Introduction

On Tuesday, February 22, 1774, Lord Effingham Howard rose in the British House of Lords to declare that a perpetual common law copyright “might prove dangerous to the constitutional rights of the people”[1] because it could amount to government-sanctioned private censorship of communication.  The press, Effingham said, was the lone check on official abuse of power, but a despotic leader from government or monarchy could use copyright law to thwart freedom of the press and hide his own wrongdoing.  By purchasing the copyright in a work critical of himself and then preventing reproduction and distribution, the despot would be “securing in his closet the secret which might prevent the loss of freedom” and “choking the channel of public information.”[2]  Effingham concluded by “declaring…that the Liberty of the Press was of such infinite consequence in this country, that if the constitution was overturned, and the people were enslaved, grant him but a free press and he would undertake to restore the one and redeem the other.”[3]

Effingham’s remarks came at the conclusion of the final day of a nearly three-week legal appeal pitting hidebound London booksellers against an innovative Scottish newspaper owner and bookseller named Alexander Donaldson.  Effingham told his fellow lords—sitting as Britain’s highest judicial authority to decide the famous but misunderstood copyright case of Donaldson v. Beckett[4]—that he opposed the perpetual common law copyright sought by the London booksellers because the right would negatively “affect the Liberty of the Press.”[5]  In a defining and enduring precedent that retains relevance today in both the United Kingdom and the United States, Effingham and the majority of the other lords rejected the booksellers’ arguments and concluded that neither an author nor a printer could exercise copyright control of a creative work through a common law copyright after the statutory period of copyright had ended.  The House of Lords reversed an injunction that had barred Donaldson from printing and selling copies of James Thomson’s The Seasons without compensating the London booksellers who had claimed to own the perpetual copyright.

Notwithstanding its expansiveness and eloquence, Effingham’s statement has received relatively little attention from scholars and jurists.  This fact can be attributed in part to the idiosyncrasies of British case law reporting in the eighteenth century: the two most prominent reported versions of Donaldson v. Beckett do not even contain the speeches of Effingham or his fellow lords, confining themselves instead to speeches by lawyers arguing the case and comments by common law judges who were invited to advise the lords in making the ultimate decision.[6]

However, in its treatment of two recent cases decided more than two centuries after Donaldson, the U.S. Supreme Court has given scholars fresh reason to carefully re-examine Effingham’s warning about the dangers posed by copyright to free expression.  First, by tying application of First Amendment scrutiny to a test of whether Congress has altered the “traditional contours” of copyright law, the Court in Eldred v. Ashcroft[7] gave the matter of copyright history First Amendment importance.  Second, despite longstanding claims[8] that copyright law and the First Amendment did not conflict with one another due principally to copyright’s idea-expression dichotomy and the doctrine of fair use, the Court in its 2011 Term considered whether a provision of the U.S. Copyright Act should be struck down because it violated the First Amendment’s protections of freedom of speech.[9]  Thus, it appears, after decades of reluctance and much prodding by copyright scholars,[10] the federal courts are being dragged toward a realization that copyright law is not “categorically immune from challenges under the First Amendment.”[11]

In Golan, those challenging the Uruguay Round Agreements Act as a violation of the First Amendment contended that “[h]istory and tradition tell a different story” with respect to Congress’ removal of works from the public domain than with the series of copyright term extensions culminating in the Sonny Bono Copyright Term Extension Act that was challenged in Eldred.[12]  In advancing their argument that “Section 514 privatized public speech rights,”[13] the petitioners noted that the House of Lords in Donaldson“held the time limitations in the Statute of Anne cut off any common law copyrights the stationers might have held in published works.”[14]  The Government, meanwhile, argued that the Uruguay Round Agreements Act did not alter the traditional contours of copyright law, and thus no First Amendment scrutiny should be applied.[15]  This argument hinged in part on the contention that, when Congress passed the first Copyright Act in 1790, it took many works out of the public domain and brought them within copyright protection.[16]  Hence the question in Donaldson—whether works could have common law copyright protection even after statutory protection has expired—remains relevant today.

This article contends that understanding the “traditional contours”[17] of copyright law requires more than superficial references to modern fair use and the idea-expression dichotomy.  A careful reading of eighteenth-century sources reveals concerns that copyright threatened the structure of mass public communication that emerged after the system of licensing expired in the late seventeenth century.  Although eighteenth-century political philosophers, lawmakers, and jurists may not have had a modern conception of individual free speech rights as they came to exist under the First Amendment, at least some of those early policymakers and commentators did appreciate the value of communication unfettered by public or private censorship and control.[18]

In this article, the relationship between copyright and free speech is explored through a re-examination of the Donaldson v. Beckett case.  In Part I, the article reviews what modern scholars already have said about Donaldson as it relates to the eighteenth-century relationship between freedom of the press and copyright.  Parts II and III re-examine accounts, primarily in newspapers, of the Donaldson decision in the House of Lords in 1774.  The news accounts reveal some concern for the implications the case would have on freedom of the press, a topic that greatly affected the late eighteenth-century newspapers themselves.  Based on a close re-examination of contemporary accounts ofDonaldson, Part IV presents considerations for today’s federal judges when applying—as they may be asked to do more frequently in light of Eldred and Golan—the “traditional contours” test championed by Justice Ginsburg’s majority opinion in Eldred.  The article’s conclusions are applicable to Golan and should be of relevance to future disputes about copyright and free speech.  

I. Scholarly Views on Donaldson v. Beckett

Generally speaking, American scholars and jurists have exhibited a relatively superficial and poor understanding of Donaldson v. Beckett.[19]  Some of these misperceptions are understandable in light of the confusion and errors found in the supposedly authoritative eighteenth-century legal reports of Donaldson.  In the history of American perceptions of the debate over English common law copyright, special mention must be given to James Madison’s The Federalist No. 43, first published in New York newspapers in early 1788.[20]  In No. 43, Madison argued that the proposed federal government should have exclusive jurisdiction over copyright law, a topic that most of the colonies already had addressed in their own laws.  In doing so, Madison wrote that the proposed Constitution’s Copyright Clause[21] created a federal government power that “will scarcely be questioned” and that “[t]he copyright of authors has been solemnly adjudged in Great Britain to be a right of common law.”[22]

Written as it was in 1788, it is unclear whether The Federalist No. 43 accurately reflected all developments in English law up to that point, including the decision inDonaldson 14 years earlier.[23]  However, even if Madison’s description of the state of English common law would be considered mistaken today, it would be difficult to fault him for restating the understanding of his time.  Due to an error in the reporting of advisory opinions by common law judges,[24] Madison and his contemporaries understandably could have described Donaldson as holding that a common law copyright did exist.  It must also be recalled that Madison’s Federalist No. 43 was a rhetorical and propaganda device to persuade colonists that the proposed Constitution’s Copyright Clause was in line with their common law history, and therefore it was in Madison’s interest to say that British common law included copyright protection.[25]  In addition, the 1783 edition of Blackstone’s Commentaries, which would have contained a report of Donaldson, may not have been available to colonial lawyers until after the Revolutionary War, and so American colonists may have continued to apply the precedent of Millar v. Taylor long after British judges had abandoned it in Donaldson.[26]

While Donaldson has been called a case in which there was an answer but no rationale,[27] some modern scholars have argued that the real logic of the case was that common law copyright did not exist.[28]  If it is the case that Donaldson stood for the fact that a common law copyright did not exist, then Madison—like Burrow, the official case reporter—got it wrong.   Madison’s mistaken belief was then cited by the influential early U.S. Supreme Court case Wheaton v. Peters.[29]

In the course of its opinion in Wheaton, the Supreme Court discussed Donaldson but may have perpetuated several errors.  In Wheaton, the Court had to determine whether a common law copyright, if it existed in the United States, had been violated, as well as whether a violation of the U.S. Copyright Act had occurred, in an infringement claim involving the copying of its own reported decisions. Having cited and relied exclusively on Burrow, which did not contain the speeches of the lords, the Supreme Court mistook the advisory opinions of the common law judges for the rationale of the case.[30]  Second, again relying on Burrow, the Court was misled into thinking that six of the 11 advisory judges had said the common law copyright was superseded by the Statute of Anne,[31] when in fact six of the 11 judges (the difference being Nares, whose vote was misreported in Burrow) had said the common law copyright was not superseded by the Statute of Anne.  Hence Wheaton mis-described the holding of Donaldson in a way that would be followed many times subsequently by jurists and scholars.  In the end, Wheaton concluded that while there was a common law right of first publication, there was not a perpetual common law copyright in the United States that would continue to exist after publication; at the point of publication, the rights available to an author were through the Copyright Act alone.[32]

The author and three graduate students reviewed all 271 journal and law review articles in the U.S. version of Westlaw’s “Journals and Law Reviews” database that citeDonaldson v. Beckett (or Becket, as the spelling is sometimes rendered).[33]  The review demonstrated significant confusion in the legal scholarship over the rationale and holding of Donaldson and showed that at least some of this confusion comes from errors and omissions in the eighteenth-century legal reports.  Nearly 80 percent of the U.S. law review articles cite only to Burrow, only to Brown, or to Burrow and Brown together.  Although they are the most common versions of Donaldson to be cited, Burrow and Brown are the least comprehensive and least accurate of the five reported versions of the case.[34]  It has been well-documented by Abrams,[35] Deazley,[36] and Rose[37] that Burrow perpetuated an error regarding the vote of a judge named Nares, and that has had a significant impact on how the case has been perceived during more than 235 years.

Burrow does not include the speeches by the lords, and Brown does not report the speeches by either the lords or the judges.  Thus neither of them is particularly useful in actually understanding the rationale of Donaldson.  The fact that Burrow reports the speeches by the judges but not the lords has contributed to the tendency of some American scholars, accustomed to reading judicial rationales in written opinions, to mistake the advisory opinions of the judges for the binding logic of the lords, the ultimate decision-makers in the case.[38]  Only about 12 percent of American legal journal articles cite the Parliamentary History, the Gentleman’s Report, or the Anonymous Report, even though those versions of the case are more accurate and complete than either Burrow or Brown.  Nearly 10 percent of the articles discussed Donaldson but cited no version of the actual case; instead, these articles either cited no source or cited a secondary source, such as a journal article or book, in referencing Donaldson (see Appendix).

Modern American legal scholars describe the holding of Donaldson v. Beckett in three major ways (see Appendix).  About a fifth of the articles said the case held that no common law copyright existed at all.  This is the meaning of Donaldson that has been most recently advocated by experts who have closely examined British copyright history, including the British scholar Ronan Deazley.[39]   Meanwhile, another fifth of the articles focused their description of Donaldson on the general idea that publication of a work cut off some form of common law right.  The third major description of the case by journal authors was that Donaldson held or recognized that common law rights were superseded by the Statute of Anne; some form of this description was present in nearly 30 percent of the articles.  The remaining articles either did not describe the holding or merely noted the confusion surrounding Donaldson’s meaning.  In summary, then, as many as half of American law journal article authors seem to have misunderstood that the House of Lords decided against the common law right.

Of course, there are notable exceptions to the general rule that American scholars have struggled to understand Donaldson.  For example, Mark Rose, an English professor at the University of California at Santa Barbara, has written extensively and perceptively about the history of copyright, and discussed the importance of the Donaldson case for understanding British and American roots of copyright law.[40]  Before Rose, Howard Abrams wrote that, had the U.S. Supreme Court justices truly understood Donaldson v. Beckett at the time they decided Wheaton in 1834, the path of American copyright law may have been altered significantly.[41] And before Abrams, Lyman Ray Patterson conducted a sophisticated review of copyright law history including Donaldson.[42]

For the most part, however, these authors have not discussed Donaldson in the context of what it offers for understanding the eighteenth-century view on the relationship between freedom of the press and copyright.  Rose, for example, only briefly mentions Effingham’s speech in two sentences.[43]  Abrams gives similar cursory treatment to the Effingham statement.[44]  Deazley, though, noted Lord Effingham Howard’s “fear . . . of unchecked political suppression” and also pointed out that Effingham was not the first eighteenth-century English jurist to express concern that copyright might interfere with public communication.[45] Deazley noted that, in an earlier case brought against Donaldson by London booksellers, Lord Chancellor Northington declined to extend an injunction against Donaldson because, in his observation, a “perpetual property” in books “would give [booksellers] not only a right to publish, but to suppress too,” and, Northington said, “this would be a fatal consequence to the public.”[46]

Many scholars have written well about the general relationship between copyright and free speech.[47]  A smaller number of these analyses have cited Donaldson in contribution to the historical understanding of that relationship,[48] but very few American scholars have discussed Effingham’s speech specifically.  Among those that have done so, Diane Leenheer Zimmerman wrote that Effingham voiced a “modern-sounding concern” about freedom of the press.[49]  In another article, Zimmerman wrote that although the general understanding of copyright law in the eighteenth century focused on societal goals and benefits rather than individual rights, Effingham stood out for his effort inDonaldson to champion the cause of individual rights in the face of a potential perpetual copyright monopoly.[50]

Mark Rose pointed out, in the context of a discussion about Eldred, that Effingham and others in the eighteenth century recognized that “treating writing simply as property,” rather than constitutionally protected expression, would lead to the private control of printing through copyright law in much the same way the government previously controlled printing through licensing.[51]  Effingham, Rose said, urged “that affirmation of a common-law right of literary property could provide a dangerous foundation for censorship.”[52]

Effingham’s hypothetical about a despotic prince or minister using copyright law to suppress information contrary to his own interests “might appear somewhat far-fetched at first glance,”[53] Zimmerman wrote, but in reality, Effingham proved prescient.  Zimmerman cited the examples of Howard Hughes, L. Ron Hubbard and J.D. Salinger, who—while not exactly despotic ministers and princes—were influential figures who attempted to use modern copyright law to suppress undesirable information about themselves.[54]  Queen Elizabeth II famously extracted a front-page apology and a £200,000 charitable donation from Rupert Murdoch’s Sun newspaper after she threatened to sue for copyright infringement because the newspaper published the text of her Christmas Day 1992 address two days early.[55]  “Public pronouncements do not belong to anybody,” the newspaper’s editor had complained futilely.[56]  Indeed, in today’s world, “aggressive copyright claims” may often succeed in silencing a political or commercial rival through the use of preliminary injunctions even though a substantive infringement claim might be weak.[57]

II. Alexander Donaldson and the Crusade Against Speech Monopoly

Alexander Donaldson’s background proves beneficial in explaining the context in which he rose to prominence and became involved in not just one case, but in a series of copyright litigation efforts.  Even before Alexander Donaldson was born, his grandfather experienced firsthand the perils of publishing a newspaper without broad legal and societal free press guarantees.  Capt. James Donaldson already was a satirical poet and author of several pamphlets when, in 1699, he received permission from the Privy Council to begin publishing the Edinburgh Gazette newspaper.[58]  He was briefly jailed at one point for publishing false statements, but gained his release upon promising to allow the Privy Council to censor his newspaper in the future.[59]  Capt. James Donaldson’s grandson, Alexander, entered the bookselling business in 1750, while still in his early twenties.

With John Reid, Alexander Donaldson owned and operated a bookshop in Edinburgh.  He also ran a bookshop in London with his brother John, until their partnership dissolved in 1773.[60]  Donaldson forged a reputation, as a bookseller, for selling cheap editions of books for which the statutory period of copyright had expired.  This made him the subject of both praise and criticism, and he was even compared to Robin Hood for his efforts to disseminate previously copyrighted information at low cost.[61]

Donaldson launched the Edinburgh Advertiser with Reid in 1764, and served as editor and publisher of the newspaper until the beginning of 1774, when he turned the operation over to his son, James.  Donaldson’s launch of the Advertiser was attributed to his public-spiritedness and enterprising nature, as he recognized a commercial opportunity.[62]  On the first page of the first edition, dated Tuesday, January 3, 1764, Donaldson and Reid wrote that the Advertiser was intended to be published on Tuesday and Friday to take advantage of the fact that no other newspapers were printed in Edinburgh on these days, yet mail delivery arrived from London on these days and so there was news to convey.[63]  In stating their purpose of publishing the newspaper, Donaldson and Reid wrote:

Beside what are properly called news, the editors will give the utmost attention to whatever regards religion, trade, manufactures, agriculture, and politics in Great Britain, and Ireland, and the colonies thereto belonging; and will be careful to insert the best and most accurate accounts they can procure of all important transactions, interesting anecdotes, and useful discoveries, in every part of the British dominions. Nor shall the article of Entertainment, for which there is so large a demand, be unregarded. Essays on useful, ingenious, and entertaining subjects, both in prose and verse, if well wrote, and of moderate extent, will be thankfully received and readily inserted.[64]

On the first day of publication, Donaldson and Reid criticized the other Edinburgh newspapers, all of whom refused to publish an advertisement announcing the launch of the Advertiser.[65]  Within two months, Donaldson and Reid gave a lengthy invitation to and justification of advertising, saying that old notions about the disreputable nature of having one’s personal or business name appear in a public print should be discarded.[66]  The editors defended the value of the London Gazette, an official government newspaper, which may not have had independent editorial copy but did, they said, communicate some news and advertising to the public and also had spawned other, independent, newspapers throughout Great Britain.[67]  The Advertiser was printed in quarto size, and, with an index published every six months, could be bound and preserved, thus enhancing its shelf life and value to readers and advertisers.  Within six months after its first publication date, the Advertiser was apparently financially stable and had been received well throughout Scotland; in writing to thank his subscribers and advertisers, Donaldson recommitted himself to “the utmost care . . . to insert the best essays and most interesting articles of intelligence that may occur.”[68]

In his public writings as editor of the Advertiser, at least, Donaldson’s concern for profits eventually subsided in favor of a focus on editorial quality and independence.  By the end of 1764, Reid had left the Advertiser and Donaldson remained alone as editor and proprietor.  On the final day of 1771, he wrote a remarkable letter to readers acknowledging that newspapers might make mistakes, but asking readers to forgive them and warning government officials to refrain from both censuring and censoring:

If we have occasionally married couples without the privity of friends or relations, without the publication of banns, or even the consent of the parties themselves, it can be no secret to our fair readers that frequent examples of matrimony are absolutely necessary in this licentious age. If we have sometimes dismissed people of quality from the world, without asking leave of the college of physicians, the joy of their friends will prove the greater when they are raised to life in the succeeding paper. If we have been sometimes more in haste to decide a cause than the lawyers themselves, we have thereby placed before them an example, which all ranks of his Majesty’s subjects would concur in recommending to their notice. In fine, if we have given children to the barren, riches to the poor, or preferment to the undeserving, we have only done that for them, which intrigue, chance, or interest will frequently bring about; with this advantage in favour of all parties, that the progeny we bestow will cost nothing in education, the wealth we dispense may be retained without care, and the honours we confer be received without disgrace to the donor. As fickle as is fortune, we are favourable to all in their turn, and (as Macheath says) the wretch of to day may be happy to morrow)—in the EDINBURGH ADVERTISER.[69]

Donaldson continued by writing that the Advertiser was “open to all parties and influenced by none,” mentioning specifically that some had accused his editorial approach of having been “too ministerial” while others charged him with being too critical of British government ministers.[70]

In 1764, Donaldson publicly distributed an essay uncovering the scheming ways of London booksellers against Scottish booksellers like himself.  Attached to the essay, Donaldson also published the text of several letters from London booksellers that exposed their schemes.[71]  Letters by this time had been judged to be the intellectual property of their authors,[72] and so this act by Donaldson both provided the potential for a copyright infringement lawsuit and represented a manifestation of his belief in freedom of the press from private control.  Donaldson was determined to invest in copyright litigation in order to protect future bookselling opportunities, and he pursued litigation vigorously.

The Court of Session, Scotland’s highest court, decided in Donaldson’s favor on July 28, 1773, in a copyright case brought by a London printer named John Hinton.[73]  Hinton had sued Donaldson for copyright infringement after Donaldson and other Scottish printers published approximately 10,000 copies of Thomas Stackhouse’s A New History of the Holy Bible between the years 1760 and 1770.[74]  The Scottish court held that there was no perpetual common law copyright, or right of “literary property,” and that Donaldson had not infringed the Statute of Anne because the statutory copyright term for Stackhouse’s work had expired.[75]  Later, in the run-up to the House of Lords’ hearing in Donaldson v. Beckett, Donaldson used his newspaper, as well as advertisements in other newspapers, to publicize his victory over Hinton.  Donaldson paid for advertisements in the classified ad section of London newspapers announcing that he was selling copies of the Scottish Court of Session decision.[76]

Eleven of the twelve Court of Session judges[77] who gave their opinions in Hinton favored Donaldson, and for several of them the only reason for pause was an English Court of King’s Bench decision issued in 1769.  In that case, Andrew Millar sued Robert Taylor for publishing unauthorized copies of the poem The Seasons by James Thomson.[78]  After hearing arguments on behalf of the booksellers by the famous legal commentator William Blackstone, the Court of King’s Bench relied on a series of licensing acts, the system of letters patent granted by the Crown, the prerogatives and processes of the Stationers Company, and several Chancery Court injunctions to conclude there was a common law right of literary property.  Lord Chief Justice Mansfield, a recognized authority with whom even the Scottish Court of Session judges were loath to disagree, delivered the holding that the common law right existed “before and independent of” the Statute of Anne.[79]  Taylor was enjoined from printing or selling copies of The Seasons.[80]

As with Millar v. Taylor, the case of Donaldson v. Beckett was brought by London booksellers for unauthorized publication of Thomson’s The Seasons.[81]  On the same day Donaldson’s classified advertisement was published, one of the newspapers in which it appeared also published in its editorial columns a report that lawyers representing Donaldson before the House of Lords had requested the beginning of arguments in the case be delayed a week until Friday, February 4, 1774.[82]   Intended or not, the delay gave Donaldson the opportunity to print and begin selling copies of the Scottish Court of Session decision in Hinton prior to the House of Lords’ hearing.[83]

The Public Advertiser, the newspaper that published both the classified advertisement and the editorial report about Donaldson, had lifted its editorial copy about the case verbatim from another London newspaper, the Morning Chronicle and London Advertiser.  In fact, much of the content of eighteenth-century London newspapers consisted of passages reprinted from other newspapers, both foreign and domestic.  News content was expressly not protected by copyright under the Statute of Anne, and the London newspapers reporting on the great eighteenth-century literary property debate culminating with Donaldson v. Beckett borrowed liberally from one another’s editorial columns.  This tendency for newspapers to print verbatim copies of others’ material—as well as the public anticipation for the House of Lords’ consideration of Donaldson v. Beckett—was on clear display in the first days of February, 1774, when at least three London newspapers said the case “materially affects the Literature of this Country, as well as the Property of many Individuals, to an immense amount.”[84]  One newspaper, the Morning Chronicle and London Advertiser, took such interest in the case that it printed transcripts of the proceedings for nearly three weeks and, even before the arguments began, reproduced Lord Mansfield’s lengthy opinion given five years earlier in Millar v. Taylor.[85]

III. Donaldson v. Beckett Re-Examined

Given the importance of Donaldson v. Beckett as well as the misunderstandings surrounding it, a detailed review of the facts and legal arguments in the case seems to be in order.  This is particularly so in light of the importance placed on copyright history by the Supreme Court in Eldred and the task before the Court in its 2011 Term case of Golan.  This re-examination relies heavily on contemporary newspaper accounts, a source not made the subject of original examination by most copyright history scholars, with the exception of Rose.  Even Rose discussed only a small number of the scores of articles published about the case in London and Edinburgh newspapers in January and February of 1774.  The newspaper articles provide a particularly relevant accounting of the case, given that Donaldson was a newspaper publisher and that they reveal the newspapers’ own perspectives about freedom of the press in the first century after the expiration of government licensing.[86]  Furthermore, Donaldson v. Beckett appears to have been one of the first judicial proceedings in the House of Lords covered “gavel-to-gavel” by newspapers.[87]  Before it came to the House of Lords, the case of Donaldson v. Beckett had been heard first in the Court of Chancery.  Upon initial filing of the case in 1771, a temporary injunction was granted, and the injunction was made permanent in 1772 by Lord Chancellor Apsley,[88] another of the law lords who, like Mansfield, would play a key and unexpected role in the House of Lords’ later consideration of the case.  Given that Thomson’s collection of poems was first published in 1730, and that the Statute of Anne granted a 14-year term with another 14-year renewal possible if the author was still alive, statutory copyright protection had expired by 1768, when Donaldson printed the copy of The Seasons at issue in Donaldson v. Beckett.[89]

Under its eighteenth-century rules, the House of Lords reviewed Apsley’s decree de novo.  As Lord Chancellor sitting in his role as Speaker of the House, Apsley presided over the case but the ultimate decision rested with the entire House of Lords,[90] whose members were sometimes called “peers.” Those lords who were not law-trained had equal say with those who were, but in practice the lay lords deferred to the law lords on most cases.[91]  In addition, the lords could—as they did in Donaldson—request legal advice from common law judges via “writs of assistance” on certain specific questions.[92]  The role of the common law judges from the courts of King’s Bench, Common Pleas and Exchequer[93]—to give their opinions on specific questions posed by the lords but not to decide the case themselves—is critical and appears to be misunderstood by many modern American legal commentators, who view the judges’ opinions as justifications by the actual decision-makers rather than just advisory statements by external actors.  Copyright scholar Ronan Deazley expressed the relationship between the lords and the judges on such occasions:

The lords, when faced with a particularly complex or difficult legal issue, could call upon the common law judges to proffer expert advice for the consideration of the House. The judges, if summoned, took up their position upon the woolsack, a position that was not considered to lie within the limits of the House. As a consequence, technically they “had no voice in the House” and could not give an opinion “unless formally asked for”. When they were asked for an opinion, if unanimous in their thinking, the senior judge present would deliver a collegiate address. If, however, there existed disagreement then the judges would be asked to answer the lords’ questions, each in turn, in order of increasing seniority.[94]

What follows is a daily summary of the appeal taken primarily from contemporaneous newspaper accounts, with particular focus on aspects of the case relating to press freedom.

A. Day 1: Friday, February 4, 1774

Prior to the House of Lords’ first day hearing the case on February 4, 1774, London society had anticipated the outcome of the case with much anxiety.[95]  Although it became clear in December 1772 that the House of Lords eventually would hear the case, it was for about a year in the hands of a University of Oxford law professor for “perusal and approbation.”[96]  The Oxford professor apparently was assigned as special master to determine the amount of money the petitioners had derived from sales of copies of The Seasons and thus the amount they should pay to the London bookseller Beckett.[97]

As the appeal in the House of Lords finally neared, London newspapers diligently kept their readers abreast of “[t]he great cause of literary property.”[98]  In explaining its decision to reprint the lengthy Lord Mansfield opinion from Millar v. Taylor in two parts, the Morning Chronicle and London Advertiser just two days before the House of Lords took up Donaldson explained that “the public cannot be too well apprized [sic] of the peculiar nature of the question.”[99]  The extent to which the debate over common law copyright roiled and divided the English legal community in the eighteenth century was evidenced by Mansfield’s statement, reprinted in the newspaper during the days leading up to the House of Lords hearing, that Millar v. Taylor was the first time the Court of King’s Bench had failed to reach unanimity in his time there.[100]

On the first day of the Donaldson appeal, a letter-to-the-editor writer called “A Friend to Literature” anticipated some of the arguments that would be made against common law copyright: The writer noted that London booksellers had been paying authors for copyrights “from the day of Shakespeare to our times” and therefore it was evident common law copyright existed long before Parliament adopted the Statute of Anne in 1710.[101]  Further, the writer said, literary property may well have established a monopoly but no more so than any other form of property ownership.[102]  The author said Donaldson and other Scottish booksellers would never “give a shilling in their lives to the encouragement of literature” and that “plunder, and temporary subsistence is all their aim.”[103]  Finally, the letter writer made an economic argument in favor of common law copyright, saying the failure to enforce it would cause legitimate copyright owners and booksellers to sell their works initially at exorbitant prices because of the expectation they would thereafter be pirated.[104]

A large crowd of people reportedly had to be turned away on the first day due to lack of room in the House of Lords.[105]  On that first day, the House of Lords heard just one advocate: Edward Thurlow,[106] the Attorney General, arguing on behalf of Donaldson.  The newspapers described Thurlow’s remarks as “a long and eloquent speech”[107]against literary property, or perpetual common law copyright, in which he “declaimed against monopolies of that nature as repugnant to law.”[108]

In February 1774, Thurlow was a 42-year-old lawyer on the ascendancy.  He and Dunning, despite their positions on opposite sides of the copyright litigation and their sharp critiques of one another’s arguments, were known to be close associates.  Thurlow’s arguments before the House of Lords on behalf of Donaldson were summarized in general form by Brown, together with and undifferentiated from those of his co-counsel, Sir John Dalrymple.[109]  Burrow contains no report of Thurlow’s remarks or any others made by the lawyers in the case.[110]  The Parliamentary History contains a third-person account of Thurlow’s remarks, which were said to be focused on the nature of property and whether such a thing as literary property could even exist or was “too abstruse and chimerical a nature to be defined.”[111]  Thurlow appealed to history, stating that if there had been a common law or natural right, then royal “grants, charters, licenses, and patents” would not have been necessary and neither would the Statute of Anne itself.[112]  The Anonymous Report contains a third-person account similar to that of the Parliamentary History,[113] but the Gentleman’s Report conveys what purports to be a first-person transcript of Thurlow’s remarks.[114]

The newspapers focused on Thurlow’s discussion of previous Chancery Court injunctions in favor of booksellers with respect to the unauthorized publication of the anonymous seventeenth-century work “Whole Duty of Man” as well as works by Milton, Pope, Swift and others.[115]  Thurlow argued these injunctions were based not on a common law right of copyright but rather government printing patents and the prerogatives of the Stationers’ Company.[116]  The Edinburgh Advertiser reported that Thurlow had referred to the Scottish Court of Session decision in Hinton v. Donaldson.[117]

          Thurlow’s arguments about the nature of property provoked strong public response from a newspaper reader, whose letter to the editor the following week expressed chagrin and surprise that the literary products of geniuses such as Shakespeare, Milton, Bacon, Newton, Pope, Locke and Addison could not be bequeathed to their posterity perpetually, but that other individuals could bequeath such mundane property as a windmill, fish pond, coal pit or lead mine.[118]  Other letters-to-the-editor displayed similar sophistication in responding to Thurlow’s arguments and those of Sir John Dalrymple, which would follow on Monday.  One, for example, evoked natural rights and a notion of the modern right of integrity,[119] which predominates in European moral rights regimes and appears in the Berne Convention for the Protection of Literary and Artistic Rights.[120]  Others expressed their support for copyright in terms of economic incentives to benefit the public.[121]

B.  Day 2: Monday, February 7, 1774

As with the remarks by Thurlow, the arguments made by Sir John Dalrymple on behalf of Donaldson on February 7 were reported in brief summary form by Brown and completely ignored by Burrow.  The record that later appeared in the Parliamentary History is very similar to a detailed third-person newspaper account[122] published in the days immediately after the speech.  Meanwhile, another, less-detailed newspaper account[123] seems to have been the basis for the version rendered in the Gentleman’s Report and a substantial part of the Anonymous Report.

Dalrymple’s speech,[124] though given little or no attention by Brown and Burrow, is singularly important because it provides a window to understand the contemporary view of the issue at stake in Donaldson, a topic of later confusion.  Several newspapers reported Dalrymple’s speech as emphasizing that “the point principally to be contended” in the Donaldson case was that the common law had never granted a property right to either bookseller or authors.[125]  On this point, Dalrymple stated that the booksellers lobbied in favor of passage of the Statute of Anne precisely because they knew they did not already have a common law property right.  It would have made no sense, Dalrymple said, for the booksellers to have lobbied for a 14-year copyright in the Statute of Anne if they already owned a perpetual right under the common law: “They knew their own situation,” Sir John told the lords.  “They knew the rottenness of their pretended right, and wanted a new real one, instead of the old imaginary one.”[126]  Dalrymple noted the Statute of Anne said it “vested” or “secured” a right, and that language would not have been present if the common law right already existed.[127]

Dalrymple might have contributed to the confusion that surrounds Donaldson—including on the part of the judges and the lords—and continues to mystify legal scholars.[128]  Although his main point of contention was that English common law, like that of Scotland and every other “civilized nation . . . under the canopy of heaven”[129]did not recognize a common law copyright,[130] Dalrymple also made an alternative argument.  Ideas, Dalrymple said, might belong to the individual who has them as long as that individual keeps them secret.  Once published, however, those ideas no longer belong to that individual.[131]  It was perhaps from this line of argument—Dalrymple’s emphasis that the Statute of Anne affected a sea change along with his discussion of the impact of publication of ideas—that grew the sentiment that the real issue in Donaldson was not whether a common law right existed in England but rather whether the common law right that surely existed was abrogated or preempted by publication of literary works.[132]

The newspapers also reported that at least a portion of Dalrymple’s argument centered on freedom of the press.  According to William Woodfall’s account in the Morning Chronicle,[133] Dalrymple “investigated the commencement and the secrecy attending the commencement of the art of printing, as well as the mode then taken by the printers to secure their property by patents, licenses, and Star Chamber decrees.”[134]  He observed that there was nothing so powerful in the political process as the press and said that the British monarchy had realized this early in the history of printing.  The monarchy had to account for the fact that “free use of the press must be finally dangerous to themselves” and so the Crown colluded with the booksellers to create the system of licensing that prevailed until 1694.[135]  In this way, he said, the Crown could exercise full control over the content of mass communication, much as it had done in the previous century with licensing.

C.  Day 3: Tuesday, February 8, 1774

Solicitor General Alexander Wedderburn began presentation of the case for perpetual common law copyright on February 8.[136]  In his remarks, Wedderburn appealed to both natural law and a public benefit rationale.[137]  Wedderburn cited the 17th century Dutch jurist Hugo Grotius, who quoted the Roman lawyer Paulus in saying one who invented an object was the owner of it.[138]  Wedderburn showed the lords a copy of the original grant by King James to the booksellers to print some of his poems, with the suggestion being that James would not have attempted to give the booksellers a literary property right he did not possess.[139]

Later that day, the lords heard from John Dunning on behalf of the booksellers.  Dunning had served as solicitor general prior to Thurlow, and in 1768 Dunning had been elected to the House of Commons.  Colleagues called him a brilliant lawyer and “the foremost advocate of his day.”[140]  Dunning was described by the newspapers as “having a violent Cold upon him”[141] that caused him to be hoarse and difficult to understand.[142]  Dunning, apparently responding to Dalrymple, said it was not reasonable to conclude that mere publication could deprive a literary property owner of his or her right.[143]

D.  Day 4: Wednesday, February 9, 1774

On February 9, Thurlow was allowed one hour and 45 minutes to respond to the arguments that had been made by Wedderburn and Dunning.[144]  Following Thurlow’s reply, Lord Chancellor Apsley directed that three questions be asked of the common law judges, who would render advisory opinions to assist the lords in deciding the case.  Lord Camden then posed two additional questions to the judges.  These questions and the judges’ subsequent responses have spawned a great deal of commentary and confusion.[145]  There appears to be some dispute surrounding even the newspapers’ contemporary reports of the questions.  Woodfall’s Morning Chronicle, for example, assured readers that all the other newspaper accounts of the questions were in error and that only the Morning Chronicle’s reporting could be trusted as accurate.[146]

In fact, there are significant differences between the questions as rendered by the Morning Chronicle, on the one hand, and three other newspapers, on the other hand.  According to the Morning Chronicle, Lord Chancellor Apsley repeated his three questions to the judges twice:

1. Whether at Common Law, the author of any literary composition had the sole first right of printing and publishing the same for sale, and could bring an action against any person for publishing the same without his consent.
2. If the author had such right originally, did the law take it away upon his printing and publishing the said book or literary composition, or might any person re-print and publish the said literary composition for his own benefit, against the will of the author.
3. If such action would have laid at Common Law, is the same taken away by the Statute of Queen Ann?  Or is an author precluded by such statute from any remedy, except on the foundation of the said statute?[147]

Meanwhile, the London Evening Post rendered Apsley’s questions differently, and two other publications[148] mimicked this version:

Question I. Whether the author of a book, or literary composition, has a common law right to the sole and exclusive publication of such book or literary composition?

Q. II. Whether an action for a violation of common law right will lie against those persons who publish the book or literary composition of an author without his consent?

Q. III. How far the statute of the 8th Queen Anne affects the supposition of a common law right.[149]

The London Evening Post version omits the middle question about whether a common law right, if one existed, was taken away upon printing and publication of a work.  In the London Evening Post’s rendering, the first two questions are redundant and the third is less precise than in the report of the Morning Chronicle.  All of the legal reports—Brown, Burrow, Parliamentary History, Gentleman’s Report and Anonymous Report—follow in substance the Morning Chronicle’s account of the three questions posed by Lord Chancellor Apsley.  But, as will be seen, at least one of the judges apparently understood the question to be the one printed in the London Evening Post and not the one in the Morning Chronicle.

Immediately after the three questions were put to the judges by Apsley, Lord Camden posed two additional questions.  Although Camden’s questions may seem repetitive of those posed by Apsley, modern scholars have noted that Apsley’s questions focused on the rights of authors while Camden’s questions focused on the rights of booksellers or printers who purchased copyrights from authors.[150]  This is related to the fact that Camden’s questions refer both to assignees and to a perpetual common law copyright that could, at least in theory, continue in force even after statutory rights have expired.  Once again, the Morning Chronicle version of the questions was followed in substance by the five reported versions in Brown, Burrow, Parliamentary History, Gentleman’s Report and Anonymous Report (and this time, there was no significant difference in the other newspapers’ version):

Whether the author of any literary composition, or his assigns, had the sole right of printing and publishing the same in perpetuity by the Common Law?

Whether this right is any ways impeached, restrained, or taken away by the 8th of Queen Ann?[151]

Although the judges would not begin giving their opinions on the questions for nearly a week, it did not take that long for London citizens to begin chiming in with their own answers to the questions posed by Apsley and Camden.  Even before the judges could begin to respond in the House of Lords on February 15, a letter-writer called “Brecknock” wrote in the Morning Chronicle that the purpose of the Statute of Anne was to encourage authors to publish their works as soon and as often as possible within 14 years or the exclusive right to do so would be lost.[152]

E. Days 5, 6 and 7: Tuesday, February 15, 1774; Thursday, February 17, 1774; and Monday, February 21, 1774

A total of 11 judges, including two who were also members of the House of Lords, gave their opinions on the five questions posed.  Had they been unanimous, the judges apparently would not have had to speak individually but rather could have submitted a single recommendation to the lords.  But since they disagreed, the judges were given the opportunity by the lords to present their views in order from junior to senior.[153]  The opinions of the judges have confused many readers of Donaldson for centuries, but in recent years scholars such as Deazley[154] have made detailed efforts to document the judges’ views and to correct errors traditionally made in describing those views, even in the official reported versions of the case.

The following summary of the judges’ advice to the lords, taken from contemporary newspaper accounts, is organized around the questions the judges had been asked to answer.  It should be noted that not all of the judges explicitly answered all of the questions put to them, and virtually none of the judges spoke at length about the distinction between the questions posed by Apsley and those posed by Camden.  In other words, the judges generally did not distinguish between the rights of authors and the rights of booksellers or printers.

1.  Was there a common law copyright? (7 Judges “Yes”; 4 Judges “No”)

On this question the judges who answered “No” were Eyre,[155] Perrott,[156] Adams[157] and De Grey.[158]  Perrott and Adams (and probably De Grey) expressed the sentiment that manuscripts could be owned in their physical form and that this ownership would protect something like a right of first publication.  This right was not unique to expression but was a kind of possessory right of the type that would extend to other property; as Perrott expressed, “[a]n author certainly had a right to his manuscript; he might line his trunk with it; or he might print it.”[159]  Perrott also believed that “[i]f a manuscript was surreptitiously obtained, an action at Common Law would certainly lie for the corporeal part of it, the paper.”[160]  This could not be called a common law copyright, however.  Instead, De Grey described it as simply the power to do “what a man will with his own” and said it included the prerogative “of publishing or withholding from the world a literary composition.”[161]  Meanwhile, the seven judges who concluded there was a common law right were Nares,[162] Ashurst,[163] Blackstone,[164] Willes,[165] Aston,[166] Gould[167] and Smythe.[168]

2.  Was the common law copyright lost upon publication? (7 Judges “No”; 4 Judges N/A)

All seven judges who believed there was a common law right also believed that it was not lost upon publication.  However, none of the remaining four judges clearly answered “Yes” to this question.  Although all five of the case reports—Burrow, Brown, Parliamentary History, Gentleman’s Report and Anonymous Report—put Eyre in the camp of judges who answered in the affirmative,[169] a newspaper account says Eyre argued “for an Hour and a Half, in a very strong Manner against Literary Property”[170] and therefore, in his view, there was no common law right for publication to take away.  A careful review of the various accounts of Eyre’s speech provides no basis for a conclusion that he answered in the affirmative on this question.  In fact, there seems to be widespread confusion about what question Eyre was answering.[171]

One contemporary newspaper writer reported that Eyre’s vote was given in response to the second question as inaccurately described by the London Evening Post(whether an action could lie) rather than the version of the Morning Chronicle and the legal reporters (whether the right was lost upon publication).[172]  The Gentleman’s Report,[173] Anonymous Report[174] and Parliamentary History[175] all substantiate that Eyre said, in response to what he apparently thought was the second question, that an action could not be brought because there was no common law right.  Thus it appears Eyre never squarely addressed the actual second question posed by Apsley: whether any common law right that existed was lost on publication.  Burrow reports that Eyre said “if the author had such sole right of first printing, the law did take away his right, upon his printing and publishing such book or literary composition.”[176]  But there is no basis for this conclusion by Burrow in any of the narratives of Eyre’s arguments, including the newspaper accounts.  Given that Burrow made an error in recording Nares’ vote on the next question,[177] it seems likely that Burrow’s statement about Eyre’s vote on this question could also be erroneous.

A letter-writer to the Morning Chronicle challenged Eyre’s view that there was no common law right.  The writer contended that the real danger to the public interest in free communication was that writers would not “bring the product of their ideas to public market” but would rather keep them unpublished and thereby monopolize those ideas.[178]  This would happen, the writer said, if the statutory and common law schemes for copyright were not sufficiently protective as to convince the author that publication was in his or her best interest.

Like Eyre, the judges Perrott, Adams, and De Grey did not believe there was a common law right and did not squarely address this question.  To the extent they believed a right was taken away by publication, it was the possessory right of first publication and not the common law copyright, which for them did not exist.[179]

3.  Did the Statute of Anne supersede the common law copyright? (6 Judges “No”; 1 Judge “Yes”; 4 Judges “If right had existed, it would have been superseded”)

On this question, six of the judges who believed that the common law copyright existed answered “No” while only one judge, Gould, clearly answered “Yes.”[180]  Although modern observers place Eyre in the affirmative camp, his opinion might best be described as: “If a common law right had existed, it would have been taken away by the statute” since he so strongly believed there was no common law copyright at all.[181]  De Grey’s opinion was similar, given that he spent a considerable amount of time arguing that the Statute of Anne would have superseded the common law right if it had existed but he also concluded the common law copyright did not exist.[182]  Perrott and Adams expressed the same sentiment.[183]

Nares’ negative vote was erroneously recorded as “yes” by Burrow.[184]  The Parliamentary History is internally contradictory, reporting on the same page that Nares voted both “yes” and “no” on this question.[185]  However, it is of particular importance to note that no fewer than seven London newspapers recorded Nares’ vote as negative.[186]  The importance of correctly placing Nares in the “no” group is that Nares is the swing vote who gives the judges supporting a common law right not superseded by the Statute of Anne the six votes necessary to constitute a majority among the eleven judges who spoke.[187]  Given that the lords ultimately did not follow the judges’ advice on this point (because they reversed the injunction that had been given against Donaldson), it has been argued that the lords’ holding against common law copyright is strengthened.[188]  In other words, if the lords had merely followed the advice of the judges, then the judges’ opinions would have been most important.  But since the lords rejected the advisory opinions of a majority of the judges, it is the lords’ statements that must be given priority.

4.  Was there a perpetual common law copyright that authors could assign to printers? (7 Judges “Yes”; 4 Judges “No”)

On this question the four judges who earlier stated there was no common law copyright again answered “No,” and the same seven judges who endorsed the common law copyright can probably be placed in the “Yes” category.  For most of these seven judges, the affirmative response is by implication because there was little discussion, according to the newspaper accounts, of how this question and the judges’ corresponding responses may have differed from the first question.[189]

5.  Did the Statute of Anne supersede the perpetual and assignable common law copyright? (6 Judges “No”; 1 Judge “Yes”; 4 Judges “If right had existed, it would have been superseded”)

Unsurprisingly, on this question the six “No” votes came from the same judges who answered “No” to the third question—those who believed that the common law copyright did exist, was not surrendered upon publication, and was not superseded by the Statute of Anne.  And again, the only judge to clearly answer “Yes” was Gould, while Eyre, Perrott, Adams and De Grey—the four who believed no common law copyright ever existed—are probably best classified as answering that the statute would have taken the common law right away if it had existed.[190]

In an effort to summarize the sentiments of the judges, Deazley has placed them in three camps: (1) those who believed there was a perpetual common law copyright that was neither abrogated by the Statute of Anne nor given up by publication (Nares, Ashurst, Blackstone, Willes, Aston, and Smythe); (2) those who believed there was a right of first printing that was not a common law copyright but rather a kind of possessory right in the physical manuscript itself, but that this right disappeared after publication because of the Statute of Anne (Eyre, Perrott, Adams, and De Grey); and (3) one judge who believed there was a common law copyright but that it was superseded by the Statute of Anne (Gould).[191]

However, based on review of the newspaper accounts, this article concludes four categories of judges should be identified: (1) those who believed there was a perpetual common law copyright that was neither abrogated by the Statute of Anne nor given up by publication (Nares, Ashurst, Blackstone, Willes, Aston, and Smythe); (2) those who believed there was a right of first printing that was not a common law copyright but rather a kind of possessory right in the physical manuscript itself, but that this right disappeared after publication (Perrott, Adams, and De Grey); (3) those who believed there was not a common law copyright but that, if one had existed, it would have been superseded by the Statute of Anne (Eyre, Perrott, Adams, and De Grey); and (4) one judge who believed there was a common law copyright but that it was superseded by the Statute of Anne (Gould).  The difference between this article’s categorization and Deazley’s is that, in this version, Perrott, Adams and De Grey each have been placed in two separate categories: one in favor of the possessory right of first publication and another for the alternative holding that, if a common law right had existed, it would have been superseded by the Statute of Anne.  Meanwhile, based on a review of the newspaper and other accounts showing Eyre did not vote “yes” on the real Question No. 2 but rather answered a different question, Eyre has been moved from the category of those who believed that publication resulted in loss of a common law right.  This seems to most accurately describe the four major ways of thinking about the case among the judges.

Another way of viewing the opinions of the judges is that seven out of 11 (categories 1 and 4 above) concluded there was a common law copyright, and four judges (categories 2 and 3 above) concluded there was no common law copyright.  Significantly, six of the 11 judges believed the common law copyright survived the Statute of Anne, meaning that an author could assign rights to a printer in perpetuity and the printer could prevent others from publishing the work even after the statutory term of copyright protection had expired.[192]  Given this state of affairs at the conclusion of the judges’ advisory opinions, one does not blame supporters of the booksellers for declaring in the newspapers that they were “well pleased that the Question of Literary Property is likely to go in Favour of those who have in their Purchases treated it as such.”[193]  In reality, however, the lords had something else in mind.

It is significant to note, especially in light of how the case has come to be perceived by American legal scholars, that only one judge—Gould—said there was a common law copyright superseded by the Statute of Anne.  Meanwhile, equally significant in light of modern interpretations is that no judge concluded there was a common law copyright given up by publication of the work in question.

F.  Day 8: Tuesday, February 22, 1774

After following the case closely and reporting on its numerous developments for more than two weeks, London newspapers were anxious for the decision by the House of Lords.  One newspaper reported that Lord Camden was “infirm” and yet contended for more than two hours that there was no common law copyright.[194]  He took the booksellers to task, calling them “monopolizers of letters” and “extinguishers of genius.”[195]  Camden agreed with Dalrymple’s argument and said authors write for fame only and judges interpret law, not make it—essentially concluding that no common law right existed.[196]  Apsley then seconded Camden’s motion to reverse the Chancery Court injunction Apsley had entered against Donaldson less than two years earlier.[197]  Apsley spent a considerable amount of time speaking “against his own decree” and showing “the specious grounds which he went upon before, and candidly confessed his conviction by a different opinion from that he had before given.”[198]  Apsley claimed that he had been bound in the Chancery Court to follow Millar but that he had no particular conviction in favor of common law copyright and after examining the legislative history of the Statute of Anne, thought it was clear that Parliament was against the common law right at the time of passage of the Act.[199]

Lord Lyttleton said there was a common law copyright not superseded by statute while the Bishop of Carlisle was reported to have agreed with Camden that there was no common law right.  Meanwhile, Lord Effingham said there was no common law copyright because it would inhibit freedom of speech.[200]  One newspaper reported simply, “Lord Mansfield did not speak.”[201]  In summary, then, four of the five lords who spoke were of a mind that there was no common law copyright.  The House of Lords ultimately voted to reverse the injunction, either by voice vote or, in some accounts, a counted majority.[202]  One newspaper reported that “a great personage has expressed much satisfaction” at the decision but did not say who that great personage might be.[203]  One Londoner called Ben Button wrote to the editor of the St. James Chronicle, “The Lord above knows but I don’t what the Lords here below can mean by their Decision against Literary Property in Perpetuity….”[204]

Finally, the newspapers related two tragically humorous stories—perhaps apocryphal—about the ramifications of the House of Lords decision.  The first involves a conversation between a bookseller and his lawyer, reported to have been heard in the lobby of the House of Lords immediately after the decision in favor of Donaldson:

“Bookseller. And now, Sir, I am ruined;—my whole Fortune has been expended in Literary Moonshine.

“Lawyer. The more a Lunatic you, to lay out your Money upon a Non-entity, a Phantom,—to give a something for nothing.

“B. I thought it was Property; it was sold and conveyed to me as such; it has been esteemed so for sixty Years past: The Author would have libelled me if I had denied its being so; and I verily believed it was as much Property as what I gave in Exchange for it.

“L. And so it is; you see what it is to deal with an Author; you now see your Money is no more your Property, than his Works which you bought of him.

“B. This may be Sport to you; but it is hard to be ruined by a Decision on a doubtful Point.

“L. Doubtful! The Law can never be doubtful; for every Peasant is presumed to know the Law, and therefore you cannot plead ignorance in Excuse for your Folly.

“B. Was it so clear, Mr. Double-Tongue, when the Judges were divided in Opinion? [W]hen the Chancellor made the Decree which he afterwards reversed? [W]hen the Lords themselves were not unanimous? [W]hen—

“L. Pfhaw, you know nothing of the Matter—this is the glorious Uncertainty of the Law.

[Exit, chinking his Purse.

“BOOKSELLER folus.

“B. The glorious Uncertainty of the Law—that which has proved my Ruin, and makes your Fortune—What shall I do? Shall I turn Pirate? For they and the Smugglers are more encouraged than the fair Trader, or Merchant—NO, I’ll turn Lawyer, there I cannot err, for the Ignorance of Law, which has ruined me, is a good Plea in the Professors; and my Friend’s glorious Uncertainty of the Law will make my Opinion as often right as the best of them.”[205]

The second story reportedly took place at Eton, and in it the teller notes the anger of the booksellers toward Mansfield, who, had he spoken, might have been able to change the outcome of the case:

An arch thing happened here a day or two ago, between a young lad of this school and an old woman who sold gingerbread and cakes. The young spark having made free with the dame’s gingerbread while the old woman’s back was turned, and being discovered, was very severely rated by her for making free with her property: the boy observing that what he had taken was alphabet gingerbread, cried out, that she was mistaken, it was not her property, for the House of Lords had lately determined there was no such thing as literary property, and therefore lettered gingerbread was from thenceforth common. The old dame was as angry at this speech, though she did not understand it, as certain lawyers were at a great man’s silence on this subject, which they did not understand, and determined to complain to the matter; but a friend of mine, who saw the affair, stepped in and paid for the gingerbread.[206]

The newspapers also reported that “ill consequences” were expected to result from the decision, and among those would be the discouragement of literature.[207]  Donaldson’s Edinburgh Advertiser, though, was ecstatic with the outcome.  Donaldson, who by then had given control of the newspaper over to his son, probably did not have a direct hand in all the Advertiser’s coverage of the case, and in any case the coverage was fairly objective.  But at the conclusion of the case, the Advertiser published a letter from London—one cannot help but speculate whether it could have been written by Alexander Donaldson himself—that made a concession to the joy of victory by publishing all the names of the booksellers who had lost the case.[208]

Conclusion

This re-examination of Donaldson v. Beckett, and the discussion of modern American scholars’ struggles to understand the meaning of the case, demonstrates that determining the “traditional contours” of copyright law may be difficult.  The Supreme Court did not provide guidance in Eldred v. Ashcroft on how the “traditional contours” of copyright may best be understood, and the issue is little clearer today than it was in 2003.  This article’s examination of Donaldson v. Beckett has shown that, at the time of the adoption of the first American Copyright Act by the U.S. Congress in 1790, the British House of Lords had made clear that English common law did not recognize a common law copyright after expiration of statutory rights.  It is also apparent through careful re-examination of the case that, while observers of and participants in eighteenth-century copyright legislation and litigation may not have shared a single clear understanding of Donaldson, the potential conflict between copyright and free public communication was not only recognized by newspaper readers, journalists, lawyers, judges and lords but at least some of those involved were genuinely concerned about the negative impact of copyright on freedom of the press.[209]

The lessons learned from this history[210] can be of use to federal judges in reviewing free-speech-based challenges to copyright law.  One such challenge was heard by the Supreme Court in the 2011 Term in Golan v. Holder.  The Tenth Circuit addressed the First Amendment issue in the case, [211] and concluded that Congress had altered the traditional contours of copyright in 1994 when it passed the Uruguay Round Agreements Act, a law that sought to bring the United States in compliance with obligations under the Berne Convention for the Protection of Literary and Artistic Rights.[212]  In bringing the works of certain foreign authors from the public domain back into copyright protection, the Tenth Circuit said, Congress triggered First Amendment scrutiny.  One of the “traditional contours” of copyright, the court said, “is the principle that once a work enters the public domain, no individual—not even the creator—may copyright it.”[213]  Ultimately, the Court of Appeals held that the law survived First Amendment scrutiny because Congress demonstrated a substantial or important interest—to secure foreign copyright protection for American authors under Berne by granting copyright protection to foreign authors in the United States, even if their works were previously in the public domain—which was unrelated to the suppression of free expression and narrowly tailored.[214]

Upon appeal to the U.S. Supreme Court, the orchestra conductors, educators and others challenging the law disagreed with the U.S. Solicitor General over what constituted the “traditional contours” of copyright.  The plaintiffs-appellants argued before the Supreme Court on October 5, 2011 that the Tenth Circuit was right when it said that a traditional contour of the U.S. Copyright Act was that works could not be taken out of the public domain and put under copyright protection.[215]  The United States, meanwhile, argued that First Amendment scrutiny would be applicable only if Congress took the extreme measure of doing away with fair use altogether, or abrogated the idea-expression dichotomy and gave copyright protection to mere ideas.[216]  A substantial part of the written briefs and oral argument in the case focused on the state of English and American common law prior to 1790, when the United States adopted its first Copyright Act.  Those challenging the law contended that Congress did not bring any public domain works into copyright protection in 1790 because common law copyright already protected those works at the time. [217]  The Government countered that Congress did bring public domain works into copyright protection in 1790. [218]  The former interpretation is not supported by the evidence discussed in this article as related to Donaldson v. Beckett, although admittedly this article makes no definitive conclusions about the American circumstances and developments from 1774 to 1790.

What this article has shown is that the historical relationship between copyright law and free speech is more complicated than a simple conclusion that they have been separate branches of law between which lawmakers and jurists have traditionally seen no conflict.  In the episode of Donaldson, the conflict was recognized and made up a substantive part of the debate.  No one connected with Donaldson viewed the free speech issues at stake in the way they would be viewed today under the First Amendment, but nonetheless the concern that copyright could inhibit communication of ideas and even the freedom of the press was present in the speech of Effingham, as well as in the newspaper coverage.  The newspapers themselves were just emerging from a bruising battle with the House of Commons and the House of Lords over publication of those bodies’ proceedings, and several newspaper reporters and correspondents recognized that the copyright monopoly could pose a private threat to freedom of press similar to the state threat they knew well.  Further, newspaper coverage of speeches by Thurlow and Dalrymple demonstrated that those lawyers made freedom of press issues a part of their arguments to the House of Lords.  Finally, Donaldson himself engaged in free-press advocacy through the editorial pages of his own newspaper, the Edinburgh Advertiser, including during the appeal to the lords in Donaldson v. Beckett.

Perhaps one of the most important legacies of Donaldson should be the recognition that, regardless of whether the common law copyright existed then or exists today, and regardless of a statute’s effect on that common law right, there is yet another source of law that trumps both common law and statute: a fundamental human right to freedom of expression.  Although their opinions have been given relatively scant attention in the court of history, Effingham and the other lords who spoke have given an important warning about the dangers posed by copyright to public communication of ideas.  Donaldson’s Edinburgh Advertiser reported:

LORD EFFINGHAM then rose and said, though it might appear presumptuous in one of his cloth, (an officer) to give his opinion in a cause which had divided the learned judges, yet he thought, if a perpetual exclusive right was given to authors, it would also give them a right of suppressing: a bad minister might purchase copies of books or pamphlets, which arraigned his conduct, or were friendly to the liberties of the people, and suppress them, and thus a blow might be given to the constitution and liberty of the press; that where there was a free press, there would always be a free people, and he wished to see no encroachment made on it, or on the liberty of the subject, and was therefore for reversing the decree.[219]

In his eloquence and position, Effingham was not alone.  Camden, too, expressed a sentiment not far afield, and Camden’s statement has received more attention from history than Effingham’s has.  Camden said that science and learning are public property and “they ought to be as free and general as Air or Water.”[220]  Indeed, Camden said, the very purpose of “enter[ing] into Society at all” is to “enlighten one another’s Minds, and improve our Faculties, for the common Welfare of the Species.”[221]  Knowledge, he said, is of no use or enjoyment unless it is shared, and true geniuses seek understanding rather than money.[222]  He cited the example of Milton, who, when offered five pounds for Paradise Lost, “did not reject it, and commit his Poem to the Flames, nor did he accept the miserable Pittance as the Reward for his labor; he knew that the real price of his Work was Immortality, and that Posterity would pay it.”[223]

If the alteration of historical contours of copyright law is really what triggers First Amendment scrutiny, then courts in the future would do well to look carefully at copyright’s past.  Although it has been accepted that the modern American concepts of fair use and idea-expression dichotomy account for free-expression interests within copyright law itself,[224] the reality of copyright history is that it has always had a more complicated relationship with free expression.  The very purpose of copyright law—to “encourage learning” in the words of the Statute of Anne, or to “promote progress” of art in the words of the U.S. Constitution—arose in the period immediately after Parliament allowed the Licensing Act to expire in 1694 and various parties clamored for a law regulating printing.  As he argued against a return of licensing, the journalist (later turned novelist) Daniel Defoe articulated a societal benefit to freedom of speech:

To put a general stop to public Printing, would be a check to Learning, a Prohibition of Knowledge, and make Instruction Contraband: And as Printing has been own’d to be the most useful Invention ever found out, in order to polish the Learned World, make men Polite, and increase the Knowledge of Letters, and thereby all useful Arts and Sciences; so the high Perfection of Human Knowledge must be at a stand, Improvements stop, and the Knowledge of Letters decay in the Kingdom, if a general Interruption should be put to the Press.[225]

As an aside, Defoe argued later in the same essay that perhaps the government could require authors to attach their names to their works and thus cut down on undesirable attacks on others.  This would have the incidental benefit, he said, of decreasing “press-piracy,” or what we would today call copyright infringement.  In their efforts to get a bill regulating printing adopted and thus restore their monopoly powers, the booksellers or stationers who had benefited from licensing adopted Defoe’s public education rationale for free speech and attached it to copyright law.[226]  An understanding of the “traditional contours” of copyright law, then, must take into account the intertwined histories of free expression and copyright.  Such an understanding will require much careful study and will not be aided by simplistic or mistaken rhetoric based on a cursory historical review.

Although the scope of this article has not permitted such a review of hundreds of years of copyright history, it has demonstrated that, even if the plaintiffs-appellants inGolan v. Holder are correct that American common law protected works under copyright in 1790, this protection did not emanate from English common law, at least in relation toDonaldson’s holding that there was no perpetual common law right that continued after statutory rights were extinguished.  Perhaps more importantly, however, this article demonstrates that the Government’s argument in Golan that Congress can remove works from the public domain without First Amendment scrutiny is not in line with the outcome of the eighteenth-century Battle of the Booksellers that culminated with Donaldson.  That episode suggests that legislative authority is not unlimited in the arena of copyright law and legislative enactments of copyright are to be read narrowly while the public interest, including in free communication, should be given weight when considering copyright questions.

INTRODUCTION

I’m gonna look well smart in me Burberry.[1]

The modern brand[2] is a social phenomenon, not just a commercial one.  As consumers, we use brands as tokens of social differentiation, identification, and expression,[3]and producers covet the commercial advantages that come with the integration of brands into consumers’ sense of identity.[4]  But weaving brands into the social fabric is an unpredictable process, one that cannot be controlled completely by brand owners or by consumers.  The struggle between brand owners and consumers over the social meaning of the brand itself occasionally spills out onto the airwaves and even onto the streets.  Recently, in the space of a single week, we saw two striking examples of this conflict.  In one, the major American fashion retailer Abercrombie & Fitch launched a media offensive to try to assert control over the social implications of reality television star Mike “The Situation” Sorrentino’s prominent consumption of its products on MTV’s Jersey Shore.[5]   Meanwhile, across the Atlantic, managers of global brands like Adidas, Nike, and Levi’s struggled to contain the fallout from their brands being associated with the worst civil unrest Britain has seen in ages.[6]

In at least one of these episodes, there has been some suggestion that the brand owners might take some sort of legal action to protect the value of their brands.[7]  This suggestion raises a relatively novel question of law.  Even though social meaning can be one of the primary sources of a modern brand’s value, and the preservation of that value depends on the rights afforded under trademark and unfair competition law, that body of law lacks a coherent framework to deal with conflicts that arise between consumers and producers over brands’ social meanings.  This Article explores one typical       point of potential producer-consumer conflict suggested by the examples of the previous paragraph—what I call the “brand renegade.”

I define a brand renegade as a consumer who uses branded products out of affiliation with some aspects of the image cultivated by the brand owner, but whose conspicuous consumption of the brand generates social meanings that are inconsistent with that image.[8]  Part I of this Article reviews the theoretical literature on the economics and psychology of trademarks to identify the origins of the brand renegade.  Part II describes some recent examples of brand renegades in action, as well as the responses of brand owners to those brand renegades, pointing the way toward a legal showdown between the two groups.  Part III turns to the availability of legal doctrines to mediate the conflict between brand owners and brand renegades, and finds them surprisingly thin.  In the end, I argue that socially expressive consumption (and portrayals of that consumption) ought to be permissible as a matter of trademark law, but note that it is not clear that we have the doctrinal architecture to enforce this (hopefully uncontroversial) principle.

I. WHENCE THE RENEGADE?

We can envision more than one model by which a brand can come to have social significance.  Perhaps the simplest model is one in which the brand owner works to establish an image through its marketing activities—advertisements, paid endorsements, product placements, etc.—and consumers individually decide whether to identify with that image (by buying the branded product) or not.  This model is consistent with the dominant theoretical model of trademark law—what I have referred to elsewhere as the “search-costs model.”[9]  Under this model, producers are thought to use trademarks to convey information about the unobservable qualities of their products—the flavor of a soda; the reliability of a car—to buyers who would otherwise be unable to find that information on their own.  By this mechanism, trademarks provide the basis for both consumer choice and producer competition, building goodwill in the process.[10]

Of course, this model is essentially useless in describing a great deal of actual observed behavior surrounding consumer brands.  If all consumers cared about were the images generated by the brand owner for adoption or rejection by an atomized consuming public, the fact that a rioting “chav”[11] or a boorish braggart were known to consume the brand would be irrelevant.  But clearly, brand owners care quite a bit about that type of information,[12] most likely in the belief that consumers do as well.

This suggests that there is some other type of brand information that consumers and brand owners find important, and that this information relates to the interaction between brands and the people who consume them.  Brand owners could certainly try to generate such information.[13] Indeed, much modern marketing, including the widespread use of celebrity endorsements, is directed at persuading consumers to associate particular personality traits with a brand[14]—the Gerber Baby;[15] the Marlboro Man;[16] the Avon Lady;[17] the Pepsi Generation.[18]  To the extent that such subjective associations are just one more example of brand owners creating and disseminating information to consumers, who passively receive it and react to it solely through their atomized purchasing decisions, they might conceivably be integrated into the search-costs model discussed above—as indeed they have been.[19]

The problem is that these personality-based associations—because they do not refer back to anything more substantial than the shifting minds of consumers—behave differently than other types of product information, which refer back to the material qualities of a product.  In particular, personality-based associations are freighted with vital but unstable social meaning.  As consumer psychologists have shown, consumers themselves play an integral role in constructing the social meanings of the brands they consume, not least by forming, expressing and observing one another’s social identities and allegiances through acts of conspicuous consumption:

When brand associations are used to construct the self or to communicate the self-concept to others, a connection is formed with the brand. . . . [A]ssociations about reference groups become associated with brands those groups are perceived to use, and vice versa.  The set of associations can then be linked to consumers’ mental representations of self as they select brands with meanings congruent with an aspect of their current self-concept or possible self, thus forging a connection between the consumer and the brand.[20]

Importantly, however, the power of consumers to contribute to and draw on brands’ social meanings is limited by the instability of those meanings in a fluid and competitive social landscape.  As Professor Barton Beebe explains, “commodified forms of distinction . . . produce in the fashion innovator or adopter a feeling of ‘significant difference,’ of being something other than a mere copy in a mass world of equivalence”;[21] but this feeling is inevitably temporary, as “copying both destroys the distinctiveness of existing fashions and creates the need for new ones.”[22]

These features of consumer psychology demand a more dynamic model of the construction of a brand’s social meaning than trademark law currently has.  In particular, they require us to come to terms with a significant amount of back-and-forth between and among brand owners, consumers, and the social audience.  From the brand owner’s perspective, the participatory, decentralized, and non-hierarchical nature of the construction of a brand’s social meaning is a double-edged sword.  On the upside, it allows brand owners to capture a significant amount of value that is created not by the brand owner itself, but by its customers.  On the downside, it creates the risk that brand value could be destroyed by forces beyond the brand owners’ control.  Chief among these forces is the brand renegade.[23]

II. THE RENEGADE IN OUR MIDST

The history of mass marketed brands is rife with examples of brand renegades, but reveals some diversity in brand owners’ responses.  This Part considers some illustrative examples.

A.  Adoption and Co-Option

Consider the cognac market.  For decades, the House of Courvoisier marketed its product as “the brandy of Napoleon,”[24] cultivating associations with European aristocracy (and its wealth and power) through full-page ads in upper-middle-class aspirational magazines like Fortune and Gourmet.[25]  But as American society changed, those associations began to lose their appeal in the spirit’s target market.  By the late 1990s, “you almost couldn’t give France’s most famous brandy away”; cognac in general was seen “as an old fart’s drink, a digestif for tuxedoed geezers smoking cigars in wood-paneled libraries.”[26]

But a counter-trend was already underway.  Over the course of the 1990s, cognac had become a fixture in African-American nightlife, and its rise was reflected in hip-hop culture.  As early as 1993, West Coast rapper Ice Cube identified the gangsta rap aesthetic with, among other things, “sippin on Courvoisier.”[27]  By 2002, hip hop had moved from counterculture to mainstream,[28] and Busta Rhymes’s single, “Pass the Courvoisier,”[29] peaked at number 11 on the Billboard Hot 100 charts.[30]  While the old-world image of imperial power and opulence no longer had the same pull for the traditional upwardly mobile (and traditionally white) elite of the American economy, the idioms of material luxury had been appropriated by a formerly marginalized, but now culturally ascendant, segment of that economy.  Importantly, hip hop did not adopt the trappings of Courvoisier’s marketing images even as it adopted the brand as an element of its identity.  Rather than affecting a First Empire salon, Ice Cube situated Courvoisier in the driver’s seat of a two-tone Ford Explorer tearing down the 110 Freeway;[31] Busta Rhymes in a prohibition-era Harlem back alley.[32]

While the Napoleonic imagery of Courvoisier’s marketing efforts shares some thematic points with hip hop’s invocations of the brand (among them ostentatious wealth, violence, and misogyny), there are obviously deep cultural differences between the two.  Courvoisier’s expanding young, urban, African-American clientele were, in this sense, brand renegades: they adopted the brand itself as an element of their identity, but did not otherwise change their identity to conform to the brand’s existing marketing strategy.  And given the social dynamic described above,[33] the conspicuous consumption of the brand by these renegades could not help but reflect back on the social meaning of the brand itself.[34]

The House of Courvoisier’s response to the reshaping of its brand by forces beyond its control was highly adaptive.  Rather than dispute or resist the changes in their brand’s social meaning, the brand owner co-opted the changes its customers had wrought.  As early as 2000, its marketers had pivoted their messaging to appeal to a new demographic: “young, urban adults who subscribe to hip-hop culture, the vast majority of whom are African-American.”[35]  When Busta Rhymes released his single, Courvoisier’s marketers were already on the scene, “skillfully tr[ying] to capitalize on the event, in sponsoring events with P Diddy, Missy Elliott and Lil’ Kim, in particular.”[36]  By 2007, Courvoisier was touting its product as the brandy of hip-hop mogul Jermaine “JD” Dupri—Napoleon was conspicuously absent from the campaign the company launched that year.[37]  In short, rather than viewing its brand renegades as a threat, Courvoisier welcomed them as an opportunity.

As a business matter, Courvoisier’s response to its brand renegades makes perfect sense.  The release of “Pass the Courvoisier” coincided with an 18.9% rise in Courvoisier’s sales,[38] and the adoption of the brand by a new generation of drinkers saved it from a decades-long decline.[39]  Indeed, it is possible that any other course of action might have threatened to damage Courvoisier’s business—as the makers of Cristal champagne learned when they failed to give rapper Jay-Z the respect to which he felt entitled as a successful and influential brand renegade.[40]   Courvoisier was thus in the fortunate position of capturing the positive value of social meanings it did not create by virtue of those meanings becoming associated with its brand through the actions of brand renegades.  But more difficult questions arise when the effect of brand renegades on a brand owner’s bottom line is not so unambiguously positive.  The rest of this Part illustrates these difficulties.

B.  Reality Bites

As the row between Jay-Z and the makers of Cristal shows, brand owners who invest in cultivating a certain image may not always be grateful to brand renegades who change that image.  This ingratitude strikes us as foolish in the hip-hop context, where the adoption of niche luxury brands by a large but marginalized demographic broadly expands those brands’ commercial appeal (and thus their profitability).  But such ingratitude may be entirely understandable where the customers attracted to the social meanings created by a brand renegade may be offset or even overwhelmed by customers who are loyal to the brand’s preexisting image and who find its new meanings repellent.[41]

Take the example of MTV’s Jersey Shore.  The reality series is a ratings bonanza for MTV parent Viacom and a bona fide cultural phenomenon.[42]  It is also deeply offensive to a substantial and vocal population.  The arbiters of culture find its cast members—such as the aforementioned “The Situation”[43] and Nicole “Snooki” Polizzi—to be the personification of bad taste and bad character.[44]  And understandably, many people do not want to be associated with such characters.[45]  There are, accordingly, a fair number of brands that do not want to be associated with the cast of Jersey Shore either, and those brands’ owners will go to some lengths to avoid any such association.  For example, in an episode I have discussed elsewhere,[46] it was rumored that some fashion houses were gifting their competitors’ high-priced handbags to Snooki in the hopes that her déclassée image would rub off on those competitors, to the gift-giver’s benefit.[47]

To be sure, an association with Snooki—to whom the New York Times once attributed the epithets “[f]lake, cow, loser, slut, idiot, airhead, trash, penguin, creep, moron, midget, freak, Oompa-Loompa, nobody”[48]—is probably not something most customers of most luxury fashion brands want.  But there is a huge population of young people who find her irresistible, even admirable.[49]  The same can be said for The Situation.[50]  As New York Magazine put it, “Jersey Shore . . . made him famous enough to make money off a branded creatine shake.”[51]  And in a recent, highly publicized incident, he stepped into the role of brand renegade.

In August of 2011, a retail analyst noted that a recent episode of Jersey Shore had shown The Situation “wearing a pair of neon green A[bercrombie] & F[itch] sweatpants ‘loudly (and proudly)’ on the streets of Florence.”[52]  Abercrombie & Fitch’s “Brand Senses Department” responded swiftly with a press release proposing what it called “a Win-Win Situation.”[53]  The release protested that association with Jersey Shore “is contrary to the aspirational nature of our brand, and may be distressing to many of our fans.”[54]  Accordingly, Abercrombie & Fitch made it known, the company had offered to pay The Situation (and other members of the Jersey Shore cast) not to wear its clothes.[55]

This was a bit rich.  As the press reported, Abercrombie & Fitch is “no stranger to controversy, with its racy marketing campaigns featuring nearly naked models.”[56]  As The Situation himself had noted some time before, one of Abercrombie & Fitch’s more popular t-shirts is emblazoned with the word “Fitchuation.”[57]  Even while dutifully reporting the release, major media outlets recognized they were the instruments of a publicity stunt that was curiously timed to coincide with a quarterly earnings call and the announcement of a major expansion.[58]

Abercrombie & Fitch did not appear to be seriously distancing themselves from the brand renegade, but at the same time they were not trying to co-opt him, as in the Courvoisier example above.  Rather, the company seemed to be trying to leverage him.  Clearly, Abercrombie & Fitch wanted the public to know two facts about The Situation: first, that he wears the company’s clothes, and second, that the company is not comfortable with him wearing its clothes.  The first message is designed for fans of Jersey Shore; the second, for their bill-paying parents (and the show’s detractors more generally).  If successful, this stunt may succeed in capturing the upside value of The Situation’s social connotations without suffering their downside—a “Win-Win Situation” indeed.

Still, this is a dangerous high-wire act for a brand owner to play when faced with a brand renegade.  Even a rumor or hint that the brand owner is trying to distance itself from the social identities of its customers can be commercially devastating.[59]  As the Recording Industry Association of America discovered at great cost, a business strategy that depends on publicly attacking your customer base is likely to be counterproductive.[60]  Still, a constant threat hovers over the brand owner who tries to court the brand renegade without alienating the brand loyalists.  At some point, one of these constituencies may put the brand owner to a choice.

C.  Cutting Loose

On the evening of August 4, 2011, 29-year-old Mark Duggan was shot dead by police in the north London neighborhood of Tottenham.[61]  On August 6, what started as a peaceful protest over the shooting erupted into a violent anti-police riot.[62]  Over the following days, rioting spread throughout London and Britain more generally, evolving into an expression of an undifferentiated amalgam of social, political, and economic discontentment; the conditions of public disorder set the stage for a wave of nihilistic and opportunistic violence and looting.[63]  Young people in particular seemed to see the riots as an opportunity to assert their independence from political, legal, and economic authority; as two young women interviewed by the BBC explained:

It’s the government’s fault . . . . Conservatives . . . whatever, who it is . . . . [T]hat’s what it’s all about, showing the police we can do what we want, and now we have . . . . We’re just showing the rich people we can do what we want.[64]

One thing they wanted was fashion brands.  The press reported that looters of some clothing stores were seen trying things on before they stole them.[65]  One of the most riveting images of the rioting appeared on the front page of the August 9 issue of The Guardian: a masked young man, backlit by the carcass of a burning car, decked head-to-toe in an immaculate Adidas hoodie tracksuit (with the shoes to match).[66]  As looting became widespread, the media began to report that certain brands that had cultivated an image of confrontational, rebellious youth in their marketing—brands like Adidas, Nike, and Levi’s—were particularly targeted by the young rioters for theft.[67]  The implication was that these brands had been playing with fire by glorifying resistance to authority and associating it with their unattainably high-priced goods, and that they accordingly deserved some share of the blame for the destructive actions of their disaffected young customer base.[68]  Whether this was a fair characterization of the rioters’ actions and motives or not,[69] public association with the lawless mayhem on Britain’s High Streets took a toll on several brands,[70] and their marketers went into “lockdown mode” to determine how best to respond to the crisis.[71]  A generation of brand renegades had become a national story.

Adidas drew attention in this story not for any specific aspect of its marketing campaign (except perhaps its choice of hip hop artists with criminal records as paid promoters),[72] but rather because so many rioters were conspicuously wearing (and stealing) Adidas-branded clothing.[73]  Like The Situation and the various hip hop artists described above, these looters had become brand renegades—due to their actions the public could not help but associate the Adidas brand with the lawless mobs in the streets.  Adidas responded vigorously against this threat to its brand image, and “took the step of condemning its customers for taking part in the riots[:] ‘Adidas condemns any antisocial or illegal activity,’ the company said. ‘Our brand has a proud sporting heritage and such behaviour goes against everything we stand for.’”[74]

Levi’s, in contrast, drew particular attention for a global marketing campaign it had unluckily launched just before the riots erupted.  The flagship television ad for the campaign, entitled “Go Forth,” is a video montage of passionate and rebellious young people set against a reading of Charles Bukowski’s poem, The Laughing Heart.[75]   In one vignette, a young man stands alone in the middle of a ransacked urban square, taunting a phalanx of riot police in view of cowering onlookers, while the narrator passes over Bukowski’s line: “you are marvelous.”[76]  The media seized on the ad,[77] and Levi’s backpedaled as hard as it could without explicitly disavowing the imagery it had used.[78] It postponed its planned release of the “Go Forth” ad in British cinemas and on Facebook, but continued to make it available on YouTube and on the campaign website.[79]  Unlike Adidas, Levi’s resorted to vague generalities and the passive voice in an attempt to put some distance between its brand image and the rioters without explicitly criticizing its young customer base:

We are deeply disheartened about the unprecedented events taking place in the UK at the moment and which have impacted communities across the country. While Go Forth is about embodying the energy and events of our time, it is not about any specific movement or political theme; rather, it’s about optimism, positive action and a pioneering spirit. Out of sensitivity for what is happening in the UK, we have temporarily postponed our cinema and Facebook spots in the country.[80]

Between the responses of Levi’s and Adidas to the UK Riots lies the limit of the win-win strategy’s effectiveness against the brand renegade.  Levi’s seemed to think it could placate the brand renegades’ social critics without alienating the renegades themselves—precisely the strategy pursued by Abercrombie & Fitch.  It attempted to do so by highlighting what its cultivated image and its brand renegades (in this case, rioters conspicuously looting Levi’s goods) have in common, while ignoring what makes those brand renegades different (and threatening to others).  Adidas clearly concluded that it could not strike this balance, and abandoned the brand renegades in favor of the rest of its customer base.  Rather than focusing on what its brand renegades have in common with Adidas’s cultivated image, the company focused on what makes the brand renegades different, and explicitly attacked it.

The judgments behind these decisions are both commercial and social.  They test the margins of profit and persuasion in the tradeoff between brand renegades and brand loyalists, all against the backdrop of a wider social audience.  Adidas, alone out of all the brand owners discussed in this Part, seems to have found itself on the wrong side of those margins.  As we approach this limit of the brand owner’s tolerance for the brand renegade, we come to the question that began this Article[81]: is there any role for law in mediating the conflict between them?

III. THE LEGAL LIMITS OF SOCIAL BRANDS

The law of trademarks and unfair competition is at its most lucid when it purports to regulate competition along commercial dimensions.  The most clear-cut applications of trademark law deal with conflicts that arise between competing producers regarding identification of the source of goods offered for sale to the public.  When a consumer thinks she is buying a quality widget from Producer A, but in fact she is getting a shoddy widget from Producer B, both the consumer and Producer A have cause to complain, and the law has long given each of them a remedy without generating significant controversy.[82]  The difficulty arises when the law tries to reach past these types of source-confusion conflicts.

A.  Trademark Law’s Expansion

Trademark law’s relentless expansion is the overarching story of the past century of development in the field.[83]  Whereas once the maker of BORDEN ice cream couldn’t recover against a company selling BORDEN condensed milk,[84] such rigid limits on the market scope of trademark rights began to erode in the early part of the twentieth century.[85]  As consumer markets expanded beyond local and regional boundaries, strict geographic limits on the scope of trademark rights eroded.[86]  And as the law’s treatment of trademark licensing went from overtly hostile[87] to broadly accommodative,[88] courts came to condemn not only commercial practices that led to consumer confusion as to source, but those which might lead consumers to mistakenly believe that a defendant is affiliated with, or sponsored by, a trademark owner.[89]  This shift, combined with the rise of product placement and embedded advertising in popular entertainment,[90] brought the producers of expressive works and cultural products into trademark law’s ambit.[91]  Finally, in 1995, Congress severed the link between competition and trademark liability for “famous” trademarks entirely, by creating a cause of action—dilution—that is explicitly available “regardless of the presence or absence of . . . competition between the owner of the famous mark and other parties.”[92]

Importantly, the expansion of liability to encompass sponsorship and affiliation confusion generates its own momentum, in what Professor James Gibson has referred to as a “feedback loop.” [93]  Uncertainty about the limits of trademark rights leads risk-averse commercial actors to submit to trademark owners’ claims (e.g., by taking a license or removing references to the mark) rather than contest them.  The observable results of this behavior then inform consumers’ perceptions as to the prevalence of sponsorship or affiliation relationships in the marketplace.  This changed understanding of consumers, in turn, expands the universe of conduct which could generate confusion as to affiliation or sponsorship.[94]  The result is that trademark liability’s boundary is never clear, and yet clearly always expanding.

B.  The Brand Renegade at the Outer Limit

The brand renegade represents the final frontier of trademark law’s expansion.  The self-generated momentum of that expansion is surely accelerated by brand owners’ decisions to co-opt (or at least try to leverage) brand renegades.  Over time, observers may come to presume that each new brand renegade is actually affiliated with the brand owner—indeed, this already appears to have happened in the hip-hop context.[95]  As subtle, informal, and post hoc cross-promotional relationships become increasingly common in the entertainment industry,[96] and as user-generated content is increasingly incentivized by marketers themselves,[97] the line between independent consumer and sponsored affiliate is already frustratingly difficult to draw.[98]  Finally, as marketers begin to turn to the same social networking tools[99] and participatory demonstrations that have recently become a hallmark of organized civil unrest,[100] it may be only a matter of time until a significant number of consumers genuinely come to believe (perhaps with good reason) that the latest riot tearing through their communities enjoys corporate sponsorship.[101]

Despite these trends, our intuition is that there must be some limit to the power of brand owners to control perceptions of their brands, particularly where those perceptions are based on our observations of actual consumers.  As Professor Rebecca Tushnet notes, “[t]here is nothing (as yet) that Coca-Cola can do to erase my memory of the time I spilled a Diet Coke into my keyboard,”[102] and it would strike us as absurd (I hope) to suggest that Coca-Cola might sue Professor Tushnet for having created such a negative association with its brand in her own mind (or, having read her article, in ours).  Similarly, I suspect most people would find it implausible that a consumer could be assessed damages for wearing Adidas to a riot,[103] that a reality television star could be enjoined from walking down the street wearing a pair of neon green Abercrombie & Fitch pants,[104]  or that a rapper could be sued for ordering Courvoisier at a nightclub.[105]  Our intuition is that there must be some intelligible limit on the legal weapons the brand owner can deploy against the brand renegade.  But where in the law are these limits to be found?

We might try to satisfy our intuition by setting certain categories of conduct outside trademark law’s reach.  For example, one could argue that consumption of a brand owner’s products, and perhaps the portrayal of that consumption in expressive works, are categories of conduct that should be outside the bounds of trademark liability.  But it is not at all clear that this is the case under current law.   Portrayals of brands in expressive works are not, as a category of conduct, beyond trademark law’s reach.[106]  And there is no doctrine that one can definitively point to in hopes of placing consumption, as a category of conduct, entirely outside of the reach of infringement liability—indeed, there is anecdotal evidence that brand owners are moving to regulate consumption directly.[107]  Moreover, consideration of doctrines that might be invoked to impose such conduct-based limits on trademark liability only serve to demonstrate the absence of such limits.

Take, for example, the doctrine of “trademark use” or “use as a mark.”  For approximately a decade, scholars and judges debated whether “trademark use” is an element of a trademark infringement or dilution claim, and if so what trademark use means and how it might be established.[108]  After the spilling of much ink, we appear to have an answer: there is no trademark use requirement at all for infringement claims,[109] but “use as a mark” is a necessary element of dilution claims.[110]  The plaintiff’s burden on this element of its dilution claim is simply to show that the defendant’s use involves some goods or services other than those of the plaintiff.[111]  This limitation on dilution claims would indeed seem to shield the brand renegade in his capacity as consumer from blurring or tarnishment liability.  But it would not shield the producers of expressive works that portray the brand renegade’s consumption, nor would it necessarily shield the brand renegade who consumes in the process of rendering entertainment services—a reality television star on a shoot, for example, or a rapper appearing at a promotional event.  And of course, both the brand renegade and the producer of expressive works portraying his consumption would find no refuge from infringement (as opposed to dilution) liability in the trademark use doctrine.[112]

As another potential doctrinal tool to limit brand renegades’ liability, consider the related but distinct requirement of use in commerce.  By both constitutional[113] and statutory command,[114] federal trademark liability may only attach to conduct that constitutes a use of a mark “in commerce”—specifically, in interstate or foreign commerce.  But only minimal reflection is required to conclude that this limitation on the reach of trademark liability offers no shelter to the brand renegade.  With respect to expressive works that are themselves released into the stream of commerce, a plaintiff would have no trouble satisfying this requirement.[115]  And as every law student learns, the scope of “commerce” subject to regulation by Congress is exceedingly broad.  It is no great leap from the proposition that a farmer can be restrained in growing wheat for his own consumption due to the effect of his self-sufficiency on the economy-wide demand for wheat,[116] to the proposition that a consumer can be restrained from consuming branded products due to the effect on the economy-wide market for that brand.  This is particularly true where there is a thriving market for brand affiliation, in which brand owners compensate consumers for their conspicuous consumption of and advocacy for the brands they enjoy.[117]  In short, the use in commerce requirement is perhaps even less useful than the trademark use requirement in satisfying our intuition against holding brand renegades liable to brand owners.

In light of these shortcomings of established doctrine in satisfying our intuitive policy inclinations, some commentators have proposed novel, alternative limits on the reach of trademark liability.  Professors Mark Lemley and Mark McKenna, for example, suggest that liability for sponsorship and affiliation confusion might usefully be restrained by investigating whether the confusion at issue in any given case is likely to materially affect consumers’ purchasing decisions, arguing that any other form of confusion is irrelevant to trademark law’s policy objectives.[118]  While the concept of materiality that Professors Lemley and McKenna borrow from false advertising law[119] is a useful criterion for restraining the expansiveness of sponsorship and affiliation confusion liability in general, on reflection it does not seem to do much work in the narrow case of the brand renegade.  Professors Lemley and McKenna argue, convincingly, that brand owners are unlikely to suffer any lost sales from most forms of sponsorship or affiliation confusion, making materiality a useful policy lever.[120]  But clearly, and particularly for brands that trade on social meaning, brand renegades do affect purchasing decisions, at least in some circumstances.[121]

C.  Drawing a Line

I propose that the intuition against imposing liability on brand renegades is better served by a principle that has historically served to limit trademark rights: freedom of expression.  Professors Lemley and McKenna cite this principle as one justification for their materiality proposal,[122] but with respect to brand renegades, it is likely the entire issue.  At stake in the conflicts described in Part II of this Article is the balance between the expressive interests of brand owners and the expressive interests of brand renegades with respect to the social meanings of the brands in which they each claim a stake.  The ultimate question is: will the law give either of these parties any preference in constructing those meanings?

Professor Thomas McCarthy, the author of the leading American treatise on trademark law, has advanced the argument that a trademark owner has a First Amendment interest in not being associated with controversial persons (such as brand renegades) and the negative social response to them.[123]  Notably, though, Professor McCarthy’s argument on this point claims exactly zero support from the trademark caselaw.  In contrast, First Amendment concerns are reflected in numerous trademark law doctrines under which courts have shielded persons other than the brand owner from liability: the protection of criticism[124] and parody;[125] the cabining of infringement claims against the titles[126] or contents[127] of expressive works; the doctrines of descriptive fair use[128] and nominative fair use;[129] and the statutory limits on dilution claims,[130] to name just a few.  In general, these doctrines recognize that overbroad assertions of trademark rights can inhibit the expression of ideas that either promote competition (in the case of fair use) or provide socially useful information regarding trademarks and their owners (in the case of defenses for parody and criticism).  To avoid such chilling effects, the law limits the control mark owners may assert over the uses others make of their marks.^[131]

In many—if not most—of these doctrines courts tend to suggest that the First Amendment interest may be vindicated only where (or even because) there is as a factual matter no consumer confusion of which the brand owner might complain.[132]  But it must be admitted that this is unlikely to be true for brand renegades.  As discussed above, brand renegades by definition affiliate themselves with some aspects of the brand, and as brand owners continue to co-opt and leverage brand renegades, consumers are increasingly likely to be confused as to whether the affiliation runs both ways.  Merely protecting brand renegades who do not confuse as to affiliation or sponsorship is unlikely to avoid trademark infringement liability in the modern marketing environment.  The principle of freedom of expression must trump the concern over confusion for us to conclude that the conduct of brand renegades is not actionable.

One doctrine reflects precisely such a prioritization of interests, and it is directly applicable to one of the categories of conduct that is the subject of our intuition against the imposition of liability.  This is the strict test for infringement applied to expressive works.[133]  Under Rogers v. Grimaldi[134] and its progeny,[135] such works will infringe a trademark only where their use of the mark has “no artistic relevance” to the underlying work.  Characterized as an exercise in “balance,”[136] this standard explicitly accepts some degree of confusion in order to avoid chilling expression.[137]  Application of Rogers would almost certainly protect a rapper in his lyrics and a reality television producer in its broadcast, while analogous constitutional privileges of the press would surely protect a newspaper in its coverage of a riot.[138]  While the caselaw interpreting the federal dilution statute is more limited, it suggests a similar result in dilution actions.[139]  Nevertheless, it is not clear that the subjects of these expressive works—the consumer brand renegades themselves—would enjoy similar protection.  Indeed, if Professor McCarthy’s view is correct, there might be some justification for imposing liability against consumers who create such associations.

Thus we come, finally, to the ultimate question: whether the brand renegade, who alters a brand’s social meaning by the mere act of conspicuously consuming it, is within the reach of trademark liability.  If our intuition is that the answer to this question must be no,[140] I submit that this intuition can be justified only by recognizing through law what consumer psychologists have concluded through research:[141] that for brand renegades as for the rest of us, consumption itself has an expressive character.[142]  If the reason for tolerating confusion with respect to the expressive works described in the last paragraph is that there is social value in the expression inherent in portrayals of a brand renegade’s consumption, it follows that the ultimate source of that value is the consumptive act itself—passing the Courvoisier, donning Abercrombie & Fitch pants, or wearing Adidas on a looting spree.  As discussed in the first Part of this Article, we engage in such consumption in no small part to forge our social identities, to communicate those identities to others, and to modify our identities in response to similar communications we receive through others’ consumption.[143]  Where that consumption relates to branded goods, the brand itself becomes in at least some measure the subject of a social, not just a commercial, discourse.

The possibility of socially expressive consumption is not novel—quite the opposite.[144]  But it is a possibility that American trademark law has yet to fully grapple with—perhaps because the expansion of liability under that body of law is only now reaching the point where consumption itself is implicated.  Where the law and commentary have recognized First Amendment interests, it has generally been with respect to either talking about (and perhaps critiquing) a brand’s cultivated associations, or directly invoking those associations as a kind of shorthand vocabulary.[145]  The brand renegade forces us to recognize a new category of expression—one which both appropriates some aspects of a brand’s meaning and alters that meaning by giving it new social context.  We must recognize that consuming a brand can in itself be a form of commentary on and critique of the social meanings inherent in that brand—particularly where the brand owner explicitly trades on those meanings by cultivating personality associations in its marketing.

As brand renegades continue to engage in this form of expression, and brand owners increasingly conflict with them, we are sure to be called on to integrate that conflict into the uneasy legal balance between the ever-expanding sphere of trademark liability and our First Amendment principles.  I submit that in this narrow context, the balance is a relatively easy one to strike.  Professor McCarthy argues that brand owners should be permitted to contribute to a brand’s social meanings, but that nobody else should (at least not without the brand owner’s approval).  He argues, in short, for judicially enforced viewpoint-based restrictions on expression.  In contrast, the intuition against liability that has been the subject of the investigation in this Part demands no such discrimination; it merely demands that the law treat the brand owner and the brand renegade on equal footing with respect to their contributions to the social meaning of a brand.  As between these two alternatives, the intuition investigated in this Part fares far better under the First Amendment than Professor McCarthy’s alternative.[146]  Doctrinally, I propose that the best vehicle for the intuition I have attempted to vindicate in this Part is to extend the balance struck byRogers and its progeny (and the analogous dilution authorities)[147] from the case of expressive works to the case of expressive consumption.  Absent an explicit claim by the brand renegade that the brand owner approves of his conduct,[148] the expressive dimension of his consumption deserves protection from trademark liability.

CONCLUSION

In this Article, I have argued that conspicuous consumption of brands whose owners have cultivated particular social connotations is, in itself, an expressive act.  This act cannot help but contribute to the social meanings of the brand itself, and as brand owners increasingly try to actively manage such associations, public confusion as to affiliation or sponsorship may result.  Where the consumption is performed by a brand renegade—someone who identifies with some aspects of the brand’s cultivated image but who also generates social meanings inconsistent with that image—we face a conflict for control between the brand renegade and the brand owner.  My argument in this Article—as elsewhere[149]—is that in this struggle to control social meaning, which implicates not only the identity of the brand but the identity of members of a community, both parties ought to be equally free to make their case, and the social audience should be free to decide between them.[150]

INTRODUCTION

Genetic diagnostic tests promise a wealth of benefits. They can figure out if a particular drug will work in your body, tell you what disease you have, or one you might get. There are two main types of genetic diagnostic tests, commercially developed “kits”—complete test systems with all the components and instructions needed to conduct the test that are sold to multiple labs—and “laboratory-developed tests” (LDTs)—preassembled test systems intended for use at a single laboratory.[1] Unlike kits, LDTs are sold to individual health care providers and directly to patients.[2]

Until recently, the Food and Drug Administration (FDA)  regulated commercially developed kits, but did not regulate LDTs, even when the two performed the same function.[3] In 2010, the FDA decided to start regulating all laboratory-developed tests. However, regulation does not occur in a vacuum, and increased regulation necessitates increased outlay for companies seeking to market genetic diagnostic tests.

For drug companies, the risk that a product will require extensive ex ante investment in clinical trials but may not be approved for market release is mitigated by the presence of drug patents, and to a lesser extent, by statutory data exclusivity.[4] Both ensure that if a company succeeds in getting a drug past clinical trials and onto the market, then a competitor will not be able to copy their drug and unfairly profit without an initial outlay. Because the patentability of diagnostic tests is uncertain,[5] diagnostic test companies do not enjoy the same level of protection as drug companies. If the FDA expands the scope of regulation without the backstop of patent protection, it seems likely that the current booming market for genetic diagnostic tests will wane, to the detriment of consumers. To combat this result, I address three principle options:

1. Require no regulation, but create no change in the status of patentable subject matter. Effectively, this option maintains the status quo and responds to critics’ suggestions that the FDA is expanding its reach too far by regulating genetic diagnostic tests.
2. Pursue regulation, but create a per se patentable subject matter rule for diagnostic tests to balance the additional expense (notwithstanding additional barriers to patentability), creating a baseline similar to that for pharmaceutical drugs.
3. Create a new regulatory regime that balances the additional expense of regulation through data exclusivity and limiting additional regulation to only the most necessary areas.

In exploring these options, this paper proceeds in five parts. Part I outlines the current regulatory framework and the FDA’s recent shift in regulation. Part II covers the main problems with the current unregulated market for genetic diagnostic tests and concludes by eliminating the first principal option. Part III addresses the current framework for patentable subject matter and discusses whether a per se rule would fit within this regime. In Part III, I determine that a twenty-year patent term may provide too much protection for genetic diagnostic tests, particularly considering that enforcement of such patents serves to limit consumer choice and may stifle innovation. Part III further finds an appropriate alternative to be FDA-mediated data exclusivity, as seen with the Hatch-Waxman Act.

Part IV addresses what regulatory changes are necessary to accommodate the unusual needs of genetic diagnostic tests. The solutions suggested would reduce the ex anteuncertainty facing diagnostic test companies by clarifying the classification regime in the FDA, creating mandatory maximum times for approval within the FDA, streamlining complaint procedures to ensure that any issues with tests are quickly corrected, particularly for software and internet-based tests, and most importantly, creating a data exclusivity backstop for diagnostic tests that fall outside the scope of patentable subject matter. Corresponding solutions would benefit consumers by strengthening labeling requirements and genetic counseling for particular test varieties and increasing methods of keeping up with new technology in this field. Finally, Part V applies this new regulatory system to a purely computational genetic diagnostic test, which I believe to be emblematic of genetic diagnostic tests in the future.

I. CURRENT REGULATORY FRAMEWORK FOR GENETIC DIAGNOSTIC TESTS AND THE DANGERS OF INCREASED REGULATION

In this section, I discuss the current regulatory framework for genetic diagnostic tests, beginning with a short background of how institutional relationships led to the FDA’s current framework. Subsequently, I address the main problems with the regulatory framework that increased regulation would exacerbate and the negative impact that expansion could have on the genetic diagnostic test industry, namely, (1) the delay in time-to-market for the tests; (2) the uncertainty as to the classification of a particular test, and (3) the absence of any exclusivity backstop to prevent copying by competitors after approval.

A.  Institutional frameworks at the FDA

According to the traditional “transmission belt” theory,[6] Congress creates rules that govern agency action, the agency adopts procedures that adhere to those Congressional directives, and these processes are kept in check through judicial review. However, unlike other agencies that adhere to the traditional “transmission belt” theory, the FDA is a particularly powerful agency that takes a greater role in governance than mere transmission.[7] The increasingly difficult subject matter that the FDA regulates creates a situation where Congress and the courts simply do not have the necessary expertise to create specific policies governing drugs and devices. Indeed, well-known practitioner Thomas Austern has criticized the FDA’s substantial power, alleging that it was “delegation running riot”.[8] Historically, Congress and the courts have stepped in to curtail FDA power in one of two situations: (1) when a high-risk product creates public outcry and (2) when FDA regulation injures industry substantially.

The FDA originated out of concern about high-risk products—Congress created the agency in response to Upton Sinclair’s 1906 book The Jungle and its exposé of the meatpacking industry.[9] Subsequent expansion continued in response to other high-risk disasters. The 1938 Act[10] responded to medicines for children that had been mixed with antifreeze.[11] The 1962 Kefauver-Harris Amendments responded to the narrowly averted Thalidomide disaster.[12] Further, during the 1960s, all but one of the Congressional oversight hearings were conducted to criticize the FDA for failing to take adequate regulatory action against products that the committee concluded were safe or ineffective.[13]

Congress also traditionally steps in when FDA involvement threatens to substantially injure industry. This second situation  may be a result of agency capture and Congressional interests in the industry. Established companies who get many products approved by the FDA have developed long-standing relationships with the agency, particularly given a “revolving door” between the agency and corresponding companies. Since these established companies are familiar with existing FDA procedures, they are unlikely to lobby Congress to change that framework. Even when FDA procedures are onerous, established companies are likewise better equipped to deal with them, often to the detriment of smaller entities. As those small companies are unlikely to have sway in Congress, the framework remains unchanged until problems become large enough to attract the attention of the general public or established companies. The high-risk disasters discussed supra are examples of FDA change in response to problems that affect the general public. More recently, changes at the FDA have come from established companies that helped enact legislation to make the FDA more efficient, most notably the Prescription Drug User Fee Act,[14] or to reduce adverse effects on industry from increased regulation, as with the Hatch-Waxman Act,[15] discussed infra.

Because of the significant discretion given to the FDA by Congress and the courts, the agency is adept at responding to technological changes. Instead of relying on rulemaking or case-by-case adjudication like most agencies, the FDA promulgates new policies through guidelines, which often have a de facto binding effect because of the close relationship those companies have with the agency. If the company is able to follow the guidelines, it is in their best interest to do so because going against the FDA’s policies could put their entire line of products at risk. Of course, the agency would not retaliate by refusing to approve a particular product, but may delay the approval or requests for additional clinical trials, which increase expenses to the company with little corresponding benefit to the consumer. Finally, the FDA and its counterpart state agencies have fared extremely well in the courts.[16] When faced with complex scientific and technical issues, judges have been reluctant to overrule decisions made by the FDA, and the Supreme Court has repeatedly upheld the power of the FDA to protect the public from “dangerous products.”[17] Furthermore, because judges generally do not choose which cases they will adjudicate (although the Supreme Court does to a certain extent), the courts cannot provide a reliable mechanism for effecting policy, except in a reactive fashion. Despite these limitations, the courts have acted to influence policy in this area in two ways: (1) by curbing FDA procedural irregularities and (2) by marshalling public opinion of high-risk products through lawsuits. The main target of courts is the non-binding guidelines discussed supra, which have been struck down by courts when they become too much like binding regulations without any of the requisite procedural mechanisms.[18] The result has been an FDA policy in which the guidelines are never actively enforced, but upheld through extra-legal mechanisms. As for the marshalling of public opinion of high-risk products through lawsuits, many tort suits and class-actions have created changes in the way that the FDA approaches regulation. Although most of these suits target the individual companies rather than the FDA, because companies seek to avoid similar situations in the future, large entities may actually seek increased regulation from the FDA to avoid tort liability.

This backdrop has led to the current state of genetic diagnostic test regulation. Until recently, the FDA had not exercised its enforcement discretion to regulate most genetic diagnostic tests. Because the adverse effects from the unregulated market for genetic diagnostics are not likely to surface for many years due to their predictive nature, there is not likely to be a “Thalidomide moment” in Congress or the courts for such an industry. Furthermore, most industry players have benefited financially from the FDA’s neglect, and consumers are much less able than either large or small companies to lobby Congress for increased regulation.

B.  FDA shift in regulating genetic diagnostic tests

The majority of genetic diagnostic tests fall within the category of “lab-developed tests,” which until recently, were completely unregulated by the FDA. Instead, laboratory procedures used in such tests were subject to minimal regulation under the Clinical Laboratory Improvement Amendments of 1988 (CLIA) through the Centers of Medicare and Medicaid Services (CMS).[19] CLIA applies to all clinical laboratories that operate or provide testing services in the United States[20] and mandates that laboratories not accept materials from the human body for testing without adequate certification. In 1992, CMS issued regulations for implementing CLIA, creating “specialty areas” for laboratories that perform high-complexity tests, but did not include genetic diagnostic tests.[21] CMS had not instituted specific requirements for molecular or biochemical genetic testing laboratories by 2010.[22] Likewise, CLIA can only regulate a laboratory’s analytical validity (whether a test properly measures the characteristic it was intended to measure[23]), leaving clinical validity considerations (whether or not the test actually diagnoses the condition) up to the laboratory director.[24] The FDA currently regulates clinical validity for experimental diagnostics to some extent.[25] For example, suppose that a laboratory hypothesizes that a given gene sequence is associated with a particular disease. If the laboratory wished to offer this test to volunteers to bolster their confidence in this correlation, the FDA would require that the Internal Review Board of the institution oversee all such studies and inform the volunteers of the test’s experimental status.[26]

More generally, the FDA regulates devices using biological materials outside the body (in vitro) differently depending on whether they are commercially available kits or lab-developed tests. The FDA regulates kits as medical devices,[27] which are organized into three classes. In contrast, lab-developed tests presently fall within the discretion given to the laboratory director under CLIA,[28] leading to two separate options for genetic diagnostic tests: one for commercially available kits and another for lab-developed tests administered by CLIA-regulated labs.[29] Many have complained that this creates an uneven playing field between these two categories.[30]

In 2007, the FDA changed course and decided to regulate lab-developed tests more stringently to address the uneven field. There were a number of reasons for this change. Early lab-developed tests were limited to small entities, with close relationships between the physician or technician performing the test and the patient.[31] More recently, it became clear that the laboratory developing the test was actually a large corporation interacting with the patient only through the postal system.[32] The complexity of the tests had also increased in recent years.[33] Finally, the Secretary’s Advisory Committee on Genetic Testing had recommended that the FDA become more involved in pre-market review of these tests.[34]

This 2007 guidance stated that the FDA would require pre-market review for a limited subset of lab-developed tests known as in vitro diagnostic multivariate index assays (hereinafter, “algorithm assays”). These algorithm assays analyze laboratory data using an algorithm to generate a result for diagnosing, treating, or preventing disease[35]. The agency was particularly concerned about this subset of lab-developed tests because they use proprietary methods to calculate patient-specific results that healthcare providers are unable to independently derive or confirm.[36]

In 2010, the FDA decided not to issue final guidance on algorithm assays, and instead chose to pursue comprehensive regulation of all laboratory-developed tests.[37] In doing so, it recognized that the absence of oversight may make it easier for laboratories to develop and offer tests quickly, but believed that comprehensive regulation would create a level playing field.[38]

C.  The three classes of devices for FDA approval

This section examines the framework currently used for those genetic diagnostic tests (kits) that are regulated by the FDA. Because the FDA will likely proceed under a similar framework for future genetic diagnostics that fall within its enforcement discretion, I treat this classification system as a baseline for future suggestions for regulation in Part IV.

Under the Medical Device Amendments of 1976,[39] once the FDA classifies a test as a medical device, it places the product into one of three classes of regulation. Class I, or low-risk, products require no approval before sale, although the FDA monitors adverse effect reports after sale.[40] Class I devices includes items like bandages where there are likely to be few ill effects even from device misuse.[41]

Class II, or moderate-risk, products require clearance of a pre-market notification submission known as a 510(k).[42] The 510(k) submission requires a comparison of the submitted device with a legally marketed device and a showing that they are substantially equivalent.[43] There are also de novo classifications for Class II items that have no identifiable predicate device.[44] Class II devices may require additional clinical testing, but generally do not. Clinical testing in this context does not necessarily mean randomized, double-blind studies; submissions can rely on published studies or earlier data, although the FDA prefers studies where samples are prospectively collected.[45] The 510(k) requirements were envisioned as an efficient regulatory option: allowing companies to build upon established clinical and scientific evidence of safety.[46] As a result, the 510(k) option is more widely used than the Pre-Market Approval (PMA) option, discussed infra.[47]

Finally, Class III, or high-risk, products require submission of an application for Pre-Market Approval.[48]  PMA is the FDA process of scientific and regulatory review to evaluate safety and effectiveness. These devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health, or present an unreasonable risk of illness or injury, including patient misuse.[49] Examples include diagnostics for Hepatitis B and C and for HPV.[50] Regardless of whether the company follows the Class II or Class III pathway, the FDA may request that the company provide clinical data to support clearance or approval.[51] After the introduction of any product (of any class), adverse events must be reported to the FDA, even if such malfunctions do not cause any injury.[52]

The FDA estimates that 50 percent of regulated devices are Class I, 42 percent are Class II, and only eight percent are Class III.[53] In the 2007 draft guidance, the FDA stated that most algorithm assays would be Class II or Class III devices, depending partly on the seriousness of the disease measured.[54] Although the requirements after classification are very clear, the FDA has been unclear about why certain devices fall into certain classes. Furthermore, given the deference accorded the FDA by the courts, it is difficult to change the classification of a device subsequent to FDA classification. The overlap between Class II and Class III indicates a need for increased clarity in device classification, including ex ante categories for genetic diagnostic tests. This is particularly necessary given the letters that the FDA has sent out to diagnostic test companies requesting that they submit information for approval and regulation pursuant to its enforcement discretion, discussed infra.

D.  Choice of classification delays market entry and can be uncertain

The FDA’s decision to place a product into one of these three classes can make a substantial difference in both the expense associated with clinical trials and the amount of time that it takes before the product can enter the market. At the same time, empirical data shows that the European Union (EU) regulates many of the same products, but that these products are introduced many months or even years earlier in Europe than in the United States.[55] Because the FDA is planning to expand this regulation further, this indicates that previously unregulated products may be particularly affected by this disparity in time-to-market. The data suggests two solutions, (1) that the FDA create more stringent time limits on the approval of medical devices and (2) that the FDA provide greater transparency as to why they have chosen to classify a particular device into a given class, thereby enabling companies to better predict their expenses.

A recent survey of 204 public or venture-backed medical technology companies compared the efficiency of the FDA’s regulation to equivalent EU practices and concluded that despite having similar safety outcomes, the FDA’s current practices are less efficient than the agency’s European counterparts.[56] Although some delays were caused by personnel changes during the approval process,[57] the average review time for a Class II product from first filing to clearance was ten months, suggesting that the FDA requirements are particularly onerous.[58] For those companies who communicated with the FDA prior to making a 510(k) submission, the total time from that first communication was nearly three years compared to seven months in Europe.[59] The average total cost for participants to bring a low-to-moderate risk 510(k) product from concept to clearance was approximately $31 million, with $24 million spent on FDA dependent activities.[60]

For Class III products, the average review time increased to 54 months, almost four years longer than European agency review for the same products.[61] At least some of this delay stems from increased risk aversion to new products at the FDA.[62] For higher-risk products that require pre-market approval, the average total cost from concept to approval was approximately $94 million, with $75 million spent in stages linked to the FDA.[63] Because of the additional time spent in the regulation process, as well as the additional funds used, earlier expansions in FDA regulatory authority have been financially detrimental to the regulated industry.

This extensive time frame is exacerbated by the uncertainty as to how the FDA will classify the newly regulated diagnostic tests. In 2010, the FDA sent several letters to genetic testing companies, including a letter to the genomic chip manufacturer Illumina.[64] The letter to Illumina stated that their chip (used to sequence genes) was classified as a device under the FDCA and had not been submitted for pre-market clearance or approval.[65] The letter further suggested that the agency could consider the chip a Class III device.[66] Similar letters were sent to deCODE Genetics, Navigenics and 23andMe, which use the Illumina chip for use in testing kits.[67] These letters stated that these products did not fall under the category of lab-developed tests because they were not “developed by and used in a single laboratory,”[68] and because the collection kits were distributed through a website or by a third party distributor.[69] All three letters intimated that such kits were considered Class III devices and required Pre-Market Approval submissions. A fifth letter was sent to Knome, which provides whole-genome sequencing and software to interpret this data.[70] Here, the FDA specifically stressed that as a software program that analyzes genetic test results generated by an external laboratory, the product is a diagnostic device that requires pre-market approval under the FDCA, and because it was not within a single laboratory, it was not considered a laboratory-developed test (which were then unregulated).[71] Fourteen additional letters were sent to other companies suggesting that their devices may require pre-market approval under Section 201(h) of the FDCA, although they did not suggest that they were Class II or Class III devices.[72] These letters suggest that these genetic diagnostic test manufacturers may need to go through the onerous Class III approval process, likely delaying the time-to-market for these devices even more.

E.  Historical expansion of regulation has been alleviated by commensurate expansion in patent and FDA-mediated data exclusivity

This section shows that historical instances of regulatory expansion of previously unregulated products did have negative impact on those industries, and suggests that similar concerns about increased regulation of genetic diagnostic tests today are well-founded. Congress responded to negative results and complaints from industry by providing for greater patent exclusivity and for a new data-exclusivity backstop, which helped to reverse the trend in fewer drug approvals following increased drug testing regulation. These historical results suggest that there is no need to wait for a negative impact on diagnostic tests to aid the industry, particularly after many of these companies may choose to relocate to Europe, and provides support for the exclusivity solutions explored infra in Part III.

As mentioned, the expansion of pre-market scrutiny by the FDA is not new. In 1962, the revolutionary Kefauver-Harris Amendments significantly expanded the FDA’s ability to regulate drugs before they went to market.[73] As a result, thirteen out of fourteen new products regulated by the FDA took longer to get to market in the United States than in other countries.[74] Without the protection of patents, it is unclear whether manufacturers would have invested the significant funds required for product approval.[75]Indeed, the delay in reaching market was already hurting the pioneer drug manufacturers by eating away at their patent term. In response, because generic manufacturers were subject to similarly stringent requirements, the pioneer drug manufacturers obtained court decisions preventing generic manufacturers from beginning clinical trials while a brand drug was still under patent.[76] The solution to these tactics was the Drug Price Competition and Patent Term Restoration Act of 1984 (hereinafter “Hatch-Waxman,” the names of its two sponsors), which tied the extension of patent terms to the period spent in the FDA approval stage.[77]

The unusual thing about Hatch-Waxman is that in addition to providing a handy mechanism for resolving conflicts between pioneer drug manufacturers and generic drug manufacturers, it also provides for three-year data exclusivity for performing further clinical studies.[78]  This means that for a generic company to gain FDA approval even afterthe expiry of the pioneer patent term, they must perform their own clinical trials rather than rely on the data from clinical trials performed by the pioneer drug manufacturer, or wait five years until this period of exclusivity expires. The Hatch-Waxman exclusivity period does not apply to medical devices, but the subsequent Safe Medical Devices Act of 1990 created a six-year data exclusivity provision for Class III devices[79]  subject to PMA requirements.[80] As discussed earlier, there are very few Class III devices approved each year, but some Class II devices still require clinical trials. A baseline level of exclusivity for any diagnostic test that needs clinical trials for approval or reclassification by the FDA would help to alleviate the uncertainty created by the current patentability status discussed in Part III.

To ensure that the expansion of regulation does not hurt companies, it is insufficient to simply apply the current medical device framework used for kits to all genetic diagnostic tests (including LDTs). Instead, we should pursue a framework that would reduce the significant times required in device approval, as well as clarify device classifications to ensure that diagnostic companies are prepared for the investment that the approval process would require. In addition, companies’ investments in clinical trials should be protected with either a patent or a data-exclusivity backstop.

II. WHY WE NEED BETTER REGULATION OF GENETIC DIAGNOSTIC TESTS

As discussed in Part I, the FDA is currently overhauling the regulation of diagnostic tests to include additional regulation of genetic diagnostic tests. Additional regulation, particularly where FDA classifications of such devices is unclear, could be damaging for the industry. Critics find the expansion of FDA oversight into this sector as emblematic of FDA overreach stifling industry and suggest that the agency avoid expanding its enforcement discretion to regulate laboratory-developed tests.[81] However, this section discusses why additional regulation is necessary for these laboratory-developed genetic diagnostic tests and why this expansion is beneficial for consumers.

Diagnostic tests detect the presence of a condition by measuring some quantity associated with the condition. Similarly, genetic diagnostic tests can predict an individual’s propensity for a condition based on their nucleotide sequence, as discussed infra. If such tests worked perfectly to predict disease and provided completely clear information to patients who use the tests, there would be no need for regulation. Unfortunately, this is not the case.

First, I address common errors made in diagnostic genetic testing and the role that regulation may play in minimizing such errors. These common errors include: (1) errors caused by using molecular markers rather than sequencing the whole genome; (2) errors due to variations in gene expression between individuals; and (3) errors resulting from statistical studies relied upon in designing the test, which are compounded by the complexity of gene interactions. Oversight by a regulatory agency, such as the FDA, would reduce the occurrence of these errors and increase the utility of such tests for consumers.

To understand these problems, this section discusses the principles that enable genetic diagnostic tests to function and explains where these principles break down, resulting in errors in the test results. All humans have strands of DNA comprising four fundamental nucleotides, Adenine (A), Thymine (T), Guanine (G) and Cytosine (C).[82] The sequence of these nucleotides form genes, which determine which proteins the body produces, and thus determines how the body functions.[83] Within every species, there are variants of genes known as alleles.[84] To use a simplified example, not all humans have the same eye color. However, we all have genes that affect eye color, such that some of us have a blue-eye color allele whereas others may have alleles for brown or green eyes.[85] Certain alleles are more likely to lead to diseased conditions than others. [86] For example, a mutant allele of a gene known to repair damaged DNA may be less effective at repairing such damages than the normal allele.[87] Because the DNA cannot be repaired, individuals with the mutant allele may have diseases caused by the damaged DNA, including colon cancer.[88] Therefore, a genetic diagnostic test may be able to predict the development of  cancer by detecting the presence of the mutant allele.

One method for detecting the presence of a mutant allele is by sequencing all of the nucleotides. A possible issue with sequencing is that a genetic diagnostic test may return an incorrect sequence, reading “ATAC” when a subject actually has “ATGC”, demonstrating a failure of analytical validity.[89] A recent study compared the data of five individuals sequenced by two different genetic testing companies for thirteen diseases.[90] The results of the tests were 99.7% the same between the two companies, suggesting that the analytical validity for unregulated tests (the status quo) is quite high.[91] Even those companies that have been criticized for their inaccuracy do not have analytical validity thresholds below 99%.[92] Therefore, the issues in this section focus on issues aside from analytical validity.

A.  Molecular markers that do not correctly predict the presence of a disease allele

Although whole genome sequencing (where every nucleotide is sequenced) is the best way to detect the presence of certain genes, it currently costs approximately $20,000 per person.[93] To save costs, companies use molecular markers that are statistically associated with the presence of certain mutant alleles.[94] The use of molecular markers means that rather than sequencing A, T, G, and C, a company may only sequence the starting “A” and determine the remaining nucleotides based on their statistical analyses. A simplified example can help to illustrate how molecular markers are able to replicate full sequencing. Suppose that, in addition to having brown eyes and blonde hair, your mother also had an unusual allele that protected against the bubonic plague.[95] If your mother’s ancestors lived in areas where the plague was prevalent, those individuals who did not have this allele would be more likely to die. Soon, the population would have a high prevalence of the plague protection allele and the alleles surrounding that allele on the chromosome. If those alleles were for blonde hair and brown eyes, this population would likely share those characteristics as well. However, if the correlation between blonde hair and the plague allele were perfect, there would be no error from using the blonde hair as a marker for the actual allele. As discussed infra, such a perfect correlation, however, is seldom the case. Sometimes the statistical assumptions used may be incorrect, causing errors in the genetic results reported to consumers. Events such as “cross-over” between genes may cause such errors. Humans have two copies of each gene, one from each parent.[96] For example, while your mother might have blonde hair and brown eyes, your father might have black hair and blue eyes. Let us also assume that the genes corresponding to hair and eye color are next to each other on the same chromosome.[97] If you inherited one copy of each gene from each parent, you would have one copy with blue eyes and black hair and the other copy with brown eyes and blonde hair. Assuming that your father’s genes were dominant, no child would ever have blue eyes with blonde hair or brown eyes with black hair.[98] Therefore, to create beneficial variation in the population, chromosomes “cross-over” one another in sex cells, yielding new chromosome combinations like blue eyes with blonde hair and brown eyes with black hair.[99]

Such natural variation makes the job of genetic diagnostic test companies more difficult. Returning to your mother’s hypothetical plague protection allele associated with her blonde hair and brown eyes, a genetic test company may always assume that any blonde-haired, brown-eyed individual possesses the unusual allele. However, if an individual has either had a cross-over event between the plague allele and their hair color allele, the genetic diagnostic test will yield incorrect results. An error like this can lead to a false negative or a false positive result. Such errors are more likely when the company is using a “weak-effect” marker—one where the correlation between the marker and the full nucleotide sequence is statistically tenuous. Additional regulation can alleviate this concern by either requiring full sequencing for certain regions of the genome that incur many cross-over events or by requiring that companies rely on multiple markers (or a single “strong-effect” marker) rather than a single “weak-effect” marker.[100]

B.  Mistakes in genetic test interpretation occur because of genetic and environmental variation

Another regulatory criterion is clinical validity, the accuracy of a test in actually diagnosing a particular condition.[101] Regulating clinical validity is more difficult because of the interpretation involved, and because of genetic concepts known as “penetrance” and “expressivity.” This is largely because consumers can find it difficult to understand that a heightened risk of breast cancer from a single gene can mean anything from never developing breast cancer to dying from the disease in the next ten years.

Penetrance is the percentage of people with a particular genotype (nucleotide sequence) who show the diseased phenotype (physical manifestation of the allele).[102]Expressivity, on the other hand, is the intensity of the phenotype expressed by someone who possesses a particular genotype.[103] These variations among individuals present the most difficult challenges for genetic test regulation.

Genetic diagnostic tests would be easier for consumers to understand if explained by a physician intermediary, who could show that the same mutation could lead to widely varying results in onset of the disease, as discussed in the earlier example. However, unlike similar non-genetic diagnostic tests, genetic diagnostics are sold and marketed directly to consumers, presenting a challenge for regulators.

This problem is exacerbated because an interpretation error can lead to dire results. Suppose a company sequenced a subject’s genes for repairing damaged DNA and found that the woman carried the disease allele for BRCA1, a gene associated with the onset of breast cancer.[104] The woman may not develop breast cancer in her lifetime—a penetrance problem—or may develop a form that does not rapidly metastasize—an expressivity problem.  Indeed, very few diseases have 100% penetrance, where all of the individuals with a particular genotype have the corresponding disease.[105] As a result, interpretation of the test results remains difficult even with the knowledge of the full sequence.[106]

Expressivity is a lesser concern for clinical validity because such variation arises once the individual has the disease. However, for serious diseases, individuals may take action based on these disease risk profiles when in reality their disease expression may be very low based on other risk factors, such as age and lifestyle.[107]  As a result, much of the regulation in this area will depend on what information the company provides to consumers. If the genetic diagnostic testing company only provides the sequence with no additional information, very little regulation may be necessary. On the other hand, if the company provides extensive information, such as “breast cancer will appear at age thirty-four,” such claims require more regulation because consumers are more likely to rely on such information for treatment purposes.[108]

The molecular markers problem compounded with expressivity and penetrance strengthens the case for regulation; even with a perfect correlation between “A” and “ATGC”, it is not clear that the disease associated with “ATGC” may present in the individual. It is even less likely that the disease associated with “ATGC” will present in an individual who actually has “AAGT”. Because of the research used to create these correlations, an individual with characteristics different from the majority population, particularly race, has a much higher likelihood of having test results that are not actually correlative.[109] These factors support the use of strong-effect markers, which move diagnostic companies closer to “perfect correlation”. As it stands, when companies sequence strong-effect markers, the agreement between multiple testing companies is higher than when companies use weak-effect markers (that have more moderate effects).[110]

To use the earlier example, suppose your mother’s ancestors did not live in an environment where the plague was prevalent. Rather than facing evolutionary pressures when the plague allele was not present, individuals without the allele would survive at the same rate as the rest of the population. As a result, the population would show a very different distribution of alleles from the original example and the molecular marker of blonde hair would be less helpful. Regulation can mitigate such problems by requiring that consumers receive additional information about the studies that produced the genetic testing data and by creating greater incentives to include a wider population in initial genome-wide-association studies.[111]

C.  Mistakes in genetic test interpretation occur because of unforeseen interactions between genes

Not all genetic tests simply convey the likelihood of a single disease based on a single gene. Many tests predict propensity for a disease or for reoccurrence of a condition based on algorithms that approximate the disease pathway.[112] For example, scientists believe that many genes affect the development of schizophrenia.[113] By putting together multiple genotype markers from different locations on the genome, a company could predict an individual’s likelihood of developing schizophrenia. However, if there were errors in developing this algorithm, this clinical prediction would be wrong. Indeed, the chance of error is very high because the interactions between genes can be unpredictable and small-effect genes can be difficult to find. For instance, one study found that a predictive test using the cumulative effects of thousands of small-effect genes was more accurate at predicting the existence of schizophrenia than a test using only major-effect genes.[114]

One way that this sort of error can occur is when a lab relies on a meta-analysis, a type of study that puts together data from multiple studies to deduce the interactions between different genes. The problem with meta-analyses is that the actual interaction between two particular genes may not have been tested directly, which could lead to incorrect conclusions. One possible cause for this error is when the two genes are on the same pathway that leads to the disease.[115] In most cases, if gene Z affects a function earlier in a molecular pathway than gene Y, it does not matter if the allele at gene Y carries a mutation, since the pathway would have already been altered due to a mutated allele at gene Z.[116] For a simple example, consider the genes that control certain properties of human hair: suppose that gene Z governs hair growth and gene Y governs hair texture. If the individual carries an allele at gene Z that prevents hair growth entirely, it does not matter if the allele at gene Y is for curly or straight hair, the individual will be unaffected. A meta-analysis of genes like Z and Y might infer increased effects from mutations at both genes when the actual effects remain the same when both genes are present.

Even with perfect testing results, there are dangers in how companies present their data to patients.[117] Is it sufficient to say that the patient has an increased likelihood of developing disease sometime in their life? This may depend on the seriousness of the disease tested, and even the character of the testing service. The common errors with (1) molecular marker technology, (2) disease phenotype variation from expressivity and penetrance, and (3) the interaction between different genes show that regulation of genetic diagnostic tests is necessary. Therefore, continuing the status quo of minimal regulation is not a valid option, despite the possible adverse effects on industry.

III. IS A PER SE PATENTABLE SUBJECT MATTER RULE FOR GENETIC DIAGNOSTIC TESTS THE SOLUTION?

Now that we have established that there must be some regulation for genetic diagnostic tests, this section examines e statutory or judge-made exclusivity for diagnostic tests to help underwrite the costs of such regulation and bolster the financial viability of genetic testing companies. One such option is a per se patentable subject matter rule. As we discussed earlier, with increased regulation of diagnostic tests, companies become more interested in protecting their investment that they have made in new technologies because of the additional financial outlays required to fund additional regulatory submissions and possible clinical trials.

Patents can be one form of protection for these companies. Under the patent system, companies in the United States may file a specification and claims (which must fall within the scope of patentable subject matter and meet patentability criteria of novelty, non-obviousness, enablement and written description) in exchange for twenty years of exclusive rights to the claimed technology.[118] The patent system protects the patent-holder from others who copy their invention by allowing the patent-holder to sue for damages or an injunction if another company’s product infringes their patent.[119]

Aside from patenting the genetic identity associated with the disease, companies may also be interested in patenting the algorithm that predicts the propensity for metastasis of tumors or the interaction of multiple genes. While the Hatch-Waxman framework helped counter he delay to market for drugs through patent-term extension, this solution is insufficient for genetic diagnostic tests, given the current uncertainty as to whether such tests fall within the scope of patentable subject matter. Therefore, to provide the same protection to diagnostic test companies as we do drug companies, we must create an equally effective exclusivity backstop. This may be accomplished by bringing all genetic diagnostic tests within the scope of patentable subject matter through the creation of a per se rule (making all genetic diagnostic tests “patent-eligible”), or through FDA-mediated data exclusivity, a feature also found within Hatch-Waxman.

This section explores two issues with respect to the creation of a per se rule: (1) does it fit within the current patentable subject matter jurisprudence and (2) is patentability really necessary for the financial success of genetic diagnostic tests, or will the lesser protection of data exclusivity be sufficient? As this section will show, data exclusivity is a superior option because of the possibility of patent over-enforcement stifling innovation in the diagnostic test arena.

A.  A per se rule does not fit within the patentable subject matter framework

The current era of controversy over patentable subject matter began in 1980 with the seminal Supreme Court case, Diamond v. Chakrabarty, where the inventor, Chakrabarty, filed a patent application claiming “a bacterium from the genus Pseudomonas”—not merely the process claims for producing the genetically modified bacterium, but the bacteria themselves.[120] The Court determined that this bacterium was not an unpatentable natural phenomenon, but rather a non-naturally occurring manufacture or composition of matter, and therefore held it was patentable.[121] A related case from many years earlier is Parke-Davis & Co. v. H.K. Mulford Co., where Judge Learned Hand reasoned in dicta that purified adrenaline was patentable subject matter because it was materially different from the naturally-occurring adrenaline found in the human body.[122]Parke-Davis provides some of the support for the modern patenting of genes, reasoning that such genes are patentable because they are the purified forms—the inventor has separated the gene from the rest of the chromosome and from the other cellular matter in the naturally occurring state.[123]

Four recent cases have brought into question the patentability of genetic diagnostic tests. This section discusses each case and determines that not only is the framework for patentable subject matter unpredictable and fact-specific for diagnostic tests, but also that a per se patentability rule would be unfeasible to implement without disrupting the patentability of unrelated industries.

The first such case is Laboratory Corporation v. Metabolite Laboratories,[124] where the patent at issue claimed a process that detected deficiency of two vitamins, folate and cobalamin, by measuring the level of homocysteine in the body fluid. If the homocysteine levels fell within a particular range, the patent suggested that there was a vitamin deficiency.[125] In his dissent from the Court’s unusual decision to dismiss the case for certiorari improvidently granted, Justice Breyer wrote that the patent office should not have permitted this patent as it “claim[ed] a monopoly over a basic scientific relationship,” yielding an interpretation that would cause doctors’ medical diagnoses to infringe the patent.[126] Although Justice Breyer’s view was not ultimately adopted by the Court, his remark suggests that the area of patentable subject matter was far from settled and created an opening for subsequent cases.[127]

The second major case relevant to our analysis of patentable subject matter is In re Bilski (later Bilski v. Kappos), which did not deal with diagnostic tests, but rather software patents.[128] The inventor, Bilski, claimed an algorithm for hedging.[129] The Federal Circuit disposed of Bilski’s patent by determining that an algorithm fell within the scope of patentable subject matter so long as it was implemented with a non-trivial machine or involved the transformation of matter, reaffirming the so-called “machine-or-transformation test”.[130] As Bilski’s method did not involve any such transformation of matter nor was it implemented in a non-trivial machine, the patent-in-suit was therefore held to be unpatentable.[131] Immediately, it was unclear how Bilski would apply to diagnostic tests and methods.

The Federal Circuit applied the “machine-or-transformation test” in a third major case, Prometheus Laboratories v. Mayo Collaborative Services.[132] Prometheus is the exclusive licensee of two patents that calibrate the dosage of thiopurine drugs.[133] Although doctors had used such drugs to treat autoimmune diseases for many years, their efficacy was limited by non-responsiveness and drug toxicity in some patients.[134] To address this complication, the patents claimed the following “method of treatment”: (1) administer a particular dosage of the drug; (2) determine the levels of the drug metabolites found in the body fluid; (3) depending on the levels of those metabolites, either increase or decrease the dosage of the drug subsequently administered.[135] In the original Federal Circuit decision in 2009, Judge Lourie applied the “machine-or-transformation test” and found the requisite transformation in the method of treatment.[136] This overruled the District Court judgment that the patent was invalid because the administration was a trivial “data-gathering step” (rather than fundamental to the invention) and the claims relied on a naturally-occurring correlation.[137]

Subsequently, when In re Bilski was appealed to the Supreme Court in Bilski v. Kappos, the Court found the “machine-or-transformation” test was too restrictive, and held that although the test could provide “a useful and important clue” as to the patentability of an invention, it was not the sole test for patentability.[138] In dicta, Justice Kennedy noted that the formalistic “machine-or-transformation test” may have the unfortunate side-effect of rendering “advanced diagnostic medical techniques” unpatentable.[139] Indeed, he was not alone in this fear: when a lower court invalidated Prometheus’ patent based on the Federal Circuit’s machine-or-transformation test, one response alleged that this decision would “threaten to invalidate the entire field of medical treatment and diagnostic patents on which the innovative and lifesaving biotech industry is built.”[140]

When the Federal Circuit revisited Prometheus Labs after Bilski v. Kappos, they upheld the court’s initial finding of validity.[141] The court recognized that Congress envisioned a permissive approach to patent eligibility to ensure that “ingenuity should receive a liberal encouragement.”[142] The Federal Circuit found that the decision turned on whether the claims covered a natural phenomenon, whose patenting would entirely preempt the use of that correlation, or whether it was only a particular application of that phenomenon.[143] The court held that it was the latter, and therefore within the scope of patentable subject matter.[144] Whether the Supreme Court upholds the Federal Circuit’s decision is another question.

The final major case I address is Association for Molecular Pathology v. United States Patent and Trademark Office, or “the Myriad Case.”[145] The patents enforced by Myriad Genetics claimed the particular nucleotide sequence associated with genes for breast cancer, in effect claiming isolated forms of the genes in the manner prefigured byParke-Davis.[146] These patents enabled Myriad to have a monopoly over nearly all diagnostic tests for breast cancer caused by the two major breast cancer genes, BRCA1 and BRCA2,[147] causing outrage in the scientific community, as well as amongst patients seeking testing for susceptibility to breast cancer. Because this case deals explicitly with genetic diagnostic tests, it best illustrates the state of affairs that arises in the absence of regulation.

Myriad offers a laboratory-developed test, and although the lab is accredited under the CLIA discussed supra, the FDA has never approved the actual test offered by Myriad.[148] Therefore, there is a greater chance that the test conducted by Myriad Genetics leads to incorrect results, and without a legally available second opinion, a patient is left without recourse.[149] In Judge Sweet’s opinion in the Myriad Case, he determined that genes were outside the scope of patentable subject matter and struck down the nucleotide sequence claims (and many other claims in the two patents).[150] The argument was that purified genes, despite whatever Judge Learned Hand may have said in Parke-Davis, are not “markedly different” from naturally-occurring genes, and thus the patent covered a product of nature rendering it invalid.[151]

After this decision was appealed to the Federal Circuit, the United States Department of Justice (the “DOJ”) filed an amicus brief that effectively straddled the positions of the two parties, the DOJ supported the decision to disallow purified gene patents but felt that complementary DNA patents should remain valid.[152] The distinction that the DOJ made is that since complementary DNA does not contain introns,[153] it is sufficiently different from naturally-occurring genomic DNA.[154] In contrast, isolated DNA is no different from cotton fibers isolated from the cotton plant; it may be necessary to isolate a substance to make use of it, but by itself does not yield an invention.[155]. The DOJ distinguished the purified adrenaline in Parke-Davis from the purified gene in Myriad by raising a crucial point: with genes it is the similarity to the naturally-occurring substance, rather than the differences from purification, that yield the benefits of the patent for diagnostic and medical purposes.[156] Subsequently, the Federal Circuit reversed Judge Sweet’s District Court decision in part, holding that Myriad’s composition claims to “isolated” DNA molecules were patent-eligible, but finding that those claims comparing DNA sequences were patent-ineligible, as they only involved mental steps.[157]

These inconsistent positions have created a great deal of uncertainty about which products would fall within the scope of patentable subject matter, which makes it difficult for companies to make ex ante investments in this technology. Indeed, the positions adopted by Judge Sweet in the Myriad Case and in the DOJ amicus brief might be seen as arbitrary. Both interpret the words of the Constitution, “to promote the progress of science and the useful arts” to exclude a type of invention that they do not feel would promote that progress without any clear scientific demarcation.[158] This analysis shows that there is no clear answer regarding whether genes should or should not be patentable, especially given that the patentability of genes and diagnostic tests is not clearly prohibited by the language of the patent statute.  If one conceptualizes the relationship between a segment of DNA and a disease as correlations, then they are no different from the correlations upheld by the Federal Circuit in Prometheus. If they are conceptualized as products of nature, the boundary shifts depending on how natural something must be to fall within that unpatentable class. Therefore, even where courts declare otherwise, the patentable subject matter question must be driven by policy: would it be beneficial for the progress of innovation to allow the patentability of these technologies?

Given the flux of the law on this matter, it would be difficult to create a per se rule declaring that all genetic diagnostic tests were patentable subject matter. Not only would Congress or the courts need to deal with the many scientists and academics who oppose such a position, the rule itself would throw into question the entire jurisprudence dealing with patentable subject matter, with effects on other technologies, as discussed by Justice Kennedy in Bilski.[159] Therefore, it would be unwise for the genetic diagnostic test industry to rely on predicting the direction of the Supreme Court in deciding whether their particular test would fall within the scope of patentable subject matter. Most importantly, even if Congress supported such a rule, it is not clear that blanket patent-eligibility would “promote the Progress of Science and the useful Arts,” as the Intellectual Property Clause of the Constitution requires,[160] as shown by the innovation-stifling actions taken by some patentholders in this arena, as I discuss next.

B.  In the absence of a per se rule, companies still need a baseline level of exclusivity

In the absence of a per se rule, is the solution to have extensive regulation of genetic diagnostic tests, but not patentability? It is crucial to remember that the Myriad Casetook place against a backdrop of no regulation, and even then, companies were concerned about their initial investment in the technology. This section discusses the possibility of data-exclusivity as a lower tier of protection that would enable diagnostic test companies to recoup investment in new tests even if courts find that such tests fall outside of the scope of patentable subject matter. Based on this discussion, I conclude that FDA-mediated data exclusivity for all tests that require clinical testing for approval is the best option.

Many articles have discussed blocking patent issues in gene patents.[161] Some have argued that patents are not necessary to incentivize the development of genetic diagnostic tests.[162] Gene patents’ claims cover nearly twenty percent of the human genome, and those interested in doing research on those claimed genes must overcome the hurdle of whatever costs the patent-holder has placed on her patent.[163] University researchers have also asserted that “[the prospect of] patents do not affect research in this area” as most research is done in a university setting, funded by government grants.[164] At the same time, private companies conduct a large amount of research building on university research in developing diagnostic tests,[165] which definitely does depend on patents.[166]

A recent study found that at least one patent in either Europe or the United States covered 19 of the 22 most prevalent hereditary diseases, and that many were covered by several patents.[167] In both the United States and Europe, universities are the top patent-holders,[168] and most genetic diagnostic patents originate in the United States,[169]which the study authors speculate stems from the liberal patent policy in this country.

In Heller and Eisenberg’s seminal article, the anti-commons is characterized as many cross-cutting patents that require new entrants into the field to license from each of these actors.[170] However, if patents can be circumvented or “designed-around,” no such licenses are necessary. Therefore, the current state of genetic diagnostic patents is not necessarily an anti-commons as imagined by Heller and Eisenberg: as the Huys study recognizes, although 25% of patents claim particular genes, only 3% of these patents cannot be circumvented.[171] However, 38% of these gene patents claimed diagnostic methods, which are generally more difficult to circumvent.[172] The Huys study made no substantive conclusions about the existence of any patent thicket, but noted that the uncertainty associated with the patentability of such tests created more difficulties for inventors in the development of technologies associated with gene patents.[173]

More recently, a series of extensive studies, led by Professor Cook-Deegan, focused on ten hereditary diseases and the effects of patents on their treatment and research.[174] Here, I focus firstly on breast cancer and associated cancers, and then on Alzheimer’s Disease tests, given their high rates of occurrence and significant impact on the population.

Breast cancer is a particularly lucrative disease for patent-holders like Myriad. For breast cancer, Myriad is the exclusive licensee and sole provider of tests based on BRCA1 and BRCA2 in the United States. For colorectal cancer, tests are available from multiple laboratories (including Myriad), but none have the same monopoly position as Myriad does in breast cancer testing.[175] Therefore, the comparison between breast cancer and colorectal cancer testing is a useful metric of the effects of diagnostic patents.

Even as a monopoly entity, Myriad often acts in the public interest. As of August 2008, Myriad has submitted over 18,000 entries for the 2,600 unique mutations to the Breast Cancer Information Core database (a publicly available central repository for information regarding mutations and polymorphisms in breast cancer susceptibility genes).[176] However, Myriad has also limited certain types of research by using a very broad definition of what constitutes infringing—when the Genetic Diagnostics Laboratory began testing patients using National Cancer Institute protocols, while additionally providing breast cancer results to patients, Myriad claimed that this constituted patent infringement.[177] Myriad does not enforce its patents against non-commercial research or against laboratories providing tests that it does not sell,[178] although its ambiguous policy may still create a chilling effect. In contrast, the studies found no similar chilling effect with the two tests offered for colorectal cancer.[179] In House Judiciary Committee hearings, some scientists argued that Myriad purposely did not adopt more cost-effective testing methods.[180] However, the sequencing methods used by Myriad for breast cancer tests are actually cheaper than those used by Myriad and other providers for similar colorectal cancer tests; if the technology has advanced, Myriad’s competitors have not adopted it either.[181] Still, even assuming that Myriad is using the most cost-effective testing methods, its tests remain prohibitively expensive compared to molecular marker tests, breast cancer gene sequencing as offered by Myriad costs $2400 per patient on average, compared with $99 for the 23andMe test that includes preliminary results for various breast cancer risk factors, including breast tissue density.

Similarly, Alzheimer’s Disease, which cost the U.S. healthcare system $61 billion in 2002, is a disease where patents can be very lucrative.[182] The majority of those with the disease have late-onset Alzheimer’s, which has only one clearly established risk factor known as APOE.[183] A small percentage of cases arise from early-onset Alzheimer’s, for which there are three dominant mutations found in one of three genes.[184] In the United States, genetic testing for Alzheimer’s is provided almost exclusively by Athena, who has licenses to three major Alzheimer’s gene patents,[185] and offers the test for $475. However, Graceful Earth, a direct-to-consumer testing company, produces a non-FDA approved test for Alzheimer’s for $280,[186] using indirect markers rather than the strong-effect markers used by Athena.[187]

In a well-regulated environment, consumers could expect near certainty in their risk results provided by Athena or Myriad, and a reasonable certainty from their marker tests from Graceful Earth or 23andMe. However, such regulation is costly for companies. In the absence of any data exclusivity or patent protection, it is likely that Athena or Myriad would need to provide extensive clinical data to the FDA in order to market their products, while Graceful Earth and 23andMe would have used that data free of charge and benefited from Athena or Myriad’s initial investment. Such copying by other actors might make inventors like Athena or Myriad reluctant to take on the initial burden under additional FDA regulation.

The crucial question becomes whether in the presence of additional regulation we need the complete protection offered by patents—20 years of exclusivity in exchange for the information disclosed to the public—or whether a lower-tier of exclusive protection such as clinical data exclusivity would suffice.[188] The answer seems to be that a lower tier of protection would be sufficient, even beneficial. Patents are often enforced indiscriminately against copyists and innovators alike, stifling new growth in this field. A lower tier of exclusive protection would enable new genetic diagnostic tests to be developed in a short period, but allow new innovators to protect their investment in the technology and in producing clinical data for the FDA. Furthermore, the disclosure provided by the patent system in this field is minimal compared to the information found in scientific publications, suggesting that the bargain struck by the patent system may not be fulfilled in the area of genetic diagnostic tests.[189] Furthermore, concerns about lower test quality from lack of competition could be allayed by stringent FDA regulation of these tests.[190]

Therefore, a per se patentable subject matter rule is not the solution for protecting the interests of consumers and genetic diagnostic test developers. Not only would it fit poorly within the current patentable subject matter framework, but it is also not the best promoter of innovation. At the same time, a baseline level of exclusivity for a shorter period is required to allay some of the uncertainty of diagnostic test developers, particularly given extensive regulation by the FDA. For these reasons, innovation policy would be better served by granting genetic diagnostic test developers data exclusivity rather than patent protection.

IV. SUGGESTIONS FOR A NEW REGULATORY REGIME FOR GENETIC DIAGNOSTIC TESTS

With the earlier discussions in mind, this section presents a comprehensive framework for the regulation of diagnostic tests.

In response to the regulatory problems discussed in Part II, some legislators have suggested the creation of an entirely new department within the FDA to address the unique needs of genetic diagnostic tests.[191] However, such drastic measures are unnecessary. Notably, I do not recommend that the FDA change current procedures for testing analytical validity (allowing the CMS to continue such regulation), nor should the FDA change significantly the current three-class system for medical devices before applying it to genetic diagnostic tests. Instead, I propose the following five simple changes to the regulatory system for genetic diagnostic tests at the FDA.

1. Increase requirements for labeling and genetic counseling that keep up with developing technology through monthly meetings

With a genetic diagnostic test, adverse consequences from an incorrect result can be significant, leading to mismanagement of the disease or unnecessary surgery.[192] In light of the known errors in the genetic test methods outlined earlier, I would add more to the FDA’s analysis. Firstly, there should be different oversight for those tests that rely on molecular markers and for those that rely on sequencing. The former should have clear labeling outlining how molecular markers may not predict your risk at all, particularly for patients of certain backgrounds. Molecular marker tests that frequently lead to disparate results when using different markers should be required to use multiple-effect markers for the same gene, or consistently use strong-effect markers.

Secondly, the FDA should mandate expansive labels outlining factors required in the interpretation of diagnostic tests. In a long-term study of effects from a representative genotyping test, researchers found no indications of test-related distress in 90.3% of participants.[193] However, the Bloss study’s authors acknowledged the unusual demographics of the study cohort: most of those who completed the study had some post-graduate education, and of the 44% of participants who failed to follow up after testing, most had completed a four-year college degree.[194] To address this artifact, the FDA should expand the labeling requirements in the test results for the presentation of certain disease alleles. Many companies that provide genotyping for multiple markers have associated websites and blogs that are continually updated with new information associated with the subject’s disease alleles. If the initial test results are provided on the website, this format is adequate. If they are communicated via mail, the FDA should mandate associated genetic risk information and context for the most severe disease alleles in this printed report.

Thirdly, certain tests should require consultations with a genetic counselor. Informally, the FDA has indicated that the availability of consultation with certain tests will be taken into account in the approval process, but no official guidelines have mentioned such treatment.[195] I recommend these consultations despite the Bloss study’s finding that only 10% of cohort participants elected free genetic counseling,[196] partly because 26% of cohort participants elected instead to show their test results to their physician. Because most physicians in the United States feel ill-equipped to deal with such genomics data,[197] these results suggest that genetic counselors should attempt to augment the role of the physician, which includes taking into account family histories and environmental factors—elements that can affect the expression of the gene in question and help reduce errors from penetrance and expressivity—when interpreting test results. Occasionally, the FDA can choose to allow a company to only offer the particular genetic diagnostic test to members of a particular population or racial cohort or require additional scientific studies for support from the manufacturer, as many genetic diagnostic tests have fidelity within certain populations.[198]  The FDA has a reasonably well-defined set of non-binding regulations governing the collection of race and ethnicity in clinical trials, and in these regulations it requires application sponsors to analyze whether dosage must be altered for certain sub-groups.[199] However, although the FDA is cognizant of these issues, it may be difficult to give proper weight to each issue when a test offers data for multiple traits, each prefaced on different studies.[200]

Finally, every month, a committee should convene in the FDA to determine future regulations and options for genetics-based diagnostic tests. This committee should have limited conflict-regulation options.[201] There should be options for regulations that deal with race and sex-based differences in the test data. Although the FDA has stated that it would be difficult to hold these meetings with regularity to address new developments in the field, it would be difficult to regulate this technology without them.[202] Until a decade ago, most genes were discovered using extensive family histories from cultures that kept good records and often had a history of inbreeding. With the advent of better sequencing technology, genome-wide association studies have become more widespread.[203] As a result, the information that is translated into diagnostic tests, particularly genetic diagnostic tests, is rapidly advancing. This means that a command-and-control approach will likely become obsolete every few years. This suggestion allows the FDA to move incrementally, detailing how the present medical device framework will apply to diagnostic tests, with frequent consultation from advisory groups. These groups can specifically examine the problems with genetic tests discussed earlier: expressivity, penetrance and, complex traits involving multiple genes. As genes become better-defined, these committees can ensure that tests do not rely on outdated data.

2. Provide data-exclusivity for Class II tests that require additional clinical studies.

The FDA has admitted that it does not take into account costs or the patent system in its analysis.[204] However, as discussed supra, biotechnology and pharmaceutical companies do take into account the protections that the patent system offers when deciding which products to pursue on a commercial scale.[205] Furthermore, the patentability of these diagnostic tests that the FDA seeks to regulate is not clear. While Judge Sweet and the subsequent amicus brief by the Department of Justice have made a reasonable argument to limit the patentability of the “purified form of a gene,” this position does not clarify the patentability status of other genetic products. Nor will such questions be resolved quickly. Indeed, the biggest lament of biotechnology companies has been that the status of these products is so uncertain that it makes it difficult to invest in these new technologies.

At the same time, numerous studies on the development of genetic diagnostic tests for breast cancer, colorectal cancer, and Alzheimer’s Disease have shown that much of the research that has led to these discoveries is not privately funded, but rather funded by the government.[206] In fact, it is not until the commercialization stage that private actors generally enter the picture. In the previously open regulatory climate, the comparatively small investment required for transferring a laboratory invention to a commercial product meant that patents on such technologies were not always beneficial, and occasionally harmful when enforced stringently. However, the regulatory situation has changed, which means that those interested in providing diagnostic tests must invest more to bring their tests to market. Given the comparatively smaller investment required for developing diagnostic tests compared to pharmaceutical drugs,[207] as well as the smaller scope of clinical trials that must be completed, there is an appropriate role for the FDA to provide a baseline level of data exclusivity, expanding the current Safe Medical Devices Act regime and exclusivity regimes under the Orphan Drug Act or the Pediatric Exclusivity Act.[208]In the latter models, companies receive data exclusivity from the FDA when they voluntarily undertake clinical studies suggested by the FDA to allow the use of their current drugs on children or to treat rare diseases. The Pediatric Exclusivity Act provides six months exclusivity for all uses of the drug, not just pediatric uses, while the Orphan Drug Act provides an extraordinary seven years of exclusivity.[209] Here, a three-year exclusivity term for Class II diagnostics can incentivize companies and even university groups to go the extra step of preparing data for regulation without worrying about rival groups using their test data for their own approval, creation of a performance standard or the classification of their device.

3. Create mandatory maximum times for Class II and Class III approval processes or increase the scope of Class II devices to decrease overall approval times.

Suggested guidelines for Class II and III approval processes include: (a) no 510(k) clearance for an in vitro diagnostic should take longer than 6 months from start to finish and (b) no PMA for an in vitro diagnostic should take longer than 12 months from start to finish. It is crucial that in providing an additional safety factor, these additional regulations do not also institute a new obstacle. The Center for Devices and Radiological Health has a two-fold mission: to protect public health while promoting public health through new medical technologies.[210] This second mission cannot be fulfilled through an inefficient approval process.

In implementing these new time-frame limitations, the FDA must also implement a more transparent monitoring system to track how long the approval process really takes. The FDA has often argued that this additional time provides additional safety for consumers. Firstly, from studies discussed supra, it is evident that although some additional time can be useful, the extreme amounts of time that the FDA has taken have not translated into commensurate benefits for consumers.[211] Furthermore, it is not clear that the safety gains from such delays outweigh the adverse effects on patients from delays in approving life-saving drugs.[212] The timelines suggested here are based on the average review times for equivalent products in the European Union and the review times that the FDA itself espouses in the FDA white paper discussed earlier.

However, it may be insufficient to require shorter review times. As an FDA white paper previously addressed after the passage of the Prescription Drug User Fee Act, the review times suggested have been contemplated by the agency.[213] Therefore, I also suggest that in order to classify genetic diagnostic tests into Class III, the burden be placed on the FDA to show why prior adverse actions by individuals have necessitated this stringent classification, creating Class II and the 510(k) clearance process as a default position for most genetic diagnostic tests.

4. Solicit complaints directly from consumers

The complaint procedures for faulty tests must be streamlined because under the proposed scheme consumers with direct access to genetic diagnostic tests will use the software rather than just healthcare providers. All companies with web-presences—even if they do not have a software or computational test—must clearly link patients to a complaint page provided by the FDA, currently available through the MedWatch system.[214] Indeed, experts estimate that the current voluntary reporting system by physiciansvastly reduces the number of complaints reported to the agency, or only about ten percent of all adverse events,.[215] Consumers may submit such complaints for slow-turnaround in tests, a frequent complaint made about small-testing operations, in addition to incorrect test results and misleading language.  Turnaround time can be important: for example, PGxHealth, a commercial provider of genetic tests, returns results within two months, compared to one year for research-based providers of the same genetic tests.[216]Many companies have offered direct-to-consumer genetic testing earlier in the treatment cycle than other diagnostic tests, treating them as a “first-pass-through” before submitting a patient to extensive medical treatment or physician analysis.[217] If genetic diagnostic test results are not available quickly, this role as a preliminary diagnostic measure is lost.

5. Require minimal regulation of purely software-based genetic diagnostic tests

Despite some jurisdictional issues, it is clear that software-based tests are “systems intended for use in the diagnosis of disease or other conditions” within the meaning of the Medical Device Amendments of 1976, even though they do not directly involve the withdrawal of samples from a patient. As whole-genome sequencing becomes an increasingly viable option for consumers,[218] such software-based tests will become more common. Armed with a copy of their full-sequence, users can run their data through frequently updated software that takes into account more recent meta-analyses and scientific studies. Indeed, such software is similar to the PrometheASE program already used by many in analyzing the raw data provided by 23andMe and Navigenics.[219] If the FDA could only regulate the companies who actually take samples from their clients to create the whole-genome sequences, they would not be regulating clinical validity at all, but the analytical validity of high-throughput sequencing machines, a mostly useless task.

Furthermore, it would be unusual to require clinical trials from entities that may consist exclusively of programmers. If the programmers have properly designed the software from existing data in published papers, the FDA should easily complete the verification of such data. This situation may require the FDA to alter the types of individuals who work in their testing division and require a more ad hoc approach to such tests, such as including more individuals familiar with computer programming or statistical techniques and involving the creation of trials that depend on paper data, or data that is not from clinical trials of the particular genetic test, but previously published research on the particular genetic correlation. If the test cannot be verified based on published data, then the programmer cannot make them available to consumers. If the programmer wishes to take on the burden of clinical testing to have the option of offering it to consumers, this option should be left open. Additionally, with software-based tests and other tests that are updated frequently, the FDA should implement a simple online submission system for previously verified tests. This will function differently from pre-market or post-market options, and act as more of a constant monitoring system: the entity seeking approval should submit the change to the test along with the study that supports the change, allowing minimal FDA oversight to verify test changes.

V. APPLICATION OF PROPOSED REGULATORY REGIME TO A CHALLENGE FOR THE FDA

This section analyzes the application of this regulation to a test that flouts the conventions for both patents and FDA regulation, what Nature describes as “The Renegade Gene Test.” This test—also known as the Salzberg test is a computer program that can check any genome for 68 gene mutations that increase the risk of breast cancer and other cancers.[220] Although there are over 1000 gene mutations allegedly linked with the occurrence of breast cancer, the programmers believe that their program can be easily expanded to include the effects of those mutations when the time comes. Their software is freely available under an open source license that allows others to use, modify, and redistribute the program.

A.  Regulation of analytical validity and classification of the tests

Under the suggested regime, neither the Myriad test nor the Salzberg test would require any testing for analytical validity. Since the Salzberg test is an open source framework, this might create problems, but would likely be resolved through the current user generated content model that has been successful with Linux and Wikipedia.

Since breast cancer is a serious disease, both the Myriad test and the Salzberg test could fall under either Class II or Class III. Because women may undergo preemptive mastectomies and other serious treatment after taking the Myriad test, but might not pursue the same options under the Salzberg test, Salzberg might argue for a lower level of regulation. As a result, Myriad could be regulated as a Class III device, while Salzberg could be regulated as a Class I or II device. Regardless, the Myriad test would likely be approved with little difficulty within the time frames suggested supra, although the FDA might require warnings addressing the utility of a negative result on the test, as many breast cancer patients do not necessarily have mutations in either BRCA1 or BRCA2, two genes associated with the onset of breast cancer.

Salzberg would first argue that computational tests fall outside of FDA’s regulatory jurisdiction. This argument would likely be unsuccessful because computational tests clearly fall within the language of the Medical Device Amendments of 1976.[221] The approval of the Salzberg test would also be somewhat difficult. Because it only looks at 68 gene mutations when 1000 are possible, the test does not “represent a comprehensive list of BRCA mutations.”[222] Since the clinical studies published on breast cancer do not rely on such a small subset of gene mutations, the FDA could not rely on the computational test providing the same accuracy as if it had 1000 mutations.

At this juncture, this Note has recommended that the FDA refrain from requiring full clinical trials from computational test providers. Instead, the FDA may require that Salzberg either cite an earlier study that demonstrates that 68 mutations can predict the disease with the same accuracy as 1000 mutations, or at least show the level of accuracy provided using these 68 mutations (or molecular markers, as the case may be). It is likely that Salzberg would need to refine the test to include all 1000 mutations because of the considerable expense involved in conducting their own clinical trials. Even if Salzberg and Pertea provided a test that did use all 1000 mutations, the FDA would likely require them to place certain warnings on their website detailing the possible errors from inputting in the raw genome data on one’s own, as well as a link to the FDA complaint page suggestedsupra.

B.  Possible patent protection and data exclusivity

At minimum, the Salzberg test would infringe upon a number of already existing gene patents. However, because individuals would have to input their own genetic data to perform the actual test covered by the patents, Myriad could only sue the programmers Salzberg and Pertea for inducing infringement, rather than direct infringement.[223] Let us suppose that the Supreme Court strikes down the Federal Circuit’s Myriad decision and that the only option is for data-exclusivity under the plan outlined in Part IV. Given the clear correlations available between the BRCA1/BRCA2 genes and breast cancer, it is unlikely that Myriad would have needed additional clinical trials for approval at the FDA. Since it does not need to submit new data and can rely on published data, there is no option for data exclusivity at the FDA and Myriad would receive no protection from those who wish to replicate its test. This is likely a good thing, given that the earlier studies (discussed supra in Part III) show that more options for breast cancer tests would be available at cheaper options if the Myriad patents were not enforced as stringently. However, it could also cause future companies like Myriad to avoid publishing its results when a new gene is discovered, particularly as the patent system is no longer an option and thus there is no mechanism forcing disclosure. However, this threat is largely illusory, as the identity of the gene can be derived from the publicly available test. Therefore, the proposed regulatory scheme in this paper the proper incentives for both innovators and consumers.

CONCLUSION

This paper could not possibly cover all of the issues arising from the regulation of diagnostic tests or the questions of their patentability. The proposed regulation aims to minimize the effects of three common errors in genetic diagnostic tests affecting consumers by increasing labeling and genetic counseling requirements and adopting new testing protocols, while reducing ex ante uncertainty for genetic diagnostic test companies by clarifying classification regimes and approval times and providing for a data exclusivity back-stop of three years if the test is found to be outside the scope of patentable subject matter. The regulation also aims to improve FDA administration by enhancing adverse effect reporting and maintaining monthly meetings to address the rapid improvements in the field.