areactually pretty mundane to those who actually understand the art. Some mightsay, for instance, that it is wrong to assert that it is ‘‘inventive’’ to ascertain agene sequence by standard techniques, assigning patentability to that which isreally no more than the predictable result of routine research.

Conversly, the English use specialist patent judges. They have to givereasons. They can be assisted in understanding the case by a scientific advisor,not a member of the court. In high technology cases I think we are at the limit ofwhat is doable. It is not easy even for an experienced patent lawyer-judge tounderstand unaided new and very complex technologies loaded with jargon.

On both sides of the Atlantic in the common law courts, the Englishuse party-appointed experts, the expensive process of discovery and extendedcross-examination. The costs of this are not merely financial. Large cases take

10 I am aware that many U.S. trial lawyers express some confidence in trial by jury even

for patent cases. I have to say that that confidence is not shared by any foreign lawyer I have ever

met, whether from the common law or inquisitorial systems, whether in Europe or Asia or Austra-

lasia. Nor have I met a scientist who is happy to have high technology questions judged by laymen.


scientists off their proper job. I had one case, for instance, where the clientsreckoned that fighting it cost them three months research time.

There is also the problem of biased party experts—some scientists willsay anything for money. We in England are trying to keep them under control bysaying that their first duty is to the court (among other things). On the otherhand, Americans are often looking for performance rather than a solid expertview, as I would do if I were aiming for a jury trial or even a trial before anon-specialist Judge.

But even if you do have experts who are trying to be fair and non-partisan there is a basic problem in the adversarial system. It is an old problem.The young Learned Hand said in 1901:

‘‘The trouble with all this is that it is setting the jury to decide wheredoctors disagree’’11

And it is not much better if it is ‘‘setting’’ a judge alone to decide really complexmatters.

That great jurist James Fitzjames Stephens articulated the problem in adifferent way even earlier:

‘‘Few spectacles, it might be said, can be more absurd and incongruousthat that of a jury composed of twelve persons who, without anyprevious scientific knowledge or training, are suddenly called upon toadjudicate in controversies in which the most eminent scientific menflatly contradict each other’s assertions.’’12

There is also the problem of expert selection, a problem which is very old andagain gives one an uneasy feeling that something is wrong. An English Judgestated the point fair and square as long ago as 1873:13

‘‘Now, in the present instance, I have the evidence of experts on theone side, and on the other, and, as usual, the experts do not agree intheir opinion. There is no reason why they should. As I have oftenexplained, since I have the honour of a seat on this bench, the opinionof an expert may be honestly obtained, and it may be quite differentfrom the opinion of another expert, also honestly obtained. But themode in which evidence is obtained is such as not to give the fair resultof scientific opinion to the court. A man may go, and does, sometimes,

11 [1901] HARVARD LAW REVIEW.12 Address to the Juridical Society, 1859.13 Sir George Jessel MR in Thorne v. Worthington Skating Rink Co., LR 6 Ch.D n. at p.415.

456 Robin Jacob

to half a dozen experts. He takes their honest opinion: he finds three inhis favour and three against him; he says to the three in his favour:‘‘Will you be kind enough to give evidence?’’ He pays the ones againsthim their fees and leaves them alone; the other side does the same. Itmay not be three out of six, it may be three out of fifty. . . . I am sorry tosay the result is that the court does not get the assistance from theexperts, which, if they were unbiased and fairly chosen, it would have aright to expect.’’

On the continent of Europe the tendency is to use a comparativelyinexpert tribunal which itself consults an ‘‘expert.’’ Whether that individual isreally an expert is often questionable. And he may often answer the ‘‘wrong’’question or take ages to come up with any answer at all. He is effectively thejudge, which has lots of attendant dangers, especially when there is noopportunity to test his views.

It is further unsatisfactory to have different tribunals judging what is insubstance the same case in different countries. You can get a world patchwork ofdecisions at great expense and delay. There are two sorts of problems: differentnational jurisdictions and getting an adequate tribunal. I think the problems canbe linked and ultimately should be linked for high technology cases such as genepatents.

What then is the answer? So far as the different jurisdiction problemgoes there are three in principle. We carry on as we are, we let the courts of onecountry decide for other countries, or we have an international tribunal. I setaside ‘‘carry on as we are’’ for the moment to look at the other two solutions.The second answer confers extra territorial jurisdiction on national courts. Therecent drafts for a new Hague treaty go down that line. I think it is wrong anddangerous. You cannot have German or English or Estonian or Greek courtsdeciding that an American patent is being infringed in the US and ordering anAmerican defendant to stop manufacture in America. Especially unacceptablewould be foreign enforcement of U.S. jury verdicts.

What about the third solution? This would involve a treaty, and itwould crucially require that a proper tribunal be established. That is why there islink between the two problems of a modern judicial system for patents and thecross-border difficulties. Is it possible to do better than any of the existingmodels? I think so. I think a court with experienced patent lawyer-judges,assisted (as members of the court or possibly as a specialist jury) by scientistscan be made to work. I do not think, however, that scientists should bepermanent members of the court. In a field such as genetics you really needpeople who are or who have recently been active. Otherwise they are not reallyexperts themselves and could be dangerous—witness the sort of problem to behad in the European Patent Office where the Office relies too much on its own


expertise and not enough on properly prepared impartial party-provided expertevidence.

Is such a solution likely? I think so, in the long run. Europeans aregingerly going down that line, possibly in the next few years. If not this time,then next time round—say 10 years—language is an enormous complication.Gradually English as the language of business and technology will be sufficientlywidespread to make this possible. But the European solution is likely to bemodeled on the sort of court I have mentioned—it is a hybrid of the commonlaw and continental approaches.

Looking at the problem more widely, the needs of international tradeare more and more requiring regulation at a supra-national level. The WTOtribunals deal with international trade, disputes between states. I suspect thatone day there will be international patent courts, that the WTO tribunals arejust precursors of things to come. The days of the nation state for big patentdisputes are numbered. The number of days is big but finite.

Postscript: The above is for the most part a talk I gave in St. Louis, Missouriin April 2002. Not much has changed since then, but readers might like to note thatsome of the problems I mention are addressed in a discussion paper published by theNuffield Council on Bioethics (www.nuffieldbioethics.org) and the Report of theCommission on Intellectual Property Rights (www.iprcommission.org). Both thesedocuments (and the resulting discussions) are worth reading. There has been someprogress along the lines I predicted in regards to international patent litigation in that theEU is aiming to bring in a full-fledged EU patents court by the year 2010.

458 Robin Jacob

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