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Vigorous commerce will always involve legal disputes. The fields of health and agricultural technology, however, are not only vigorous but also based on cutting-edge science that operates at the frontiers of the law. This chapter argues that a clear judicial structure with a reliable mechanism of dispute resolution is absolutely essential for these fields to flourish. In addition, an independent judiciary has a central role to play in this process.

As the U.S. Supreme Court decision of Diamond vs Chakrabarty definitively demonstrated, court decisions can have profound economic and technological implications. The decision, which allowed for the patenting of life forms, unleashed the dynamic growth of the biotechnology industry. But it is not just court decisions that have contributed to this growth. In order to help revitalize flagging technological innovation in the faltering economy of the late 1970s, in 1982 there was a fundamental, and important, change in the federal judicial structure, the first such change in over 100 years: this was the establishment of the Court of Appeals for the Federal Circuit (CAFC), which has broad jurisdiction over patent and trademark matters, that is, a national appellate court that would hear all patent appeals. A single appellate court would better understand and correct policy misperceptions, largely created by judicial decisions that had negatively impacted investment incentives in relation to patenting. A uniform and predictable application of the law, and a concomitant end to forum shopping, would promote innovation. And indeed it has. The effects have been dramatic: industrial activity, based on strengthened patent incentives, has surpassed the most optimistic expectations.

In addition to the establishment of the CAFC, two other critical events in the early 1980s catalyzed the growth of the biotechnology industry in the U.S. In 1980 the Supreme Court’s landmark decision in the Chakrabarty case, despite dire predictions to the contrary concerning the patenting of life forms, opened the nation’s economy to industrial biotechnology, enabling commercialization in this nascent field. Then, in 1980, the Bayh-Dole Act served to catalyze the revitalization of the products arising from federal investments in academic scientific research. The combination of the CAFC, the Chakrabarty decision and the Bayh-Dole Act synergistically drove the biotechnology revolution in the U.S.

Of course, court decisions matter, and the Supreme Court and the U.S. Court of Appeals for the Federal Circuit have continued to refine the relevant law. Greater precision in adjudication has been pursued by assigning the interpretation of patent claims to a judge instead of a jury. And rulings regarding the scope of patent protection have made patents more delimited and precise, with a corresponding increase in the development of invented subject matter.

Because of rapid scientific developments, new issues of law constantly arise. Advances in health and agriculture raise legal issues for which there is no precedent and about which there is no consensus. The courts therefore take an incremental approach to such questions, building on precedents that attempt to balance the competing visions of patent theory and that respond to the quick pace of scientific discovery. While the road is not direct, the law builds on the past to create a coherent and stable body of knowledge.

The Supreme Court has exhorted judges to apply the standards of the scientific community to determine the reliability of scientific and technological evidence. This entails that those who are at the frontiers of new knowledge should also keep in mind the frontiers of the law in which they operate. Such shared concern for the workings of the law will help create the optimum legal framework for today’s and tomorrow’s scientific and technological advances.

When technology and biology are involved, then the jurisprudential overview (as well as the decision of individual cases) can affect the nation’s economy and the public interest. It will additionally have an even broader global impact. The Handbook arises from the premise that developing the products of science and technology is a profound public benefit, a benefit that requires both scientific and industrial participation. This is a many-faceted concept, yet today we exist in an era of such pervasive scientific and technological advance that the development of these benefits, and their movement into commerce among nations, warrant our most concerned efforts.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• A stable, predictable, independent judiciary is an essential foundation for any successful national IP system. The U.S. Court of Appeals for the Federal Circuit (CAFC) is an excellent example of how such a court system can be structured and established, and its function further illustrates how such a court system can stimulate R&D, innovation and industry.
• In the early 1980s, the convergence of the Supreme Court decision of Dianomd vs Chakrabarty, the establishment of the CAFC, and the passage of the Bayh-Dole Act created conditions that spurred investment in biotechnology R&D, leading to many innovations in health and agriculture. Although the precise circumstances of countries vary, this is nevertheless a successful model worthy of careful study and consideration.

For Senior Management (university president, R&D manager, etc)

• Understand how the courts balance conflicting policies relating to intellectual property. This will provide useful guidance with regards to business, technology and science planning and strategy.
• When you hear of prominent court cases with multimillion dollar settlements, don’t get concerned. Only a tiny portion of agreements end in dispute. Of those that do, few get to curt. And of those that do get to court, only a small fraction end grabbing headlines.

For Scientists

• As a scientist, you understand the interrelatedness of science, R&D, technological advance and commercial investment. Share this wisdom and insight with your institution’s technology transfer office, as well as with its senior managers.

For Technology Transfer Officers

• The law relating to biotechnology is evolving to address this rapidly developing field. Be award of recent court decisions, and how they might impact economic, business and technological matters relevant to the operations of the technology transfer office.