Patented Inventions and
Externalities: Hohfeldian Legal Relationships as They
Apply to Pollen Drift
and Other Inadvertent Use
M.M. B
ANIK1 AND
P.J. T
HOMASSIN2
1
Department of Management and Technology,
Université du Québec à Montréal, Montreal, Canada;
2
Department of
Agricultural Economics, McGill University, Montreal, Canada
Abstract
Patented agricultural biotechnology inventions, such as
genetically modified (GM) plants, provide many benefits like increased crop
yield. However, they can also create nuisance for neighbouring farmers if
pollen drift results in patent infringement. The main concern with such
negative externalities in the context of a patentee and competing farmer is its
effect in reducing incentives for farmers to develop their own varieties of
plants. The resulting reduction in biodiversity can, in turn, adversely affect
social welfare by reducing future opportunities for innovation as a result of a
reduction in the number of different varieties available as research and
development (R&D) inputs.
According to Coase (1960) and depending on how rights to
use such inventions are allocated, farmers can pay patentees to prevent them
from releasing such inventions into the environment. Alternatively, if rights
to release such genetically modified organisms (GMOs) were granted to farmers,
patentees could pay farmers to maintain buffer zones. However, in practice such
transactions will be difficult to conclude. We argue that rendering patents
unenforceable in conditions of inadvertent use, in addition to imposing
liability for crop damage, is the second-best alternative to reducing such
negative externalities. Using a typology of Hohfeldian legal relationships, we
specify how rights may be allocated between patentees and farmers, as well as
why some technologies lend themselves naturally to such arrangements. The state
can play a key role in inducing the creation of valuable inventions that create
fewer negative externalities, by specifying both patent rights and a set of
auxiliary rights establishing the conditions under which such inventions may be
used.
©CAB International 2007.
Agricultural
Biotechnology and Intellectual Property: Seeds of Change
(ed. J.P. Kesan)