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easily imitated, the resulting costs are likely to drain away research funds. Some biotechnology firms are said to be spending more on litigation than on research.

The economics of litigation is thus likely to favor large firms at the expense of small ones. Large firms are more likely to be able to threaten litigation and to defend against litigation. There have been at least some cases of "strategic litigation" in which a large firm uses the threat of litigation costs to squash a start-up.64

The reality of such threats has evolved with recent strengthening of the intellectual property system. In the 1960s and 1970s, patents were generally considered nearly irrelevant, because they were so often found invalid.65 Moreover, even if they were found valid, there were a number of patent misuse doctrines and antitrust doctrines that restricted the effective scope of patents. During the 1980s, nearly all these factors changed. The Court of Appeals for the Federal Circuit was created66 which not only brought the body of patent law into uniformity but also substantively changed it. Congress, the courts, and the Reagan administration radically weakened the various defenses of an accused infringer and changed antitrust/patent perceptions.67 There are signs of a change back, however, for example, in Lasercomb America, Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990), in which the circuit court created a new copyright misuse concept analogous to the old patent misuse doctrines.

A separate group of enforcement issues arises at the international level and will probably be felt more strongly in the biotechnology sector than in other sectors discussed in this chapter. Many nations have hesitated to extend as wide a scope to intellectual property protection of biotechnology as does the United States, so that doctrines differ significantly from nation


A. Silverman, Symposium report: Intellectual property law and the venture capital process, 5 High Technology L. Journal 157 (1990).


Before the Court of Appeals for the Federal Circuit was created, appellate courts upheld only 30 to 40 percent of the patents found valid by trial courts, M. Adelman, The new world of patents created by the Court of appeals for the Federal Circuit, 20 U. Mich. J. L. Ref. 979 (1987). The new court upheld 89 percent of patents in such circumstances, D. Dunner, Special Comm'n. on CAFC, 1988 A.B.A. Sec. Pat., Trademark and Copyright L. 314, 325. Continuation of this trend would make it less likely that the courts would correct for patent office errors in new technological areas.


Federal Courts Improvement Act of 1982, Pub. L. No. 97-164, sec. 127(a), 96 Stat. 37 (codified at 28 U.S.C. sec. 1295).


For example, the CAFC rejected the idea that it was an antitrust violation for a patentee to claim infringement while knowing that there was not infringement. Loctite Corp. v. Ultraseal, Ltd., 781 F.2d 861 (Fed. Cir. 1985). The Supreme Court and Congress strengthened the right of a patentee not to grant licenses, Dawson Chemical v. Rohm and Haas Co., 448 U.S. 176 (1980); Pub. L. No. 100-703, sec. 201, 102 Stat. 4674, 4676 (1988) (codified at 35 U.S.C. sec. 271(d)).

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