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The company ASML Holding N.V. is, quote Wikipedia: "the sole supplier of extreme ultraviolet lithography (EUV) photolithography machines in the world"

This means that ASML has a monopolistic position in the global semiconductor / computer chips supply chain.

If Intel wants to step up manufacturing of computer chips, in response to the global chips shortage, it must buy equipment from ASML. There is no other way.

However, ASML's EUV manufacturing capacity is already at a maximum.

If Intel were to request ASML to allow Intel to manufacture more of those EUV machines at Intel's manufacturing facilities, assuming no technical barriers, does ASML have an obligation to agree?

In general, if a patent holder holds the patent to a world-impacting monopolistic technology, does the patent holder have an obligation to ensure that such technology and the products of such technology is always able to meet market demand?

Furthermore, is there any limit on the profit margins that a patent holder is allowed to make?

Assuming that Pfizer is the only company that has the patent to the manufacturing of a COVID-19 vaccine of reasonable effectiveness. Pfizer's accounts department, after running the numbers through their computers, come to the conclusion that in order to maximize profits, they should limit the supply of the vaccines and sell the vaccines at a cost of 1 million US dollars per dose. What would be the consequences of such a move? Assuming everything is done by the book. No mass riots, no assassinations, no extra-legal sanctions.

defykade
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    EUV is the best one to make chips in the 7nm process. But there are a lot of sectors where chips in such process are not necessary. There are still on the market lot chips made in 14nm, 22nm and even thicker. Especially in the Automotive sector 7nm are not necessary. So ASML technology is not a monopoly. – FluidCode Mar 26 '22 at 12:42
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    The case of Pfizer vaccine is an extreme case of conflict between etics and the way the economy works in today world. I would not apply flatly such extreme case to all the others. – FluidCode Mar 26 '22 at 12:49
  • If you let your technologies to be included in a standard then there is an obligation to make i available, but only in that case. https://en.wikipedia.org/wiki/Reasonable_and_non-discriminatory_licensing – FluidCode Mar 26 '22 at 12:52
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    @FluidCode I was wondering why "Reasonable and non-discriminatory licensing" is not legislated into patent law so as to be part of the terms and conditions of granting a patent in the first place? Between the Intel and Pfizer examples, there is a huge grey area. In fact, the global chip shortage is on the way to becoming a humantarian issue. So is the patenting of seeds by Bayer and Monsanto and its impact on the global commodities shortage. – defykade Mar 26 '22 at 18:12
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    "In fact, the global chip shortage is on the way to becoming a humantarian issue." This is absurd. – FluidCode Mar 26 '22 at 19:01
  • ASML and most high tech manufacturers have now how and trade secrets and skilled engineer’s and scientists in staff besides holding patents. Patents disclose the invention but are not detailed production blueprints. – George White Mar 27 '22 at 04:39
  • @FluidCode: Actually, not every standards organization requires that IP be made available under RAND terms. Some don't have any requirements at all (which may make the standards they produce useless, but there is no law against producing useless things), some have stricter requirements, and there are many different interpretations of "reasonable" and "non-discriminatory". For example, many RAND terms make it impossible to use in Free Software, but that is not prima facie considered unreasonable and discriminatory. – Jörg W Mittag Mar 27 '22 at 09:42

2 Answers2

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In the US, a patent holder has no obligation at all to use their patent. They can charge as much for their patented product as they want, and if there are no alternatives then they're in a pretty good market position. If Intel wants to make more microchips and ASML won't sell them the tools they need, Intel just has to offer more money. It's a monopoly, but that's the whole reason patents exist: giving inventors a monopoly on their inventions in exchange for publishing how they work. There is such a thing as using a patent anticompetitively, but it takes a lot more than charging a high price.

Your Pfizer example runs up against one of the limits of patents, though. Patents are a government-supported monopoly, and they're only useful as long as the government keeps supporting them. A government has the sovereign power to say "we're not going to enforce this patent." If the company has facilities in that country, the government even has the power to say "you must manufacture more of this product."

This is rare. Most countries are subject to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), which says they will provide a patent system that's also available to foreigners. But TRIPS allows countries to authorize the unlicensed use of patents to supply their domestic market under appropriate circumstances. The patent owner still has to be paid a fair amount, but the patent isn't ironclad. Countries can also issue compulsory patent licenses to produce drugs for export to other countries, again under appropriate circumstances. You could also have an ad hoc agreement between WTO members to make new TRIPS rules for something. This last option was actually discussed to waive COVID-19 vaccine protection worldwide, although it didn't end up happening. If Pfizer was charging $1,000,000 per dose, it probably would have happened.

As was said in the comments, the Pfizer example was extreme. If Intel can't expand chip production because of ASML's patent, that's basically a commercial problem and should be solved by paying ASML more money. If people can't get COVID vaccines because Pfizer charges too much, that's a humanitarian problem and can be solved through government intervention.

cpast
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    I was wondering why "Reasonable and non-discriminatory licensing" is not legislated into patent law so as to be part of the terms and conditions of granting a patent in the first place?

    Between the Intel and Pfizer examples, there is a huge grey area.

    In fact, the global chip shortage is on the way to becoming a humantarian issue. So is the patenting of seeds by Bayer and Monsanto and its impact on the global commodities shortage.

     – defykade Mar 26 '22 at 18:07
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    @defykade Legislatures could include such provisions in patent law. They have chosen not to. Why they have so chosen and whether they are likely to change this decision is a political question, and would be on-topic at Politics.SE, but is off-topic here on Law.SE – David Siegel Mar 26 '22 at 18:16
  • I think there are constraints on some of the rules you generally outline here: Think Pharma Bro. – kisspuska Mar 26 '22 at 19:32
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    @defykade - the point of patents is to encourage invention. Inventions are encouraged by giving a temporary monopoly. Requirements to license as you suggest would reduce the incentive to invent. If there is not enough profit potential to develop humanitarian products they will not be developed and no one will get any benefit. – George White Mar 26 '22 at 20:39
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    @kisspuska IIRC, Pharma Bro was ultimately jailed on charges completely unrelated to jacking up drug prices. It’s more an example of “if you’ve committed a crime and haven’t been caught, don’t make yourself the most hated person in the entire country.” (Also, IIRC those drugs were already generics, there was just only one company that actually produced them.) – cpast Mar 27 '22 at 00:02
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    Defykade: chip shortages have nothing to do with patent licensing. A big factor was the car industry trying to save some money and not understanding how chips are produced. And not understanding that they are a small buyer. – gnasher729 Mar 27 '22 at 09:21
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    “A government has the sovereign power to say ‘we're not going to enforce this patent.’” Huh? I thought patents were enforced by their owners through the courts (judicial branch of government). If the legislative branch wants to change that, maybe they can, but that would be different to saying “we're not going to enforce this patent”. – Brian Drake Mar 27 '22 at 13:00
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    Governments do not enforce patents. Full stop. – MTA Mar 27 '22 at 16:49
  • @gnasher729 Exactly. Actually many factors. And that goes for supply chain issues in general. If stuff (chips, food, clothes, whatever) is stuck on a container ship because there aren't enough trucks or truck drivers to unload/deliver the containers, ordering more stuff isn't going to help. Just-in-time production is great - when supply chains run smoothly. – manassehkatz-Moving 2 Codidact Mar 27 '22 at 17:59
  • @MTA Patents are generally enforced by the courts, which are a branch of the government. Any time you bring a lawsuit, you are trying to have the government take action against the defendant. The government has rules about when it will or will not take action, and can decide "enforcing this patent is against our public policy and so we will not enforce it." That might take the form of specific legislation saying "patent 12345 shall not be valid," or general laws saying "the Secretary of Administrative Affairs may authorize unlicensed use of patents in the interests of public policy," etc. – cpast Mar 28 '22 at 01:21
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    Certainly governments may invalidate or seize patents in the interest of national security, health emergency, etc., but the enforcement of patents is solely the responsibility of the patent holder, not the government. It is a civil matter where the court -- the government -- simply acts as the referee. Suppose the patent holder wins the case. Does the government seize the defendant's assets and award them to the patent holder? Certainly not. It's up to the winner to collect, again supported by the courts as referee. – MTA Mar 28 '22 at 12:03
  • @MTA If the winner just goes and collects the defendant’s assets, that’s criminal theft. Only the government can issue an order for the defendant (or a third party like a bank) to hand them over. Only a government officer can physically seize the assets (with some narrow exceptions for secured loans where the defendant doesn’t resist the seizure). The government will do this at the plaintiff’s request, but it’s not happening on the plaintiff’s authority. A civil judgment is issued by the court exercising the sovereign authority of the state, not by a private plaintiff. – cpast Mar 28 '22 at 13:45
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    Exactly right. "At the plaintiff's request" and not at the government's own initiative. It is only by the patent holder's own initiative that patent rights are defended. Until and unless the patent holder defends its rights, government is an idle bystander and has no interest in the matter. – MTA Mar 28 '22 at 14:08
  • @MTA Cool, but I don’t see what that has to do with anything. The patent is enforced by the government, specifically by the courts. I never said anything about who took the initiative, just that patents are ultimately enforced by the government. Was your only point “patent holder take the initiative?” Because that doesn’t really matter here, where we’re talking about the patents not being enforced when the patent owner wants them enforced. – cpast Mar 28 '22 at 23:33
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    I simply objected to your scenario where a government says "we're not going to enforce this patent." This could never happen because governments do not enforce patents. I think I've adequately made my point that patent holders, by taking action by their own initiative against patent violators, are the parties that enforce patents. Without the patent holder's initiative, there is no enforcement. Enforcement takes place in the government's courts under the government's rules but by the patent holder. You're free to call that government enforcement if you wish, but that's an odd definition. – MTA Mar 29 '22 at 02:51
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No, of course not. That's so clearly the point, I suggest the Question belongs not in SE Law, but some forum dealing with ethics, morality or philosophy.

Either way, patents exist to help their holders exploit whatever it is, without sharing.

Any obligation "to make their patents available…" would negate that principle, to its own extent. How is that not obvious?

Robbie Goodwin
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    "patents exist to help their holders exploit whatever it is, without sharing." That is not quite correct.In return for a legal monopoly during the term of the patent, holders must disclose the details so that others can build on them at once, and so that all can use the patent freely once it has expired. That is a form of sharing, although not the form the OP asked about. Also, in some cases laws have imposed compulsory licenses on certain kinds of patents. That was considered in the case of the COVID vaccine patents. – David Siegel Mar 27 '22 at 18:45
  • @David If that's wholly true, isn't it still largely irrelevant?

    If you're saying "make their patents available" might be unclear, I wholly agree…

     – Robbie Goodwin Mar 27 '22 at 18:58
  • It is largely irrelevant to the specific question the OP asked, (which is why I didn't downvote) but IMO the general principle is important. Patent holders must share their discoveries in significant ways, but not in the way the OP asked about, except when a specific law imposes compulsory licenses. Note that an inventor can avoid such sharing by keeping a discovery as a trade secret (which would not expire) instead of taking out a patent. Disclosure in return for limited monopoly is the patent bargain. – David Siegel Mar 27 '22 at 19:06
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    @DavidSiegel "Largely irrelevant" being the operative term, no?

    Can you accept that first, "patents exist to help their holders exploit whatever it is…" and in and of itself, that cover the whole are for most people?

    That patent holders are protected from the worst excesses of sharing their knowledge does not give them any duty to share.

    If you think patent holders do have a duty share anything, why not cite an authority and jurisdiction?

     – Robbie Goodwin Mar 27 '22 at 19:19
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    No I do not agree that "patents exist to help their holders". The US constitutional justification for having patents at all is "to promote the progress of science and the useful arts." Patent owners have no duty to allow others to license their patents, free or at all. Patent owners do have a duty to share by disclosing their discoveries so that others can make use of the ideas without infringing the patent, and so that they can later be used freely. That inducement to disclosure is the primary purpose of patents. Only if by "share" you mean solely "grant licenses" is your statement correct. – David Siegel Mar 27 '22 at 19:29
  • @DavidSiegel Sorry. That's errant nonsense. What is there about patents in the US Constitution?

    Do you truly not see that patents could usefully "promote the progress of science and the useful arts" only by giving innovators incentives, such as exclusive rights, not duties?

    If you patent holders have a duty to share anything, where is that written?

    What d'you think "others can make use of the ideas without infringing the patent" means? "Later" being clearly beside the point.

    "share" includes, but doesn't at all mean "grant licenses"

    Would you rather drop this, or go to Chat?

     – Robbie Goodwin Mar 27 '22 at 19:53
  • Art I, Sect 8, Clause 8, of the US Constitution grants Congress the power "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." See https://www.upcounsel.com/patent-disclosure on the duty to disclose the substance of an invention. Of course the monopoly is an incentive to invest effort & cash in making discoveries. But disclosure also benefits science in general. There is more to say here than can be squeezed into a comment, perhaps this should be a separate question – David Siegel Mar 27 '22 at 20:03
  • Oh I do not, ever, use the chat interface here for any purpose whatsoever. I find it uncomfortable and awkward.. If comments are moved to chat I consider them to have been deleted. – David Siegel Mar 27 '22 at 20:06
  • Would you rather wrap all your Comments into a useful Answer, or break your habit and go to Chat, or just stop using Comments for discussion? – Robbie Goodwin Mar 27 '22 at 20:09
  • I think much of this is out of scope for an answer to this question. i will ask a new question and link it here. And probably self-answer, using some of these comments. – David Siegel Mar 27 '22 at 20:14
  • See https://law.stackexchange.com/questions/78904/to-ewhat-extent-adn-by-what-legal-authority-do-patent-holders-have-a-duty-to-s/78905#78905 – David Siegel Mar 27 '22 at 22:07
  • I always thought the purpose of patents was to incentivise invention. Nothing more, nothing less. We can argue forever about whether monopolies are the best way to achieve this, but either way, creating monopolies is not the purpose of patents. Between this and the condescending tone of this post, I am inclined to downvote it. Am I missing something? – Brian Drake Mar 29 '22 at 08:09
  • @BrianDrake Yes, you're missing most of it.

    Why not go to David Siegel's later Question, https://law.stackexchange.com/questions/78904/to-what-extent-and-by-what-legal-authority-do-patent-holders-have-a-duty-to-sh

     – Robbie Goodwin Apr 03 '22 at 18:53
  • @RobbieGoodwin -1 I see nothing there that invalidates my comment. Furthermore: (1) Copyright also exists to incentivise creation, though of different things to patents, and is not exclusive: we have fair use (in some jurisdictions, fair dealing). (2) This question is essentially about the use of patents to dominate markets, and there are laws about dominating markets more generally. (3) It is entirely reasonable, at least for a non-lawyer, to think that similar laws would apply to patents themselves. Your post is unnecessarily condescending. – Brian Drake Apr 05 '22 at 03:53
  • @BrianDrake Sorry, and I still see much of this as sadly mistaken. In this context, copyright and trademarks are essentially similar; more so if both stem from the US Constitution. On that platform, "sharing" is not a goal to be desired; merely a mechanism necessary for clarity. At the other end of the scale many jurisdictions do attempt to restrict monopolies. I thought David was both elevating the whole thing out of a morass and re-setting the counter before we got shut down for discussion in Comment – Robbie Goodwin Apr 06 '22 at 00:38