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Data-Generating Patents

62 Pages Posted: 24 Mar 2016 Last revised: 10 Mar 2017

Brenda M. Simon

Thomas Jefferson School of Law; Stanford Law School - Center for Law & the Biosciences

Ted M. Sichelman

University of San Diego School of Law

Date Written: April 6, 2016

Abstract

Patents and trade secrets are often considered economic substitutes. Under this view, inventors can decide either to maintain an invention as a trade secret or seek a patent and disclose to the public the details of the invention. However, a handful of scholars have recognized that because the patent disclosure requirements are not always rigorous, inventors may sometimes be able to keep certain aspects of an invention secret, yet still receive a patent to the invention as a whole. Here, we provide further insight on how trade secrets and patents may act as complements. Specifically, we introduce the concept of “data-generating patents,” which are patented inventions involving technologies that by design generate valuable data by their operation or use. For instance, genetic tests and medical devices produce data about patients. Internet search engines and social networking websites generate data about the interests of consumers. When data-generating inventions are patented, and the patentee enjoys market power over the invention, by implication, the patentee also effectively enjoys market power over the data generated by the invention. Trade secret law further protects the patentee’s market power over the data, even where that data is in a market distinct from the patented invention and especially after the patent expires or is invalidated. We contend that the use of patents and trade secrets as complements in this manner may sometimes yield socially harmful results. We identify the conditions under which such results occur and make several recommendations to mitigate their effects.

Keywords: patents, trade secrets, big data, medical diagnostic tests, search engines, Myriad, Google

JEL Classification: L1, L2,L5, L63, L65, O3, O34

Suggested Citation

Simon, Brenda M. and Sichelman, Ted M., Data-Generating Patents (April 6, 2016). Northwestern University Law Review, Vol. 111, pp. 377-437, 2017. Available at SSRN: https://ssrn.com/abstract=2753547

Brenda M. Simon

Thomas Jefferson School of Law ( email )

1155 Island Ave
San Diego, CA 92101
United States
619-961-4307 (Phone)

Stanford Law School - Center for Law & the Biosciences ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Ted M. Sichelman (Contact Author)

University of San Diego School of Law ( email )

5998 Alcala Park
San Diego, CA 92110-2492
United States
(619) 260-7512 (Phone)
(619) 260-2748 (Fax)

HOME PAGE: http://https://www.sandiego.edu/law/faculty/profiles/bio.php?ID=795

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