Constance E. Bagley

Pharmaceutical Public-Private Partnerships: Moving from the Bench to the Bedside

Both to address unmet medical needs and to improve industry competitiveness, regulators in both the United States and the European Union have taken bold steps to translate academic research from the university lab to the patient. A pharmaceutical public-private partnership (PPPP), which is a legally binding contract between a private pharmaceutical enterprise and a public research university (or a private university doing research funded with public funds), can be a significant tool to ensure a more efficient payoff in the highly regulated world of pharmaceuticals. In particular, a properly framed binding contract, coupled with respect for positive social norms, can move the parties away from an inefficient prisoners’ dilemma Nash Equilibrium to the Pareto Optimal Frontier. When coupled with appropriate attention to the difficult task of coordinating the actions of interdependent actors, a PPPP arrangement can enhance the likelihood of successful commercialization by flipping the parties’ incentives as compared with more traditional contracts. Because PPPPs are less common in Europe than in the United States, a key purpose of this article is to provide an annotated roadmap that universities, private firms, and EU policy makers can use to create efficient PPPPs to enhance for-profit innovation in the pharmaceutical industry in Europe. A secondary purpose is to suggest amendments to the U.S. laws governing the patenting of government-funded technology to prevent undue burdens on the sharing of certain upstream medical discoveries and research tools. Our analysis is not only comparative; it also combines, we believe for the first time, a game theory and law and management approach to for-profit PPPPs.

CROSSING THE GREAT DIVIDE: USING ADVERSE POSSESSION TO RESOLVE CONFLICTS BETWEEN THE ANTITRUST AND INTELLECTUAL PROPERTY REGIMES

This paper focuses on two related questions at the intersection of antitrust and intellectual property law. First, under what circumstances must the holder of a patent or a copyright or the owner of a trade secret allow others to use that intellectual property? Second, under what circumstances can the holder of an intellectual property right use that right to make it difficult for another party to succeed in a related market? These questions have vexed antitrust and intellectual property scholars alike ever since the Federal Circuit ruled in 2000 that patent holders “may enforce the statutory right to exclude others from making, using, or selling the claimed invention free from liability under the antitrust laws,” a ruling that directly contradicted the Ninth Circuit ruling that antitrust liability could be imposed for almost identical conduct, depending on the motivations of the patent holder. The various proceedings in United States v. Microsoft only added fuel to the firestorm of controversy.After briefly retracing the jurisprudential path to see how this situation arose, we propose a solution that primarily involves a variation on the real property concept of adverse possession for the intellectual property space along with a slight extension of the Essential Facilities Doctrine for industries that exhibit network effects. We examine, both for firms with and without market power, how our proposal would resolve the situations presented by large fixed asset purchases, the introduction of entirely new products, and operating systems with network effects. We also demonstrate how our proposal could be applied in the European antitrust enforcement context.

Law, Management, and Strategy: Collapsing Boundaries and Managing the Interstices

Law undergirds the capitalist system and is “at the interface” of business and social relationships but remains largely walled off from many traditional approaches to management education, scholarship, and practice. Although a simple definition of law is “enforceable rules between individuals and individuals and society,” law is also a medium by which relationships among and obligations between management and internal and external stakeholders are negotiated and formalized. Law can also drive (or impede) innovation by creating new rights (or burdening new business models with undue regulation) and promote (or prevent) social change by setting the boundaries for acceptable corporate actions. Legal rules for disclosure and corporate governance can and have changed the rules of engagement between organizations and their internal and external stakeholders. Environmental regulations, complemented by responsible corporate decision-making, can profoundly affect the long-term viability of industries and of humans’ ability to coexist with the natural environment. Law, and management of legal dimensions of business, should be seen as inseparable from strategy, ethics, stakeholder engagement, and sustainability. This interdisciplinary panel includes both legal and management scholars who focus in their teaching and research on these topics. As a matter of execution, this panel will also be at the interface: roughly half the time is budgeted for Q&A and conversation with attendees, moderated with a clear goal in mind. The goal is to stimulate awareness and actionable “take-away” ideas that (1) involve law and (2) relate to the teaching, research, and practice of strategy, business ethics, stakeholder engagement, and sustainability.