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An Examination of the Issues Surrounding Biotechnology Patenting and Its Effect Upon Entrepreneurial Companies

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The biotechnology industry is notable both for its heavy concentration of small businesses and its weighty research and development (R&D) expenditures. Given the small size and heavy expenses of many biotechnology firms, their ability to raise venture capital may be of some consequence. The patent law has been identified as a facilitator of these R&D financing efforts.

Although many observers believe that the patent law plays a significant role in the biotechnology industry, two principal issues have arisen regarding biotechnology patenting. First, observers have fundamentally questioned whether patents should be granted for living inventions, genetic materials and other biotechnologies. Ethical issues, concerns that biotechnology patenting promotes animal suffering and decreases genetic diversity, as well as regard for the traditional agricultural community animate many of these objections. Supporters of biotechnology patenting counter that trade secret protection is a less attractive social alternative, observe that patents have long been granted for biotechnologies, and question whether the patent law is the appropriate vehicle for technology assessment.

Commentators have also differed over the extent to which an inventor must show a specific, practical use for a biotechnology in order to be awarded a patent. Some observers favor a strict view of the utility requirement due to concerns over overlapping upstream patents that discourage research and commercialization. Others believe that the utility requirement should be applied leniently, stating that a strict view of utility will only lead to industry concentration and that biotechnology research tools cannot be meaningfully distinguished from other sorts of inventions.

Congress may choose to exercise oversight on these issues. Such consideration would likely include examination of U.S. commitments in international agreements along with other factors.