Monday, December 26, 2005

Hwang, his patents, and the future

(Disclaimer: I am not a lawyer. Nothing in this post should be construed as legal advice or proper opinion. I am simply some idiot trying to make sense of things. Please consult proper legal counsel before making any decision.)

Yesterday I had a conversation with a blogger that made me realize I should have better defined a few points on my discussion recently on Hwang Woo-suk's patent portfolio in light of his fall from grace.

I stand by what I earlier asserted. According to Korean patent law, there is nothing that specifically prevents him from holding his patents, no matter how fake his research is. The patent covers the idea, not the implementation. Because Hwang's ideas are patented it does not matter if his invention is workable or if his work is fraudulent.

For example, let us say you patent an invention for flying. This invention consists of two large feathered wings you tie to your arms and flap in rapid succession while running off a cliff. This may very well be a patented idea (suspending the obvious prior art problems), and arguably scientifically valid. However, you are unable to work the invention, every time you jump off a cliff you break your arm. Your failure though does not take away from the fact you thought of an original idea that is scientifically possible.

However is it PLAUSIBLE? Is your idea commercially valid in such a manner your patent is valid? If somebody else makes it work, they may owe you a royalty. However if nobody can make it work, your patent (while valid) is useless. This is the quandary Hwang may be in right now,  if nobody can replicate (work) is experiments (invention) his patents may be useless.

Ironically, this may insure Hwang's patents stay valid. Ex officio (state sponsored) patent invalidation trials are unprecedented in Korea.  The only way Hwang will likely get his patents invalidated is if somebody takes the cost and time to file for trial. However for somebody to make such an investment (we can be talking about tens of thousands of US dollars), there would need to be a clear commercial benefit. However if the patents are worthless, there are no need to challenge them. Ipso facto, worthless patents stay valid.

There is a very important caveat to this, it depends how the patent is written. One of the assumptions of the above is the abstract "Hwang Patent" closely mimics his research. Unfortunately, life is always so neat. Patent claims are usually written in the broadest manner possible so as the recipient can claim any variety of things as related to his invention, and  thereby make the invention more valuable.

To go back to the feathered wing example, what if the patent read "A method to achieve flight using wings and forward motion"? Well this patent would cover everything with wings from airplanes to hang gliding. This would make the patent more valuable.

Now we get into the legal nitty-gritty, or as former President Bill Clinton famous said, "It depends what your definition of 'is' is". On one hand, the fact they are valuable make them more vulnerable to cancelation trials. On the other the broadness of the patent separates itself from the repudiated experimental work thereby strengthing the patent. In short, Hwangs commercial fate lies in the details.

Finally, something has to be said about the halo effect (for lack of a better metaphor). An article in the Joongang discusses the tailspin the local biotech industry is in. This perhaps is the greatest impact of Hwangs fakes, it will make everyone doubt the work of other Koreans. In the academic word, this manifests as skepticism, however in the commercial world it translates as risk. If you are investing billions on unproven technology and primary research you want as little risk as possible. Perhaps the real sad thing is not the fortune of some scientist, or Korea's national pride, it is the opportunity costs of it all. One talks about the "Korean Discount" in the stock market (the discount Korean stock have due to the risk of opaque practices) in cold cash terms, however a "Korean Discount" in the field of biotech may be the loss of a cure for something.


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