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The Nature and Function of Patentability
Long-term Overseas Research Fellow: Shimanami, Ryo (*)

This study analyzes the subject matter of patent rights from three perspectives, which are functions,principles, and morality. Chapter I takes a look at the function each requirement plays in demarcating thepatentability. It discusses that the patentability is and should be decided not only from the technology perspective,
but also from various viewpoints including policy, economy, and morality, by focusing on the concept of a person
skilled in the art, which plays a particularly important role in demarcating the patentability. Chapter II takes alook at theoretical grounds for justification of the patent law. It emphasizes the need to consider a perspective ofpromoting use of invention in addition to the conventional perspective of promoting invention. The chapter
reveals that such an approach will result in opening up a new prospect also for the various arguments on
patentability such as the dichotomy between inventions and discoveries. Furthermore, Chapter III takes a look at
the morality aspect that the patent law has come to face more radically along with the progress of biotechnology inparticular. It examines how the subject matter of patent rights can be defined from the public order and morality
point of view.

Introduction
This report sums up three studies on thesubject matter of patent rights, which are
discussions about objects that are patentable. While
all three studies are on the subject matter of patentrights, they approach the theme from different
perspectives, which are functions, principles, andmorality, as indicated by their titles.
Chapter I takes a look at the function eachrequirement plays in demarcating the patentability.
It discusses that the patentability is and should be
decided not only from the technology perspective,
but also from various viewpoints including policy,
economy, and morality, by focusing on the conceptof "a person skilled in the art," which plays aparticularly important role in demarcating thepatentability.
If considerations from the policy, economic,
and morality perspectives were essential for
demarcating the patentability, the next necessary
step would be to gain a viewpoint on the policy
objectives to which the patent law is regarded tocontribute in order for patents to be justified. Thus,
Chapter II takes a look at theoretical grounds forjustification of the patent law. It emphasizes theneed to consider a perspective of "promoting use of
invention" in addition to the conventional
perspective of "promoting invention." The chapter
reveals that such an approach will result in opening
up a new prospect also for the arguments on
patentability.
Furthermore, Chapter III takes a look at the
morality aspect that the patent law has come to face
more radically along with the progress of
biotechnology in particular. It examines how thesubject matter of patent rights can be defined fromthe public order and morality point of view.

Chapter Ⅰ
From the Perspective of Functions
1. The Japanese Patent Law often refers to "aperson with ordinary skill in the art to which theinvention pertains," in other words, "a person
skilled in the art" as referred to in studies. For
example, this term is used with respect to theinventive step requirement for patent registration,
the enablement requirement in disclosing an
invention, as well as the obviousness-of-replacement
test and the prior-art limitation for the doctrine ofequivalents. These indicate that the concept of aperson skilled in the art serves as a standard forvarious determinations in the respective phasesfrom the filing of a patent application to patent
infringement, and it is an important fundamental
concept that is used throughout the Patent Law.
However, in Japanese patent law studies to date,there has been no study that has madecross-sectional research on the significance andfunctions of the concept of a person skilled in theart across the various application scenes as above.
In fact, there is an accumulation of practicalprecedents with regard to a person skilled in the art
in individual application scenes and for therespective technical fields, but conventional
research had merely summarized and categorized
those precedents.
Therefore, this chapter clarifies the function of
the demarcating process of a person skilled in theart under the Patent Law, and derives necessary
viewpoints for the demarcation, consequently(*) Graduate School of Law, Kobe University

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indicating that the patentability should not only be
decided from a technical perspective but also fromvarious policy perspectives. To this end, thechapter refers to court decisions and academic
theories in U.S. patent law studies. In the UnitedStates, discussions have been made on the conceptof a person having ordinary skill in the art(PHOSITA), which corresponds to a person skilledin the art in Japan, and interesting developmentsthat are not seen in Japan can be observed. Thus,
firstly, how the various concepts of a person skilledin the art in the United States are demarcated withrespect to the enabling requirement and thenonobviousness requirement for invention will be
confirmed based on court decisions by the Court ofAppeals for the Federal Circuit (CAFC) related to
DNA inventions, among others. Then, the generalfunctions and the required viewpoints for thedemarcating process of a person skilled in the art
will be examined by referring to recent academic
theories, in particular, articles written by Professor
Merges.
2. The views derived from these analyses can besummarized as below.
Firstly, among the requirements fordemarcating the patentability, the nonobviousnessof an invention, which is an issue of therequirement for protection, and the enablement of
an invention, which is an issue of the scope ofprotection, are inversely related to each otherthrough the concept of a "PHOSITA" With regard to
DNA inventions, CAFC takes a relaxedinterpretation of the requirement for protection anda strict interpretation of the scope of protection as aresult of estimating the technical level of a
PHOSITA lower than the actual technical situation.
Such trend of court decisions is subject tocriticisms from technical and policy viewpoints.
However, the nonobviousness requirement can also
be considered effective for activating R&D
investment in highly uncertain technology andachieves more efficient resource allocation(considering the marginal behavioral decision ofindividual researchers engaged in R&D).
Considering the economic uncertainties involved inbiotechnology, there is a need for strong
inducement to R&D investment in the field. Thus,
relaxation of the nonobviousness requirement
through a low estimation of the technical level of a
PHOSITA is one of the available options. At thesame time, considering the nature of biotechnology
to rely on basic science and from the public interest
viewpoint, it is necessary to limit the scope ofprotection of the patent rights by requiring
particularly detailed disclosure of the inventions.
These analyses derive the conclusion that the
court's stance to set the technical level of a
PHOSITA low with regard to DNA inventions isreasonable from the normative point of view. In
addition, the patentability under the patent law
should be demarcated not merely by the actualtechnical situation, but also from a multi-faceted
viewpoint including the economic perspective andthe public interest perspective, through the conceptof a person skilled in the art.

Chapter Ⅱ
From Perspective of Principles
1. This chapter also examines the patentablesubject matters by focusing on the relationships ofthe issue with "discussion on the grounds forjustification of the granting of patent rights."
A classical and most general view of the
discussion on the grounds for justification of the
granting of patent rights in Japan today is the
incentive to invent theory, that is, a view that the
grant of patent rights by the government is justified
as an incentive to create inventions. Accordingly,
after intrinsically studying this incentive to invent
theory, the chapter presents questions from threeperspectives on the frequently observed
discussions on patentability based on the incentive
to invent theory-for example, a discussion that a
specific object should be considered as a patentablesubject matter because an incentive should begiven to its production.
Specifically, the chapter says that the systemof the patent law cannot necessarily be explained
solely based on the incentive to invent theory due
to the following reasons: (i) the scope of the
incentive to invent theory does not fully cover
general cumulative technical innovation, though itcovers single-shot technical innovation; (ii) thescope of information of which production should beincited is broader than the scope of patentablesubject matter under the patent law, and (iii)conversely, the patentable subject matter under thepatent law also includes objects that are produced
without the special incentive of patent rights.
Based on the fact that strong objections havebeen made against the incentive to invent theory byempirical studies in economics, the trends of theongoing research issues concerning the basic
theory of the patent law in the United States arereviewed by classifying the issues into thefollowing three: (i) the research issue related to thequestion of in what conditions patent rights act
effectively as an incentive to invest in research anddevelopment; (ii) the research issue of why
companies that do not attach much importance tothe obtainment of patent rights as a means ofcollecting research and development investment
file patent applications; and (iii) the research issue
related to grounds for justification of the granting ofpatent rights-why the granting of patent rights isoriginally admitted.

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2. Based on this, the report introduces the "theoryof promoting utilization of inventions" and examines
how the patentability will be demarcated by relying
not only on the traditional incentive to invent
theory, but also on the theory of promoting
utilization of inventions. As a result, the following
were indicated based on the premise that, as animportant starting point, the work of delimiting thepatentability is nothing but an activity of sorting out"technology of which transfer, additional researchand development, and enjoyment by society should
be promoted, by using the patent law as a tool."Firstly, regarding the distinction between
inventions and discoveries, for "inventions" that aretechnologies close to application to society, efficient
resource allocation can be rather achieved by
granting patent rights and making them privatized,
while for "discoveries," which are principle
technologies far from application to society,development competition toward application tosociety based on discoveries is rather promoted by
not granting patent rights and making thempublic-owned. However, even "discoveries" (spoken
as an everyday term), such as a mere substance orgene sequence information, should exceptionally be
the subject of a patent right if a means of theirapplication to society (for example, their functions)is obvious.
Secondly, regarding the patentability of
medical methods, an act of treatment has been
considered unfit for technological developmentcompetition for profit in the past. However, if
whether or not a patent is granted is not related toresearch and development bodies' choices ofactions for the moment, there is no principle reason
for denying the patentability of treatment methods
as long as they are among the specific technologies
of which application to society at the earliest date israther desired. On that basis, it is necessary to
restrict the exercise of patent rights that are
actually likely to inhibit application to society, forexample, to place working by doctors, etc. outside
the subject of injunction and compensation fordamage.
Thirdly, the public order and morality clause ofwhich the scope of application is under discussion
can be considered as follows. According to the
incentive to invent theory, it is possible to argue
that: even if technology is undesirable for society, it
will be sufficient if its application to society isblockedby
imposing
administrative/police
regulations extrinsic to the patent law with a focus
on its utilization. However, if patent rights function
to promote the application of inventions to society
and thereby the granting of patent rights isadmitted, the granting of patents for technologythat should not be applied to society should bedenied based on the intrinsic principle of the patentlaw without awaiting regulations extrinsic to the

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patent law. On the other hand, in the case where an
illegal act/act of violating public order and morality
lies not in an invention but in the mere process ofinventing (for example, an invention completed byusing a stolen reagent), the granting of patentrights will be affirmed since grant of patent rights
does not foster a relevant illegal act because it only
promotes use of the already made inventions
according to the theory of promoting utilization of
inventions.

Chapter Ⅲ
From the Perspective of Morality
1. Chapter III examines how the patentability isdemarcated from a public interest viewpoint,
particularly in terms of moral limitations. Specially,
the chapter analyzes and conducts comparative
study on how the countries advanced inbiotechnology, specifically, the United States,
Europe, and Canada, have handled biologicalinventions. Fortunately, these three countries andregion all have accumulated discussions on thesame invention relating to an animal called theHarvard Mouse. (This mouse, which was developedby the medical professor of Harvard University
through genetic engineering in the beginning of the
1980s, is "susceptible to cancer" and deemed to be
useful for experiments conducted to identify theprocess of the development of cancer anddeveloping cancer medicine.) There was a clear
contrast between the conclusions derived in therespective countries/region as below.
2. In the United States, the requirements that could
function as grounds to refuse to grant a patent for
an immoral invention are "utility" and "subject
matter." However, in current patent registration
practice, the utility requirement in effect hardly
plays a role as a registration requirement.
Meanwhile, the subject matter requirement tends
to be operated as being unrelated to morality since
the U.S. Supreme Court judgment in the
Chakrabarty case in 1980, which held that thescope of patentable subject matters includes
anything under the sun that is made by man.
Later in 1988, in connection with the invention
relating to the Harvard Mouse, a patent right for"all mammals excluding human beings" with thesame gene susceptible to cancer was granted in the
United States in 1987. Since then, a number ofpatents have actually been granted for varieties (orbroader categories) of animals reproduced throughgenetic engineering. Today, in the United States, it
is obvious that the scope of patentable subject
matters generally include a wide range of life forms
including animals.
The question is whether there is any limit tosuch a permissive attitude toward the patenting of● 118 ●

life forms, and in this respect, a dispute wasprovoked over the technology of reproducing
human/animal chimera through genetic engineering,which is undesirable to human beings and raises a
morality problem. Receiving this chimera
application, in 1998, the U.S. Patent and Trademark
Office (USPTO) issued a media advisory entitled"Facts on Patenting Life Forms Having a
Relationship to Humans," expressing thatinventions directed to human/non-human chimera
could, under certain circumstances, not bepatentable because they would be contrary to publicorder and morality and lack utility, which is one of
the requirements for patent registration. However,considering that technological development has
been advancing at a higher speed than operationaldifficulties (due to the vagueness of the standard)
and theoretical problems are being solved, the
USPTO's policy mentioned above should be
deemed to be far from effective in reality. The
development of human cloning technology is
prohibited in the field of embryonic stem cellresearch and inventions directly relating to humanbeings cannot be patentable in accordance with theconstitutional provisions on slavery, but inventions
relating to life forms other than human beings
would be very likely to be patented in the Untied
States unless legislative measures are taken toprohibit the patenting of such inventions.
3. In Europe, the convention on the grant ofEuropean Patents (European Patent Convention:
EPC) already includes an explicit provision on
morality (Article 53). In other words, if inventions
that satisfy the patent requirements (Article 52),
such as novelty and involvement of an inventive
step, fall under (a) inventions the publication or
exploitation of which would be contrary to ordre
public or morality and (b) plant or animal varieties
or essentially biological processes for the
production of plants or animals, this fact would be
not only an ex ante ground to refuse to grant apatent right for such inventions but also an ex post
ground to revoke the patent rights that have been
granted.
In Europe, the "Directive on the Legal
Protection of Biotechnological Inventions" wasadopted in 1998. First, as for patenting life forms,
inventions relating to plants and animals per se,
which were clearly considered to be unpatentable in
the past, shall be patentable if the technicalfeasibility of the invention is not confined to aparticular plant or animal variety. Second, as forpatenting the human body, while elements of thehuman body such as an embryo and genesequences per se shall not be patentable, suchelements may be patentable if they are isolated
from the human body by means of a technicalprocess, even if the structure of the element is

identical to that of a natural element. Third, if
inventions of processes, which are deemed to bepatentable in accordance with the rules mentioned
above, are likely to cause suffering to animals
without any substantial medical benefit to humanbeings and animals, and modify the genetic identityof animals, such inventions must be excluded frompatentability. These rules set forth in the Directive
on biotechnology were introduced to the EPC in
June 1999. Consequently, the provisions set forth in
this Directive have become binding on theexamination process at the EPO.
At the EPO, the most radical dispute over the
relationship between patent rights and morality has
been seen, again, in the Harvard Mouse case. In
Europe, a patent application was filed not for theHarvard Mouse per se as an invention of a product,
but for the invention of the process of producing it.
In 1998, the EPO Examining Division once refused
the patent application, but in 1992, through areexamination, a patent was granted for thisinvention. In the reexamination, the EPO pointed
out that the following three types of interests
should be taken into consideration: (i) interests
achieved by developing technology to cure humandiseases; (ii) interests achieved by protecting theenvironment from uncontrolled proliferation ofundesirable genes; and (iii) interests achieved bypreventing animal abuse. The EPO listed relevantinterests for the three subjects, human beings,
environment, and animals, which might beconflicting with one another, and established aframework for drawing a conclusion by comparing
these interests. Within such a framework, the EPO
determined: the Harvard Mouse is beneficial to thedevelopment of cancer medicine and therefore it isconsiderably beneficial to the treatment of humancancer; the new gene that the Harvard Mouse has
will be used exclusively within the laboratory and it
will never diffuse in the natural environment; andthis invention has the possibility of saving not only
the transgenic mouse but also many other animals
from cancer, which will result in the salvation ofanimals as a whole.
Although several oppositions were filed bythird parties against the patent granted by the EPO,
in November 2001 the EPO finally granted a
European patent for this invention, while narrowing
the scope of the patent right. In this regard, theEPO offered the following views on "ordre public"
set forth in Article 53(a) of the EPC: (i) the existinglaws and ordinances allow using animals forexperiments, and this means that the working of
the claimed invention per se is not prohibited,
therefore the invention is not contrary to ordre
public; (ii) harm would not be caused to animals at
the time when the invention was worked but whena tumor is caused, and therefore the invention per
se does not directly cause harm to animals; and (iii)● 119 ●IIP Bulletin 2004

it cannot be denied that the invention is beneficial
to the development of cancer research. Accordingly,
the EPO concluded that the patenting of animals to
be used for experiments at laboratories would be inconformity with the Directive and Article 53(a) of
the EPC but a broad claim covering all nonhumanmammals could not be accepted.
4. Unlike in the United States and Europe, thepatentability of the Harvard Mouse was denied by
the Supreme Court of Canada. Single-cellorganisms such as yeast cell and bacteria,transgenic plants, and genetically-altered humangene sequences are patentable in Canada, but theSupreme Court denied the patentability of theHarvard Mouse by a close vote of five to four
(furthermore, by overturning the original judgmentof the Court of Appeals).
The grounds for the Supreme Court's decisionwere as follows: (i) the fact that the Patent Act in its
current state is ill-equipped to deal appropriately
with higher life forms as patentable subject matter
is an indication that Parliament never intended thedefinition of invention to extend to this type ofsubject matter (In this respect, the Harvard Mouseis different from the invention of a new variety ofplant for which a legislative solution was achieved.);(ii) although the definition of invention in the Patent
Act is broad, the court cannot however agree withthe suggestion that the definition is unlimited in thesense that it includes anything under the sun that is
made by man, as expressed by the U.S. Supreme
Court in the Chacrabarty case; and (iii) under the
Patent Act, the word "manufacture" denotes a
non-living mechanistic product or process whereas
injecting the oncogene into a fertilized egg is the
but-for cause of a mouse predisposed to cancer, but
the process by which a fertilized egg becomes anadult mouse is a complex process, elements ofwhich require no human intervention, thus, thecourt is not satisfied that the phrase composition ofmatter includes a higher life form whose genetic
code has been altered.
5. The following suggestions can be derived fromthe above practical handling of biotechnologicalinventions in the United States, Europe, andCanada.
First, when considering the relationshipbetween the granting of patent rights and morality,
the subject matter whose compliance with morality
is challenged should be clarified. More specifically,
information on natural phenomena (e.g. discoveries
and scientific views) should be clearly distinguishedfrom natural phenomena per se that exists as
information (e.g. gene information and businessmethods): the former is originally unpatentable (itcould be construed that the former does not fallunder the definition of "invention" set forth in

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Section 2(1) of the Patent Law because of lack of
the "use" of laws of nature) whereas the latter isaffirmed to be patentable, and then challenged withrespect to compliance with morality. If this process
is applied to an invention of a living thing, which is,
by nature, an intangible invention rather than atangible living thing per se, the invention is not
information on the living thing but a natural
phenomenon that exists as information. Therefore,
it seems to be inappropriate to deny a priori thepatentability of all inventions relating to life forms
as construed in the United States.
Second, what kinds of inventions are deemed
to be unpatentable on the ground of noncompliancewith public order or morality? As shown above, thisissue is handled differently depending on the
country. As for the patenting of life forms, only
inventions directed to human beings per se areunpatentable in the United States (therefore, life
forms except for human beings are generally
patentable) whereas in Europe, interests to beachieved by the development and use of theinvention are individually examined and comparedwith one another according to the entity entitled tosuch interests (therefore, some life forms except
for human beings are unpatentable). In Canada, on
the other hand, higher life forms in general areunpatentable. However, as clearly shown in thecase of human/non-human chimera, the scope of
exceptions from patentability would be too narrow
if it is limited to human beings (it would not be
neutral in terms of value to grant a patent right forthe development and use of a chimera, a new life
form that clearly does not fall under the category ofhuman beings). On the other hand, it would be
hardly justifiable for the Patent Law to treat
technologies the development and use of which are
not prohibited under the laws and ordinances or
excluded generally by social norms, such as a newvariety of mouse used for experiment,
discriminatorily from other technologies (justbecause they relate to higher life forms). Despite
the disadvantage of requiring a case-by-casejudgment, the balancing approach employed inEurope would still be appropriate.
Third, what would be a standard or frameworkfor such balancing? It is difficult to answer thisquestion, but at least the following can be pointed
out. It would be appropriate that, as seen in Europe,
the entities entitled to interests to be balanced may
include not only human beings but also animals andmore abstract entities, the environment. In thiscase, however, as is also seen in the practicalhandling in Europe, the interests to be enjoyed byentities except for human beings would beconsidered only abstractly or comprehensively. For
example, in the case of an animal used forexperiments, the interests to be enjoyed by the
animal would not be considered in light of the● 120 ●

suffering of the individual animal but only
considered from the viewpoint of preserving thespecies of the animal as a whole. As argued in the
United States, such handling could be justified(passively) only by the fact that animals are notentitled to human rights under the Constitution.
The evaluation criteria for balancing interests
would inevitably include, as pointed out in somecourt decisions in Europe, not only laws andordinances but also norms based on the culture andtradition of the society concerned. Where thedevelopment and use of the invention is regulated
by laws or ordinances for a police or administrative
purpose beyond the Patent Law, it is natural that
the Patent Law refrains from providing incentivesof the development and use, and it is also
assumable that the Patent Law does not intend forthe state to willingly provide such incentives even
if the development and use is allowable under laws
or ordinance.

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