[Upd-discuss] STEP RFP for Intellectual Property Rights Project

[James Love]

Subject:  Intellectual Property Rights Project - Request for Proposals
   Date:  Thu, 23 Mar 2000 16:52:44 -0500
  From: "Craig Schultz" <cschultz@nas.edu>
   

The attachment to this message describes the next step in the STEP Board's work 
on intellectual property policy. Focusing on issues raised at our February 2-3 
conference, "Intellectual Property Rights: How Far Should They Be Extended?",  
we are seeking help in analyzing and documenting the benefits and costs of 
several features of the system as well as in understanding its operation in 
software and biotechnology.   Please refer this announcement of our intention 
to support selected research projects to anyone you think may be interested in 
participating.

(See attached file: IPR.RFP.doc)

March 23, 2000
                            '
                    The National Academies
     Board on Science, Technology, and Economic Policy

                 Request for Proposals for
Research on Intellectual Property in the Knowledge-Based Economy


Purpose

The Science, Technology, and Economic Policy (STEP) Board is undertaking a study
of intellectual property policy to address the following questions:  What are
the consequences of the series of legislative actions, judicial decisions,
institutional changes, and international agreements that have marked IP policy
over the past 20 years?  What benefits have been derived?  What problems may be
emerging?  Are there respects in which the extension of IPRs should proceed
further to encourage technical advance, investment, and innovation or, in view
of claims that in some circumstances IPRs may be inhibiting competition and
discouraging research and its communication and use, are there respects in which
the extension of IPRs has proceeded too far?  The project is chaired by Richard
Levin, President, Yale University, and Mark Myers, Senior Vice President (ret.),
Xerox Corporation.  Additional information about the Board





?s membership and this
project is available on its home page, www4.nas.edu/pd/step.nsf.

The STEP Board has held workshops in Berkeley and New Haven and a two-day
conference in Washington to refine these issues and hear the range of opinions
about them.  The sustained growth and technological dynamism of the economy
suggest that IP protection has been beneficial.  At the same time, there is
growing concern about the operation of IP in some industries.  There is,
however, little systematic information on how IPRs are being acquired and
exercised in most sectors, and especially in emerging technologies such us the
Internet and human genomics.  Little research has been done on the operation of
the patent system or on costs and benefits associated with patent litigation or
patent-related transactions (e.g., licensing and cross-licensing).

To inform its deliberations over the next 12-15 months, the Board wishes to
commission analysis and research on the issues described below.  These topics
primarily concern the patent system.  Other topics relating to copyright and
trade secret protection may be the subject of future RFPs, depending on
resources.



Scale of Research and Mechanism of Support

To be useful to the Board in this time frame, projects should be policy-oriented
and should be completed in 10-12 months.   The Board will consider proposals for
analytical papers with budgets in the range of $5,000-7,000 and proposals for
empirical research and data analysis in the range of $15,000-30,000.   The
resources available to the Board obviously fall short of being able to finance
large-scale empirical data collection but may enable ongoing research to address
additional questions, conduct of a pilot survey,  employment of a research
assistant, or interview-based studies.  The support will normally be provided
through a contract or consulting agreement with an investigator per the standard
procedures of the Academies.

Procedure and Schedule

The Board requests submission to the email address below, preferably in Word
format, of 2-5 page statements of interest by May 1, 2000.  These statements
should include a description of the proposed analysis or research, a description
of the proposed methodology, and a brief statement of qualifications and related
work.  A statement need not address all of the questions listed under the
general topic heading. The statements will be reviewed by a group of STEP
members and advisers.  Authors of proposals of interest will be contacted by May
15, 2000 for further discussion.  Final selection will be made by June 1, 2000.
The investigators will meet with the committee in October or November 2000 to
discuss their progress.  Where appropriate, small informal groups may be formed
to advise on the execution of the research.  A new Academy website will be
available to solicit input and comments.  One or more public meetings will be
held in Spring 2001 to discuss the research findings with other investigators,
practitioners, and policymakers.  Finally, the Academy may publish the results
as part of the project.


Topic 1:   Patent Administration and Litigation

The Board is interested in several generic issues while recognizing that
circumstances are likely to vary considerably from one class of technology to
another and that problems in one arena may not be characteristic of all.  The
Board seeks proposals addressing one or more of the following dimensions of the
patent system:

(a)  Administration:  A commonly expressed  concern is that that Patent and
Trademark Office (PTO) lacks sufficient resources to conduct rigorous, thorough
review of patent applications, especially in rapidly changing technologies.
What are the facts regarding the relationship of human (encompassing numbers,
qualifications, turnover, etc.), financial (fees available to the PTO), and
information resources (prior art data bases) to the volume of applications,
prior art search methods, adaptation to new technologies?  What is the incentive
structure or bureaucratic culture in the PTO and how does it affect performance?

(b)  Patent Quality:  Another concern is that there may have been a lowering of
   standards, especially non-obviousness and utility, in reviewing and issuing
   patents, with the result that many more patents of ?low quality? and broad
   scope are being issued.  Are there ways to measure empirically changes in the
   application of these standards over time?  Is the number of claims associated
   with a patent an empirical measure of breadth of scope in this sense?  How
   are these related to observable characteristics of PTO administration and/or
   court decisions?  How are these measures related if at all to the way
   economists measure patent importance or value ? i.e., by the frequency of
   citations in subsequent patents?  Has there been a demonstrable change over
   time across technologies or in particular sectors?  What are the economic
   implications of more patents of  poor quality and broad scope?

(c)  International Comparison:  A related claim is that the German or another
   European patent system produces superior results ? fewer, higher quality
   patents less subject to litigation, etc.  How can systems be compared and the
   effects of particular system differences be isolated?  For example, would a
   comparison of the life histories of a sample of identical patents in the U.S.
   and another country such as Germany illuminate the effects of differences in
   examination processes, reexamination, opposition and interference
   proceedings, publication of applications, litigation processes, etc.?

(d)  Litigation Costs:  Some observers claim that the costs associated with
litigating patents, including responses to  threats of litigation that may never
occur, are escalating and excessive.  What is the best measure of the rate of
litigation ? e.g., the rate for all issued patents or the rate for all
commercialized patents or some other measure?  How does the incidence and cost
of patent litigation compare with other areas of commercial law (e.g., tort
liability)? To what extent does essentially defensive patenting contribute to
these costs?  What are the opportunity as distinct from out-of-pocket costs
?e.g., the technical and managerial resources devoted to assessing patent
validity and to negotiation?  Finally, how do characteristics of patent
administration (e.g., thoroughness of review, availability and frequency of
reexamination, etc.) affect transaction costs?

(e)   Markets in Intellectual Property:  It has been suggested that there has
   been a dramatic growth in patent-related transactions (e.g., licensing,
   cross-licensing, equity sales, etc.).  We would like to document this trend
   and develop an understanding of its possible benefits and costs.  How do the
   trends in these transactions and their benefits and costs vary across key
   technology areas?for example, in complex electronic versus more discrete
   chemical product technologies?


Topic 2:  Software-enabled business method patents and biotechnology patents

The Board is also interested in the functioning of IP in particular technologies
and industries and the similarities and differences among them.  According to
many participants in the recent series of STEP meetings, the most problematic
arenas are software, especially software-enabled business methods, and
biotechnology, especially involving genetic sequences.  The fact that extensive
patenting of these technologies is quite recent precludes definitive
conclusions.  Moreover, there are striking differences in product cycles,
industry structure and other economic characteristics.  It is not expected that
research proposals will address both sectors.  Nevertheless, the Board seeks
information that will enable it to assess and compare trends for each of these
two technology areas in

(a)  Patenting and licensing:  Who is patenting what?  What are the common
licensing patterns in each industry?

(b)  Patents and investment:  What are early stage (e.g., VC and angel)
investors? perceptions of the value of formal intellectual property in these
technologies?  How have these attitudes changed over time?  What do IPO filings
reveal about public investors? view of the role of IP?  Do investors perceive
differences in the quality of patents?  Do they take care to evaluate the
validity of patents?

(c)  Patent litigation:  What are the litigation trends in these areas?

(d)  Disclosure:  How does the disclosure function of patents operate in
software and biotechnology?  Are issued patents (or, prospectively, patent
applications available after 18 months) a source of useful technical
information?

The controversies surrounding software and biotechnology patents also pose
sharply different issues of concern to the Board.  Although these are of recent
origin, there may be instructive parallels in the evolution of other
technologies.  The Board encourages exploration of analogous historical cases.
The examples of business method and genomic patents are not meant to restrict
attention to those categories, but proposal statements should specify the scope
of the subjects of the proposed work.

n    Software-enabled business methods.   Here the concern is that patents on
elements of widespread software-based business practices and Internet services
will enable hold-ups of routine operations, blocking of new entrants, and
economic concentration with a consequent slowdown in innovation.  The patenting
issues relate to whether there are adequate searches of prior art and adherence
to the non-obviousness and novelty standards.  There are also post-issuance
questions about whether reasonable licensing arrangements are being or can be
worked out.   Business methods software represents a technology in transition ?
either from the public domain to the patent domain or from copyright to patent
protection ? raising two questions:  Are the alleged problems transitory rather
than fundamental?  Are they likely to arise in other technological areas that
may become subject to patenting?

n    Biotechnology.  Here there is controversy over whether genetic sequences
should have patent protection and, if so, whether application of the standards
of utility and non-obviousness and the written description requirement is
sufficiently stringent.  The latter issue has led to new guidelines for patent
application review.   One question, therefore, is how the new guidelines would
have affected patents that have already been issued.  A second question is
whether existing gene patents have been put into practice, e.g. for the
development commercial products anticipated by the utilities described in the
applications or whether the patents on upstream research materials have reduced
the incentives for downstream research and commercialization.   Are suitable
licensing arrangements being worked out to facilitate further research and
commercialization or are the initial patents raising transaction costs to the
point of impeding them?   A related question is the effect of sequence patents
on academic research and its communication.  Are they, for example, creating
obstacles to the exchange of research tools and delays in the publication of
results?   The role of universities in biotechnology patenting under the
Bayh-Dole Act of 1980 is an important factor in considering the effects both on
research and on commercial development.

Other Topics

The Board will consider proposals on other topics broadly relating to the
economic impacts of the patent system, both positive and negative.  These might
include:

1)   The effects on research and on IP-intensive industries of the Supreme
Court?s decisions that Congress lacks the power to compel the States (and State
agencies) to observe federal intellectual property law.

2)   The political economy of the patent system ? what forces and interests have
shaped the current patent system and what are the levers for change?

3)   The theoretical underpinnings of the patent system in light of changes in
its scope and operation.

4)   Characteristics of individual inventors and the role of features of the
patent system in stimulating or impeding entrepreneurship and industry entry.

For Further Information:

     Dr. Stephen A. Merrill
     Executive Director
     Board on Science, Technology, and Economic Policy
     2101 Constitution Avenue, N.W.,  FO-2014
     Washington, DC 20418

     Tel. 202-334-2200
     Fax. 202-334-1505
     Email.    Smerrill@nas.edu

To Submit Proposal Statements:    STEP@nas.edu