MAINTAINING INCENTIVES FOR BIOPROSPECTING: THE OCCASIONAL NEED FOR A RIGHT TO LIE

By Robert Heidt 1

ABSTRACT

Building on a model by Anthony Kronman, the author argues that biotechnological researchers searching for valuable cells should occasionally be allowed to deceive research subjects whose cells prove valuable. The wish to preserve proper incentives for these searches justifies this exception to the law's usual abhorrence of deception. The subject's ability to "hold up" the researcher once the subject learns of his cells' value combined with the law's likely refusal to force an unwilling subject to continue his cooperation with the researcher poses risks for biotechnologists that other producers of information do not face and that the right to deceive helps to alleviate. The author explains the variables that limit the proposed right to deceive, examines arguments against the proposed rule, and describes the current law.

Bioprospecting, the search for valuable cells, also presents three related issues on which the author comments. One issue is whether the subject's assignment of all his rights in his cell samples to the researcher should be enforced ex post when the cells prove valuable. A second issue is whether, in the absence of a clear assignment of rights to the cell samples, the subject or patient should possess a claim against the researcher to a share of revenues derived from those cell samples. A third issue is whether a patient whose samples are used for research or commercial purposes without his express consent should possess some dignitary claim against the researcher regardless of whether the samples have proven valuable. On each issue, the author supports an approach that favors the biotechnological researcher.

TABLE OF CONTENTS

I. INTRODUCTION 668

II. THE HOLD-UP PROBLEMS 671

III. INTRACTABILITY OF THE HOLD-UP PROBLEMS 678

IV. THE ABSENCE OF CONTRACTUAL SOLUTIONS 682

V. LIMITING THE PROPOSED RIGHT TO LIE 690

VI. ARGUMENTS AGAINST THE PROPOSED RIGHT TO LIE 697

VII. THE CURRENT LAW 701

VIII. RELATED ISSUES 706

A. Nullifying the Consent Agreement on Behalf of the Subject when the Cells Prove Valuable. *

B. Sharing Revenues in the Absence of an Agreement *

C. Whether Researchers Should be Required to Obtain a Patient's Consent to Research and Commercial Use *

IX. CONCLUSION 719

 

I. Introduction

Consider this story:

A biotechnology2 company (researcher) searches for individuals with rare cells that will assist it3 in developing valuable drugs. The search is risky and costly for the researcher. It must collect (typically through drawing a sample of blood) and examine the cells of a great number of research subjects before discovering cells of value. In addition, the researcher must train its employees where to search, send them to remote areas to collect samples, compensate the subjects, and test the samples.

Before collecting a subject's cells, the researcher routinely informs the subject of the risks of the collection procedure and obtains the subject's consent to use the cells for research and commercial purposes.4 Although the subject's motivation is largely altruistic, and the arrangement largely donative, the researcher compensates the subject modestly. For example, the researcher pays the subject's expenses of allowing the collection or performs medical tests of therapeutic value.

After much searching, the researcher finds valuable cells in a subject from an Indian tribe who lives in a remote corner of Alaska.5 The cell line developed from these cells helps the researcher develop a drug that assists in the treatment of one type of cancer.6 The value of this successful search to society should be apparent-the few cells needed for the research are infinitely more valuable in the researcher's hands than in the subject's.7 The discovery of the cells' value effectively increases the world's wealth.

If the researcher successfully maintains an immortal cell line, it would not need any further contact with the subject. It would proceed apace with its use of the cell line without identifying or involving the subject in any way. In particular, it would refrain from alerting the subject that his cells are valuable. Barring accident, the subject would never learn that his cells proved valuable.

Unfortunately for the researcher, it is not able to maintain the cell line it has created, and therefore it needs to return to the subject for a further collection.8 However, when requested to participate on the same terms as before, the subject immediately asks whether the researcher has any reason to believe that his cells are valuable.

How should the law allow the returning researcher to respond? Must it tell the subject the truth-that his cells are valuable? Should the researcher be allowed to lie-by saying there is no more reason to believe the subject's cells are valuable than there was at the time of the first collection?

This article argues for the researcher's right to lie in this situation. Of the reasons supporting the right to lie, the most powerful stem from the subject's ability to hold up the researcher once he suspects his cells are valuable and from the resulting destruction of the researcher's incentive to search.

Not surprisingly, the law, both common and statutory, virtually never tolerates lying. To induce another to promise or to perform based on a deliberate lie about a material matter is to commit fraud.9 Agreements based on fraud are void,10 and the fraud may trigger liability in tort,11 as well as in contract.12 Considerations from moral to economic call for this hostility to lying, a hostility that appears in many contexts and powers an elaborate variety of legal rules.13 Without challenging any of these rules, and without suggesting that the researcher should refrain from seeking alternative arrangements that would avoid the need to lie, this article contends that in carefully limited situations, of which the returning researcher's is one, the law's usual hostility toward lying is inefficient and misplaced.

II. The Hold-up problems

The subject's direct question about whether the researcher has reason to believe his cells are valuable puts the researcher in a dilemma that impacts the biotechnology industry and all future beneficiaries of this research.14 If the law requires an answer that leads the subject to suspect the truth, the subject, however altruistic, will be tempted to act against the researcher's interests. Conceivably, the subject could arrange to have himself tested,15 and having learned the value of his cells, could approach rival biotechnology companies, satisfy them as to the value of his cells, and allow collection of his cells only by the highest bidder. In effect, the subject can hold up the researcher by demanding, "Pay me the full value of my cells or I won't allow you another collection." In this scenario, the subject pockets all rents from the scarcity of his cells, the highest bidding researcher earns the normal competitive profit on the development of the end products, and the researcher that discovered the valuable cells is cut out completely. Its risky and costly search goes wholly unrewarded.16

The subject's suspicion of his cells' value allows a second holdup as well. Even after the subject provides the returning researcher with a further collection (indeed even when no further collection is necessary), the suspicious source can demand, "Pay me or I will alert your rivals to the value of my cells and deal with them."17

The possibility of these holdups presents added risks to a researcher contemplating whether to undertake a search. By undermining the incentive to search, the subject's suspicion drives a wedge between the private and social costs of searching.18 The amount of private investment in searching diverges more widely from its social product. At considerable loss to society, the amount of searching falls below the optimum.

The hold-up problem can be stated in various ways. One can state the issue as whether to recognize in the researcher a property right in the information it has discovered, namely, that valuable cells exist in this individual. So viewed, the holdup presents the information externality problem that is part of the standard argument for both patents and property rights.19

Alternatively, one can say the hold-up problem arises because the information produced by the researcher-that these valuable cells exist in this individual-is not self-appropriating. Just as a firm that has prepared a competitive bid can lose the value of its preparatory effort if the bid is communicated to a rival who bids one dollar less, the researcher can lose the value of its search once the subject suspects the truth.

One can also state the problem by characterizing the subject whose suspicions are aroused as a free rider on the search efforts of the researcher. The subject's participation in the search was compensated adequately, in the subject's own eyes, by the nominal compensation he received. In contrast, the researcher relies for its compensation on the return from finding valuable cells. By asking his question, the subject can, in effect, exploit the law's condemnation of lying to appropriate that return for himself.20 Asking, in combination with the law's condemnation of lying, becomes the mechanism for this appropriation. Yet asking, although potentially ruinous to the researcher,21 is virtually cost-free to the subject. While the windfall to the subject is not a concern, the harm to society from the suppression of the researcher's search is.

However stated, the problem is familiar. Kronman's famous article pointed out that the law could incent22 the production of socially valuable information by allowing the producer of the information to trade on it without disclosing it to the other trading parties.23 When producing socially valuable information is costly, society's wish to incent its production may trump society's usual wish to avoid mistakes by the contracting parties. The wish to avoid mistakes calls for compelling disclosure from the party who can avoid the mistake most cheaply. Invariably, the cheaper mistake-avoider is the party-here the researcher-which already possesses information about which it knows the other party is mistaken-here the true value of the subject's cells-and which can avoid the other party's mistake merely by disclosure. Tolerating nondisclosure by the cheaper mistake-avoider thus becomes the law's mechanism for establishing its property right in the information it produced.

The wish to incent the production of information explains those relatively rare occasions where contracts are enforced despite one party's deliberate failure to disclose material information about which it knows the other party is mistaken. Kronman's prime example was Laidlaw v. Organ.24 There a buyer learned that the British blockade of New Orleans would soon be lifted, and thus that the price of tobacco would soon rise. Using this knowledge, the buyer bought tobacco at the relatively cheap price prevailing before this news became widespread.25 When the seller refused to deliver at that low price, the buyer sued and prevailed.26 A still more familiar example where courts do not require disclosure is suggested by Leitch Gold Mines, Ltd. v. Texas Gulf Sulfur.27 There a company searching for underground deposits of oil (oilman) discovers oil under the field of a farmer with whom it has never dealt. Naturally, the oilman seeks to buy the right to extract the oil without the farmer suspecting the value of those rights. By consensus, at least among legal scholars,28 the oilman need not disclose to the farmer the information it has discovered. That is, the law will enforce the contract by which the uninformed farmer transfers the rights to extract to the oilman. Upon discovering his mistake, the farmer might attempt to void the contract on the ground that the oilman did not disclose material information of which it knew the farmer was ignorant, but his attempt will fail.29 Nor will the law void the contract on the ground that the undisclosed information made the value of the right to extract far greater than the value suggested by the contract price.30 Here again, allowing nondisclosure incents the search efforts of the oilman by recognizing its property right in the key information its search uncovered, namely, that oil lay under the farmer's field. Of course, our researcher resembles the oilman and our subject resembles the farmer. But while this example may provide a powerful precedent for allowing non-disclosure, no one suggests the law would allow the oilman to lie.31

Or rather almost no one. Saul Levmore, while conceding that courts have not yet tolerated lying, points out that the right not to disclose will lose its value without an accompanying right to lie.32 Mere non-disclosure protects the incentive to search only until the other party learns to ask the key question. In the oilman/farmer case, the key question from the farmer is whether the oilman has any reason to believe oil lies under his field; in our case, the key question from the subject is whether the researcher has any reason to believe the subject's cells are valuable. In the face of the key question, the nondisclosure option becomes useless. At that point, any answer that seems to equivocate or evade-including, in particular, an answer from the oilman/researcher that the law does not require it to answer-risks signaling the truth.33 And as we have seen, signaling the truth destroys the incentive to search.

To be sure, an outright, immediate lie may likewise fail to protect the incentive to search should the suspicions of the farmer/subject be otherwise aroused. The farmer may suspect the truth just from the oilman's offer to buy the mineral rights; the subject may suspect the truth just from the researcher's return. Any behavior from the oilman/researcher which the farmer/subject interprets as unexpectedly generous may signal the truth. In Dashiell Hammet's Maltese Falcon, Kasper Gutman, the fat man, nullifies his discovery of the falcon by negotiating too softly for its purchase. His uncharacteristically generous offer signals the antique seller, General Kemidov, that his apparently undistinguished black statuette of a falcon possesses greater value than he thinks, prompting him to reexamine it, discover its value, and replace it with a statuette truly undistinguished. The fact that the oilman/researcher lacks any guaranteed method of avoiding the holdup only underscores the importance of allowing them some latitude to minimize the hold-up problem provided their methods stop short of the coercive or invasive.34

The researcher's lie is best characterized as a low-cost self-help method by which the researcher can internalize the benefits from its search. When a search yields new information, the searcher's ability to keep the information secret often functions in this manner.35 Helping an actor use self-help methods like secrecy frequently internalizes benefits better (at lower social cost) than granting the actor more formal legal protection, such as a patent, property, or contract right to the information in question.36 The social cost of granting more formal rights, especially the cost of establishing, identifying, enforcing, and transferring the rights can easily exceed the negative aspects of legal rules that help an actor keep his information secret.

A straightforward comparison suggests itself. Rules that help an actor keep his information secret should be preferred to more formal legal protection that equally incents the actor's efforts when the negative aspects of the former are less than the cost of the latter. Because there is rarely a need to choose between the former and the latter, the comparison in no way calls for restricting formal legal protection. It does suggest, however, that the value of legal rules designed to assist self-help efforts-here maintaining the secrecy of the information discovered-deserves more appreciation.

Often self-help measures designed to internalize the benefits of an actor's efforts elicit judicial hostility until their function is understood. Antitrust law, for example, advanced enormously when economists described how practices thought to be exclusionary, such as tying and exclusive dealing arrangements, were better conceived as self-help measures to keep free riders from appropriating benefits generated by a firm's efforts.37 Other self-help methods that incent socially valuable creative efforts remain condemned by judicial opinions that fail to appreciate the method's tendency to economize on the costs of more formal legal protection.38

Granted, in other contexts the cost of keeping new information secret in order to preserve the incentive to search can itself be high. For example, when the information concerns industrial or scientific know-how and when the many employees needed to exploit that know-how must learn the key information as a byproduct of the production process, the security measures needed to keep the information from rivals can entail considerable costs. In these instances, more formal legal protection may economize on the costs of these security measures. But when the information consists of the identity of the subject whose cells helped establish a useful cell line, the costs of maintaining secrecy are modest. Employees working with the cell line have little or no reason to learn the subject's identity. The know-how acquired about what the cells can do is easily shared without the need to identify the subject. Even the employees involved in testing the cells and discovering their value need not know enough about the subject to be able to identify him.39

Given these features of the industry, this article suggests that helping the researcher keep the information secret may incent its search more effectively and cheaply that would more formal legal protection. Part IV builds on this suggestion by showing that one type of more formal legal protection-judicial recognition of the researcher's contract rights-proves inferior to judicial tolerance of the researcher's lie. But first, the article addresses the claim that the researcher can easily finesse the hold-up problems, thus rendering the researcher's lie unnecessary and, for that reason, unjustifiable.

III. Intractability of the Hold-up problems

One might think the researcher's ability to evade or refuse to answer the subject's question will avoid the hold-up problems. But a subject sufficiently interested in his ticket in the biotechnological lottery may not be so easily put off. To appreciate the intractability of the hold-up problems, imagine the possible discussion between the researcher's chief executive officer (CEO) and the employee responsible for collecting the cells (Collector) after they have learned that the subject's cells are valuable but that a further collection is needed:

CEO: You know we need to go back to Subject.

Collector: That's what I heard.

CEO: What was he like? Was he altruistic about participating?

Collector: Very much so. Like most in the tribe, he was glad for the chance to help medical research.

CEO: So you don't see any problems in getting him to participate again?

Collector: Oh, I didn't say that. Subject definitely had his eye out for his main chance. He had heard about the Moore case somewhere.40 He knew that very occasionally a person's cells or genes have rare properties that can help in making drugs that are worth millions. He asked if we had any reason to suspect his cells might be especially valuable. Of course, I told him all that we knew then, namely, the chance that his cells were valuable was close to zero. But I barely overcame his skepticism that time. So we can count on him asking the big question again.

CEO: Will he make anything of our coming back to him?

Collector: Sure he will. He's a savvy guy. Our coming back will set off every alarm bell. And I don't think he'll participate until he satisfied his chances are no better than they were before. We'll be lucky to satisfy him with a flat out denial that we have any more reason than before to think his cells are valuable. Though my guess is a flat out lie would suffice.

CEO: There must be a better way than lying. How about ignoring his question and offering him some extra payment?

Collector: If he suspects he's carrying a treasure trove in his veins, a modest extra payment won't persuade him. Once his suspicions are aroused, he'll put us off and think about how to proceed. You can be sure of that. And it won't take him long to realize he should arrange to have himself tested and to deal with our rivals.

CEO: Why don't we tell him we're only coming back because we mishandled the first collection? That's literally true. After all, it's only our "mishandling" of the cell line that is taking us back to him for another collection.

Collector: He'll still suspect our coming back to him means we've found something special about his cells. And so before allowing the collection, he'll ask whether we have reason to think his cells are valuable. We need to be able to reply to that direct question in a way that persuades him to allow the collection without arousing his suspicions.

CEO: Let's use some new hire to approach him then. Someone who when asked the key question can honestly say "Sorry, I don't know anything about whether your cells have commercial value."

Collector: It's a thought. But my guess is that the moment he knows the request comes from us, he'll insist on talking to someone familiar with our testing of his first collection. He'll probably call you or me and put the question to us. And if we delay talking to him, he'll just get more suspicious and wait us out.

CEO: So if our approaching him arouses his suspicions, how about hiring an independent lab to approach him? They can ask him if he'll allow them to draw some of his blood to be used in medical research. That's certainly true, medical research is what we're about. They could even say the researchers who hired them got his name from a list of people previously willing to give blood samples to help research. That's also true.

Then when he asks the key question, the collector can honestly say he doesn't know what the research entails and certainly doesn't know anything about whether Subject's cells are commercially valuable. Sure, Subject will still be suspicious. But look at the hassle facing him if he tries to follow up his suspicion: he'd need to ask this uninformed collector what company wants the samples, and, of course, that collector can honestly say he doesn't know. He'd then need to contact the collector's employer. But the collector's employer could delay him and, if necessary, eventually say he isn't at liberty to disclose who hired him. Or if he called us to ask if we're behind this latest request, we could delay him or transfer his call to someone working here who knows nothing.

Given his wish to help, and anticipating the hassle he'd face in following up his suspicion, don't you think he'd let us take another sample?

Collector: He could, but I doubt it. He was insistent on getting an answer to his key question the first time. I don't think he would have gone ahead had I said what you want your independent collector to say, namely that he can't answer his question. And no matter how unrelated to our first collection we make your independent's request appear, Subject is sure to wonder why he's being approached again. My guess is he'll insist that this collector put him in touch with someone who knows what was learned about his earlier collection. And he won't go ahead until someone answers his question.

And there's another downside to any plan aimed at evading his key question-the evasions might leave him so suspicious that he won't then believe an outright lie. Right now, my instincts tell me that he would believe a lie. But with any evasions, however well-handled, he's less likely to do so.

CEO: So that's what you suggest-lying right from the start?

Collector: Any other suggestions?

CEO: How about telling him everything? And then offer him a share of our eventual revenues?

Collector: Why should he agree to that? I said he likes to help medical research. I didn't say he was selfless. The moment he knows the truth he has no more reason to deal with us than with any of our rivals. He need only alert our rivals to the value of his cells and wait for everyone in the industry to bid for permission to collect his cells. And the permission will predictably go to the highest bidder, not to the company that sampled his cells and discovered their value originally.

CEO: That scenario leaves us with nothing, absolutely nothing, for our successful search. Our rivals will keep bidding until the winning bid allows a competitive return only on the development of the cell line. None of our expense to discover the cell line will ever be recovered. Unless we can lie, Subject can pick our pocket just by asking his question.

Avoiding the hold-up problem is not the only reason for allowing the returning researcher to lie. If such researchers are unable to lie, some may opt to obtain samples from the subject through methods that are even more unseemly and that deny the subject any choice about whether to participate. They may, for instance, surreptitiously seek out samples of the subject's hair, nails, or expelled bodily fluids.41 The grave robbings of 19th century England illustrate the methods to which committed researchers have resorted when unfavorable laws impede their work.42

By keeping the identity of the source of the cell lines the researcher has developed secret, the right to lie will also help the researcher enforce any patents on those cell lines that are eventually obtained. For an aspiring infringer could not then obtain the patented cell line from the subject. Preventing aspiring infringers from gaining access to a cell line becomes especially important because of the lack of any effective remedy against infringement once the infringer obtains access. A.J. Lemin has explained that once an infringer splices the useful DNA from a prior inventor's cell line into the infringer's genomic construction and finds that the new cells produce large quantities of valuable proteins, enforcement of the patent on the first inventor's cell line becomes problematic:

These proteins would probably have no direct structural relationship to the pirated DNA. The fact that they were obtained through an infringement of the first inventor's patent would be ascertained only through a complete sequencing of the DNA in the second inventor's newly engineered organism. Since this organism would not be available to the general public, there would be no immediately way of discovering the infringement. Consequently there is no practical way to protect the inventor of the original cell line from accidental or otherwise covert infringement of his patent rights.43

This is another example of how toleration for self-help measures advances the goals of more formal legal protection.

IV. The Absence of Contractual Solutions

One might think the researcher's dilemma in obtaining a further collection could be solved by careful drafting of the original agreement between the researcher and the subject.44 The agreement could provide that the subject agrees to allow not just the initial collection but a number of further collections as well.45 With the subject locked in by such a provision, the returning researcher could compel the subject to allow further collections even after the subject knows the value of his cells. Its ability to obtain further cells assured, the researcher could then answer the subject's key question with the happy truth.46 And if the knowledgeable subject resists the request for a further collection, the researcher could enlist the court's help to enforce the contract provision.

But this approach is likely to fail. No modern court is likely to require an individual to allow another private party to collect bodily fluids from him against his present will no matter how clearly the individual agreed to allow precisely that. One reason is that the policies informing the common law rule against compelling specific performance of personal service contracts would apply.47 Enforcing a decree that compels the subject to submit further collections by the researcher would require the cooperation of the subject. And the court would need to be prepared to invoke the severe sanctions available for contempt.48

The researcher's inability to enforce such a provision suggests why the case for allowing lying in this context is stronger than in the oilman/farmer case. There, the oilman can avoid the hold-up problem by purchasing the right to search and extract at an early stage before it knows of the presence of the oil. At that point, of course, it has no need to lie. And the law's willingness to enforce the agreement reached then makes all the difference. Once the oilman discovers oil, the court will enforce its right to extract the oil despite the objections of the farmer.49 Indeed those searching for oil sometimes operate in this fashion, buying the right to search and extract at an early stage before they obtain positive information about the chance of finding oil which, if known, would significantly increase the price for those rights.50 Technological restraints, in particular their inability to search under land without entering the land, may explain this practice of acquiring mineral rights early. But the oilman's ability to enforce an early agreement against a farmer who later learns information increasing the value of the right to extract may contribute to this practice as well.

Even if a court was willing to force the subject to allow a further collection, the knowledgeable subject retains the power to exercise the second holdup, "Pay me or I'll alert your rivals to my cells' value and deal with them."51 Because competition from those rivals on the cell line or the end products would reduce the researcher's gain, the subject knows the researcher will be willing to pay to avoid that competition. Accordingly, the astute researcher would also include a provision in the original agreement whereby the subject agreed not to deal with the researcher's rivals.

In one sense this second holdup presents a greater threat to bioprospecting than does the first. For the knowledgeable subject's ability to reduce the researcher's gain from its search by allowing collections by the researcher's rivals exists even when no second collection is needed. The ability to exercise the second holdup exists from the moment any subject learns the value of his cells. From that moment, the researcher can do little to prevent the subject and its rivals from dealing with each other in a manner that reduces the value of its discovery. Thus, the second holdup threatens a researcher even when it has maintained an immortal cell line and needs no further cooperation from the subject. The naive may think that such a researcher possessing both the cell line and a contract provision entitling it to the fruits of the cell line needs no further legal assistance and can justly be compelled to inform its subject of the happy news if only to let the subject enjoy the satisfaction of knowing he provided valuable cells. But the knowledgeable subject need never content himself with so little. By exercising this second holdup, he can seriously threaten the researcher's gain. The wish to avoid the second holdup argues powerfully for never requiring a researcher to notify a subject that his cells have value.

To be sure, the subject's gain from this second holdup should fall short of the maximum rents from his cells as long as the original researcher, pursuant to the court's intervention or otherwise, can also obtain possession of the subject's cells. This is because the amount the researcher needs to offer the subject for his promise not to deal with its rivals should be limited to the maximum amount a rival will offer the subject in return for dealing with it. That amount is sure to fall short of the maximum rents from the cells given that the original researcher also possesses the cells and can also develop and market the end products. The most a rival would offer would be the expected duopoly gain, and a rival will only offer that amount if it can somehow be satisfied that the subject will never deal with additional rivals in the future.52

This contract provision barring the subject from allowing collections by the researcher's rivals will remain important to the researcher even if courts refuse to enforce the provision that would allow the researcher to take further samples from the subject. If the knowledgeable subject is barred from dealing with the researcher's rivals, the returning researcher should more easily and cheaply persuade the subject to allow it a second collection. The knowledgeable subject can still hold up the researcher for much more payment in return for allowing the second collection than the ignorant subject would receive. But the amount of the holdup should be less than if the knowledgeable subject was free to deal with the researcher's rivals. The problem now resembles that of bilateral monopoly for neither party has a good alternative to dealing with the other.53 The knowledgeable subject, not being able to turn to the researcher's rivals (at least not lawfully), can only refuse all further collections. And the subject will not find that alternative desirable. After all, allowing the collection costs the subject virtually nothing, merely a harmless, simple, and momentary drawing of blood. The offer the subject receives from the researcher will easily exceed those trivial costs. Likewise, the researcher lacks any good alternative to dealing with the subject, not being able to exploit its successful search without further cells.

One might think that the ideal situation for the knowledgeable subject would arise when courts refuse to enforce both the contract provision requiring the subject to allow further collections and the provision barring the subject from allowing collections by others. In fact, however, the subject would prefer the situation where the second provision ("I agree not to deal with rivals") was enforceable but the researcher neglected to include it in the consent agreement. Only that situation will yield the subject the maximum rents from his cells. The reason is that when the second provision is unenforceable, the amount bid by the rival companies will disappoint the subject because the bidders will fear that the subject will allow collections by others later despite his promise to the contrary and despite whatever consideration is paid for that promise. That is, the failure to enforce the second provision prevents the subject from giving a binding promise to allow collection only by the winning bidder. In contrast, with the second provision legally enforceable (putting aside the practical problems of enforcement), the amount bid for the right to collect the subject's cells should increase to the maximum rent. Because this ideal situation for the subject only arises when the researcher foolishly fails to include the second provision in the agreement, the situation is irrelevant to a consideration of whether the astute researcher can structure some contract solution to the hold-up problem. For that reason, it merits no further discussion.

In review, there are a multitude of possible outcomes facing the astute researcher. If the returning researcher must inform the subject of the value of his cells, the researcher can only avoid a holdup if courts enforce contract provisions that (1) assure the researcher future access to the subject's cells on the original terms, and (2) bar the subject from allowing collections by others. If either provision is unenforceable, some hold-up problem exists. If the second provision is enforceable but the first is not, the knowledgeable subject can demand payment in return for allowing the researcher the further collections it is seeking.54 If the first provision is enforceable but the second is not, the subject can demand payment in return for not allowing further collections by others. If neither provision is enforceable, the subject can demand payment in return for either or both desired behaviors, but cannot expect his unenforceable promise to refrain from allowing collections by others to yield much extra payment.

Given that courts are virtually certain to refuse enforcement of the first provision, the importance of enforcing the second provision becomes clear. The bilateral monopoly created when the second provision is enforced should provide the researcher at least some gain from, and therefore some incentive for, its search. In contrast, refusing to enforce the second provision as well as the first leaves the researcher nothing for its search.

However essential for preserving the incentive to search the second provision may be, modern courts are again likely to refuse enforcement.55 The modern judicial hostility toward any agreements that smack of servitude or of restrictions on a person's freedom to deal with others comes into play.56 Moreover, the researcher would be asking the court to issue an injunction. And courts traditionally refuse that equitable remedy when the consideration given the promisor, here the subject, has been nominal.57

Even if this second provision was legally enforceable, the ease with which blood can be secretly drawn and the source of a cell line hidden bar effective enforcement. Once the subject knows the value of his cells, he has little reason, apart from his previous promise, to confine his collections to the researcher who discovered his cells' value. The subject may feel driven, perhaps desperately, to find some way to capture for himself more of the value of his cells. Allowing others to collect costs him little. The chance his breach would be detected is remote. His likely penalty should his breach be detected cannot amount to much compared to his likely gain. A contract provision barring a subject from dealing with rival researchers will inhibit only the unusually law-abiding. Even the unusually law-abiding may be able to allow collections by others while maintaining a colorable claim of having acted lawfully by leaving the reach of U.S. law and allowing collection elsewhere.

If the law is not able effectively to police the subject from allowing collections by the researcher's rivals, some may think the law can effectively police the rival researchers from secretly collecting or using the subject's cells. The rival researchers, perhaps, offer deeper pockets and less mobility than the subject and thus provide a more feasible legal target. A lawsuit against them, grounded on their interference with the agreement between the researcher and the subject, may be worth maintaining. But these biotechnology companies need not be the ones who actually collect the subject's cells. Other companies, some of them operating entirely outside the reach of U.S. law, can collect the cells and sell them to the rival researchers without identifying the subject. The subject will face an ongoing temptation to deal with these companies.

One can imagine other attempts to solve the hold up problems contractually. The original contract could provide for revenue sharing between the researcher and the subject should the subject's cells prove valuable. In return, the subject would allow the researcher to collect samples now, and if necessary, in the future, and would also promise not to allow collections by others. More than the provisions discussed previously, those provisions so combined would probably be legally enforceable. But the practical enforcement problems discussed above remain. Having made this deal with the searcher, the knowledgeable subject will be tempted to augment his gain by allowing collections by others, if not within the reach of U.S. law, then outside of it.58 The subject's mobility and ability to hide his breach separates him from the farmer who knows that his breach will be detected, and an injunction against him issued, should he allow extraction of the oil on his farm by a rival of the oilman who discovered the oil.59

No contractual solution to the hold-up problems serves the researcher as well as keeping the subject unaware of the value of his cells. From the moment this subject suspects the truth, the researcher loses control of the cell line and its development. The knowledgeable subject becomes a loose cannon whose behavior endangers the researcher's future return. Whatever promises the subject gave at the time of the original collection, the knowledgeable subject can find some way, legally or illegally, within reach of this country's laws or elsewhere, to appropriate much of the gain from the researcher's search. The self-help method of keeping the subject in the dark protects the researcher's incentive to search better than would more formal legal protection-here, the protection afforded by contract law.

The most helpful contract solution would aim not at controlling the suspicious subject but at keeping the subject from ever becoming suspicious. One provision in the consent agreement that recommends itself would state clearly that the researcher will never inform the subject of the value of his cells. Beyond that, the researcher may want to clarify that it will never inform the subject of the specific goals or methods of its research. This advance warning may eliminate a later need for the returning researcher to lie. In response to the subject's direct question, the returning researcher could refer to this policy and decline further comment. While this response may lead some subjects to refuse the requested further collections, fewer subjects should suspect the truth and thus more should participate as they did before than without this advance warning. Many subjects may accept that the researcher, in refusing to answer their question, is merely obeying a general policy rather than hiding its knowledge that their cells are valuable.

V. Limiting the Proposed Right to Lie

The preceding discussion suggests the right to lie could be limited to situations where the hold-up problems may destroy all incentive to search and where the searcher's inability to overcome those problems through evasions or contractual commitments is manifest. Other variables limit this proposed right to lie further. First, the right to lie, like Kronman's right to nondisclosure,60 is only worthwhile when the search it incents is likely to be socially valuable. And the usual proxy for a socially valuable search is that the new information produced is itself likely to be socially valuable. On this ground, Kronman distinguished new information about market conditions (which the discovering party need not disclose) from information about typographical errors in the other party's offer (which the discovering party must disclose).61 The considerable social value of the researcher's search, acknowledged by the United States Supreme Court in its decision allowing cell lines to be patented, thus distinguishes it from searches for less valuable information.62 A right to lie designed to incent the researcher's search need not call for a general right to lie.

Indeed, the development of methods to use an individual's cells in the production of valuable drugs provides a vivid example of a technological change that by enhancing the social value of certain activities calls for legal changes designed to better incent those activities.63 The development of the telegraph and of wireless communication played a similar role in International News Service v. Associated Press.64 There, the Associated Press (AP) successfully attacked its rival's practice of reporting the foreign news AP had gathered. The development of the telegraph and wireless in effect increased the value of gathering foreign news because that news need only be minutes rather than weeks old.65 Thus, the loss to society from the law's failure to incent the gathering of foreign news increased. And as that social loss increased, the case for incenting those news gathering efforts (in that case, by enjoining a rival from reporting news gathered by AP) strengthened. The externalization of benefits from the AP's efforts and the resulting poor incentive structure for those efforts that was tolerable when the gathering of such news added little to society's wealth became intolerable when, as a result of the wireless, those news gathering efforts added more value. Just so, the law's failure to incent the researcher's search efforts becomes less tolerable as those efforts, thanks to the developments of modern biotechnology, aid society more.

Requiring that the search incented be costly to the searcher confines the right to lie even more. Scholars have emphasized the relation between the actor's cost of undertaking an activity and the need for the law to internalize to the actor the benefits of his activity.66 For example, giving the actor a property right in the fruits of the activity-one method of internalizing benefits-becomes more appropriate as the actor's cost of undertaking the activity increases. At bottom the point is a simple one. The more costly the desired activity, the less likely the actor will undertake it in the absence of some assurance that he will reap its benefits. Conversely, the less costly the desired activity, the more likely the actor will undertake it for an independent reason despite the risk that he will not reap its benefits. Thus in International News where the Supreme Court granted AP a quasi-property right in the news it gathered, the Court identified as a key factor in AP's favor the huge cost it incurred in creating the AP network.67 Without legal intervention to enable AP to appropriate the benefits of its efforts, society could not expect future APs to incur such costs, and society would suffer from a suboptimal amount of news gathering. Kronman likewise limited the right to nondisclosure to situations where the search being incented was costly.68 Only those who had incurred substantial costs in ferreting out new information were free to trade upon it without disclosure. One who obtained the information casually could not. To take Kronman's example, an eavesdropper overhearing new information of which it has reason to believe the other party is unaware must disclose the information to the other party.69

Unlike the social value of the search, which will be high for virtually all searches, not all researchers will face high costs in finding an individual with valuable cells. For example, a researcher who is paid by an individual to determine the value of that individual's cells might discover valuable cells at no risk or net expense to itself.70 Here the risk of the search failing falls not on the researcher but on the subject. And the compensation from the subject adequately incented the researcher's efforts. In this case, there is absolutely no reason to excuse the researcher from honestly reporting the test results to the subject, as the parties agreed. Enforcing such an agreement benefits this research by encouraging individuals who have reason for believing their cells are likely to be valuable to test themselves. Reporting to the individual that his cells are valuable may trigger a holdup but not a hold-up problem. The subject's gain properly incents the subject's search. Not having incurred the costs and risks of searching, the researcher cannot avail itself of legal rules designed to encourage it to undertake those costs and risks. In general, a subject who takes the risks and incurs the costs of self-testing is entitled to whatever compensation, whether in the form of a share of eventual revenues or otherwise, he can induce the researcher to promise.

One can imagine cases short of this extreme example in which the researcher's search costs are so low that the wish to incent the researcher's search will no longer justify a right to lie. A patient may suffer from an abnormal growth of tissues whose cells are disproportionately likely, by several orders of magnitude, to prove valuable. The patient's cells may become available to the researcher through no effort of its own, and the value of the cells may be readily apparent on examination. If in such a case the researcher returns to the subject for a further collection, having found useful cells but having failed to maintain an immortal cell line, and if the subject confronts it with the key question, society's wish to incent searches would not support allowing the researchers to lie. In Kronman's words the researcher, like the eavesdropper, acquired the key information casually, or at least relatively casually compared to a researcher who undertook an expensive and risky search for those with useful cells.71

However, the cost of differentiating case by case between the low-cost and high-cost searcher in order to reserve the right to lie to the latter may not be worth the benefit. Such a differentiation imposes significant line drawing and measurement difficulties. A cruder rule that treats as high-cost searchers all searchers who at their own expense and risk examine cells not previously known to be valuable recommends itself when the administrative costs of a more differentiated rule are considered.72 In effect, such searchers serve as proxy for high-cost searchers.

The previous example of the individual who takes the initiative and incurs the cost and risk of testing himself suggests another limit to the right to lie-the liar must be generally more able to discover the key information than the victim of the lie. For if the cheaper way to identify those with valuable cells is for individuals to search out the value of their cells themselves than for researchers to search for promising subjects, the appropriate legal approach ought to shift fundamentally. In that case, the cheaper way for society to acquire the key information would be to incent individuals either to arrange to search themselves or to gather information about whether self-searching would be cost-justified.

There is no need to consider what legal rules would best further that goal, however, because certain features of this industry suggest that the researcher can generally search at lower cost than can the subject. As a by-product of its research efforts, the researcher acquires some expertise about the family background and profile of traits that might suggest where to search. Moreover, in this fast developing field the researcher can more easily keep up to date on new developments that aid searching. Insofar as effective searching calls for testing many individuals, the researcher is better positioned to do that than the subject who can probably test only his family and himself. To be sure, the subject will learn about his family background and traits more cheaply than the researcher. But the subject likely faces prohibitive costs in learning whether his background and traits render him a sufficiently promising subject to justify the cost of self-searching.

The fact that subjects, for whatever reasons, are not likely to search out the value of their cells themselves further heightens the importance of maintaining proper incentives for searching by researchers. As in the oilman/farmer example, the case for allowing the oilman to suppress his knowledge of the oil would lose much of its force if the farmer, left to his own devices, was likely to drill for minerals himself. For the net social loss from failing to encourage the oilman's exploration would then diminish. Thus, the right to lie may be further limited to situations where the liars are more likely to undertake a search for the key information than are the victims of the lie.

Granted, this research would advance faster (though perhaps at disturbingly high costs) if individuals took the initiative to "search themselves" at their own expense. Accordingly, the approach recommended here calls for rewarding those individuals. Still, given the individual's likely inability to assess whether self-searching is worthwhile, and thus his likely failure to self-search, the law can best incent worthwhile searches by incenting the researchers.

The right to lie may be further limited to situations where the lie is unlikely to effect an allocative loss. The right to lie, like Kronman's right to not disclose, suffers from the disadvantage of causing mistakes. Here the subject in reliance on the lie allows a further collection that he might not have allowed had he known the truth. Mistakes by contracting parties harm society by frustrating the tendency of contracts to move resources into the hands of those who value them most highly. Mistaken investors, for example, may misjudge consumer demand and launch ventures that waste society's resources. A buyer of a house who is unaware of the presence of termites may fail to take remedial action until the cost of dealing with the termites is much greater. Absent the mistake, the waste could have been avoided. Various commentators distinguish between mistakes causing these productive or allocative losses and mistakes that merely redistribute wealth between the contracting parties.73 In their view, the law should aggressively strive to penalize allocative mistakes but should be willing to tolerate redistributive mistakes when doing so incents the production of socially valuable information. Thus, the knowledgeable party should be required to disclose material information to the mistaken party when necessary to avoid allocative losses but need not disclose merely to avoid redistributional losses. Applied here, the issue becomes whether the subject would have allowed someone to collect his cells and use them in biotechnology had the subject known of their value. Can we predict with confidence that the cells would have been put to biotechnological purposes rather than remain in the subject or be used for some other purpose? If so, the researcher's lie does not effect any allocative loss, and the case for tolerating the lie is strengthened.

The previous willingness of the subject to allow a collection in return for nominal compensation supports this prediction.74 The subject's willingness to allow the second collection in return for the same modest compensation conclusively establishes that, when all subjective valuations are counted, his is not the higher valued use of those cells.75 If the trivial costs to him of allowing the collection are swamped by the modest benefits actually offered (mainly the satisfaction of helping medical research), those costs would be swamped, a fortiori, by the substantial benefits that would be offered if he had the knowledge to hold out. Once the cells are known to be valuable in research, they will ultimately be used in research rather than remain in the subject, with or without the lie. The lie merely removes information about the value of the cells from the second consent agreement. It thus allows the subject to grant or withhold consent to the second collection based largely on his subjective feelings about contributing to research which might lead to commercial gain for the researcher. Prohibiting the lie, and thereby allowing the holdup, only redistributes wealth between the subject and the researcher, at the cost of destroying the latter's incentive to search.76

One could limit the right to lie further by confining it to situations where that rule is unlikely to lead victims of the lie to duplicate the liar's previous search. Adoption of this proposed right to lie will admittedly reduce the subject's trust in the returning researcher. Because the subject knows that the law allows the researcher to lie, the subject becomes more inclined to self-search. Any rule short of one requiring full disclosure by all parties suffers from the disadvantage of eliciting "defensive" searches by less informed parties to discover information they fear the other parties already know but are not disclosing.77 Insofar as the nondisclosing parties have already searched out the information, these "defensive" searches duplicate the earlier searches. The greater the resulting social waste, the stronger the case for requiring full disclosure.78 How can one estimate this waste in each specific context? One indicia is clear: if for any reason the less informed party will not undertake a search despite his fear of being mistaken, no waste will occur. In our context, the question becomes whether a subject who knows the law allows the researcher to lie will undertake the costs of self-searching when he sees the researcher return and hears the researcher deny any knowledge of positive information. What will most research subjects in this position decide? Perhaps one can only guess. However, the tiny percent of people whose cells are actually valuable suggests that the chance of that being the case, even when the researcher has returned to that subject, remains remote.79 Thus, the expected costs of self-searching probably still exceed the expected benefits. For this reason, a right to lie should trigger only a modest amount of duplicate searching.

More obvious limits to the right to lie narrow the proposed rule further. Plainly, the researcher could not justify lying about the value of the subject's cells to the tax authorities. Nor could it lie when doing so would increase the amount of misinformation in the marketplace, and therefore reduce the efficiency of the market as a mechanism for allocating resources. For instance, the researcher could not escape its obligations to be truthful which the securities laws impose.

Added together, all the limits suggested here confine the proposed right to lie so narrowly that it might seem to apply to the returning researcher's situation alone. While the right's scope may not be quite so narrow, these limits should allay any concern that embracing the right would compromise the law's condemnation of lying to a significant extent.

VI. Arguments Against the Proposed Right to Lie

The proposed right to lie will discourage from participating in this research those potential research subjects who, for whatever reason, wish to learn the value of their cells. Granted, the proposed right leaves these potential subjects free to search themselves at their own expense. But given the cost of that option, the right should effect a net reduction in the number of subjects willing to allow some collection of their cells for biotechnological purposes. Fortunately for this research, however, the low cost to the subject of participating and the substantial number of people willing to participate simply for the satisfaction of advancing medical research should assure an ample supply of subjects and should keep this objection from becoming significant.

Judicial embrace of the right to lie presents a greater concern than the possible disaffection of those interested in their cells' value. The wider audience that currently supports research financially and through other volunteer efforts may start to view researchers, and the research enterprise, in a less generous light. A legal rule chosen in part to encourage this research could easily backfire if it compromises the image of research among this wider audience.

The chance that judicial embrace of the right to lie would sour this wider audience on supporting research is a matter of public perception that cannot be assessed here. One can speculate that the example of the returning researcher lying would hurt the industry more than the courts' tolerance of that lie. Many people must know by now that some biotechnology researchers become wealthy by finding unusual cells and discovering their value. And many people no doubt suspect that certain researchers are driven by that prospect. But that does not mean the public expects the lie defended here. The only deceit during research many probably expect is that which is required to achieve the immediate research goal. For example, a single blind research project may require misleading subjects who are given a placebo. To be sure, the deceit defended here resembles that deceit in that both advance research. But the public is likely to view the deceit defended here with a more jaded eye. The public is more likely to attribute the returning researcher's lie not to its wish to assure itself some gains from its search, thereby maintaining incentives for that search, but rather to its greedy wish to keep all the gains from the subject's cells to itself.

Lying to the subject may seem especially offensive when compared with the subject's own generous and altruistic behavior. The researcher repays the subject for his willingness to volunteer by lying to him in a way that deprives him of his ticket in the biotechnological lottery.80 Moreover the researcher, instead of justifying the trust implicitly placed in him by the research subject, seems to be preying on that trust. If the researcher has lied to the subject about the value of his cells, and then brazenly and successfully justified that lie in court, the public may wonder what other matters the researchers may be lying about.

The proposed rule presents other problems than the public relations risk to the industry. The adage "one lie leads to another" suggests one jurisprudential problem: by tolerating the collector's verbal lie, the court would seem to tolerate supplemental lies by other employees of the researcher in more formal settings. Suppose the suspicious subject asks the returning researcher to put in writing its denial of any further reason for believing the subject's cells valuable? A law that tolerates the researcher's verbal denial would seem implicitly to tolerate a written one. Then suppose the subject insists on separate written denials from the researcher's employees who have personally tested his cells? Again, tolerating the company denial presumably requires tolerating individual denials. Yet we can see that the quantum of lying may proliferate quickly. Suppose further that the subject insists the denials be notarized or submitted in a formal affidavit or sworn to under oath? Can the researcher who wishes to comply, and thus allay the subject's suspicions, lie in these more formal settings with equal impunity? Criminal law provides a useful limit here, for courts could recognize an exception to the right to lie when the lie is uttered in a setting where lying is a crime. After all, the wish to preserve the integrity of the law's fact-finding processes warrants condemning lies uttered in the course of formal legal proceedings regardless of the lies' social value otherwise. Thus, lying under oath about a material matter triggers criminal sanctions, without regard to the subject of, or the justifications for, the lie.81 Moreover, there is nothing remarkable or anomalous about treating lies differently depending on the legal formality of the setting in which they are uttered. Applying this limit, researchers who lie in a setting where the lie is criminal would subject themselves to the usual criminal sanctions.82 Incenting socially valuable searches is not the law's only mission.

Perhaps the most obvious objection to the right to lie is that it opposes, indeed it seems to be proposed in defiance of, the Kantian principle that one must never treat another person merely as a means to some other end.83 The researcher who responds to the subject's question with a lie in order to secure the second collection provides a quintessential example of using another merely as a means. Further, the lie denies the subject the choice of whether to donate his valuable cells to research or to attempt to secure for himself at least some of their value. A Kantian might claim that proper respect for the subject as a rational, autonomous, and moral being requires affording him that choice. To deny him that choice by means of the lie is to deny his essential personhood.

The researcher can hardly deny that it is treating the subject as a means, but it can reply that in research on human subjects, subjects are inevitably means to the research goals. That subjects are means is an inherent aspect of the research enterprise. The question for a Kantian, the researcher could argue, is not so much the morality or effect of the deception, but rather how much the subject needs to know to be in position to consent meaningfully to the second collection. Here the subject knows a great deal at the time he gives consent. He knows the researcher with whom he dealt before is asking for a further collection for biotechnological research with possible commercial applications. In addition, the subject knows the time, place, risks, methods used, and terms of the proposed collection. Given what the subject knows, the researcher can argue, the subject is able to make a choice that ratifies his personhood. Thus, Kantian principles are not necessarily offended if he is not told more. It would not be practical, after all, to insist that the subject's choice is only meaningful when the subject knows everything the researcher knows. No one can seriously advance such a stern disclosure requirement.

Arguably, misinformation about harms, risks, and costs to the subject offend Kantian principles more than misinformation about additional benefits. As long as the known benefits suffice to induce the subject's consent, information about additional benefits should be viewed as surplusage. Failure to disclose those benefits or misinformation about them need not nullify consent freely given in the hope of lesser benefits.

The amount the subject knows at the time he consents to the further collection combined with the fact that he retains the option to refuse consent distinguish the lie from more offensive ways of obtaining samples. The lie accords the subject's autonomy greater respect and influence than if the researcher seized the samples surreptitiously or coercively.

Another moral objection to the proposed right to lie is that it countenances bad faith behavior. Such a characterization of the researcher's lie seems especially appropriate given the need for trust in the subject/researcher relationship. But the researcher may reply by calling for a fresh evaluation of the morality of the subject's question and of how that question colors its response. Here, conventional norms fall short, for they dismiss too readily the negative effects of the subject's question. It is common to say, for instance, that "there is no harm in asking," at least when the party being asked is a business with much greater ability to unearth the information sought. But here, asking is anything but harmless. While the subject may ask out of innocent curiosity, his question amounts to an attempted appropriation of the researcher's search. In this respect, asking becomes socially destructive for the same reason as attempted theft. Asking threatens the researcher for other reasons as well. When the researcher honestly answers the question "no" but later discovers the cells' value, then the researcher in a later suit by the subject may be unable to show that it was ignorant of the cells' value at the time it answered the question. Asking thus enables the subject to set up the researcher for a later suit whether he answers honestly or not. Once these effects of the question are appreciated, the claim that the researcher's lie amounted to bad faith appears in a fresh light. Whether an actor has behaved in good faith or bad cannot be assessed in a vacuum.

Plainly, the Kantian and other moral objections to the proposed rule cannot be answered entirely. But the returning researcher's situation illustrates that the application of existing norms to new technology may yield anomalous effects. While those who violate the law gain a competitive advantage over the law-abiding in many other contexts as well, a law against lying here will give legal violators a particularly significant advantage over the law-abiding. When confronted with the subject's question, the former, appreciating how inappropriate that question is, and how dangerous to its interests an affirmative answer would be, will opt to lie despite the law. And if sued, the researcher will dispute or deny the lie. Rather than experience remorse, such a researcher will rightly disdain the shortsighted law that would insist on an honest answer to a question so inappropriate. In contrast the law-abiding researcher who complies with the law and answers truthfully will suffer for its compliance. And the lesson it will learn, the message that the law will send most clearly, will be that searching is futile where an uncritically conventional law fails to protect the incentive to search.

VII. The Current Law

The reverence afforded the common law as the accumulated wisdom from case by case adjudication over time naturally inspires a wish to reconcile one's proposals with that law. But although no court has dealt definitively with the returning researcher who lies, there is little reason to believe that courts will guard the researcher against liability by adopting the right to lie. The subject able to prove that the returning researcher has lied can advance various claims under a number of common law categories.84 While an exhaustive review of the possible claims triggered by the researcher's lie is beyond the scope of this article, a sampling of claims will illustrate the gap between the proposed rule and the current law.

The subject could claim the researcher is liable in tort for intentional infliction of emotional distress. The subject would need to show that the returning researcher acted in reckless disregard of the emotional distress the subject might suffer from the lie, that the lie foreseeable caused the subject emotional distress, and that the researcher's behavior in lying constituted outrageous conduct.85 To keep this claim from a jury (the first two elements being unproblematic), the researcher would need to satisfy the court that sensible jurors could not deem its behavior "outrageous."86 But the law's usual abhorrence of lying coupled with the subject's trust in and vulnerability to the researcher probably doom the researcher's claim. And characterizing the researcher's lie as outrageous conduct may expose the researcher to punitive as well as compensatory damages.87 The danger of this liability brings into relief the importance of courts appreciating the reasons for tolerating the lie. By establishing the lie's social utility, those reasons might persuade a court to rule as a matter of law that the lie was not outrageous, despite its similarity to other deceitful behaviors deemed outrageous. Previous decisions defining outrageous behavior indicate that socially useful activities-from discharging for just cause an aged worker to outbidding at an auction one who is sentimentally attached to item for sale-escape that characterization regardless of the actor's intent or the emotional distress that predictably results.88

The subject can attack the researcher's behavior under other tort categories as well. The subject could claim the researcher's lie nullified the subject's consent to the second collection, thereby rendering that collection procedure a battery.89 This tort action would not require any reliance on the informed consent doctrine.90 The action relies only on the long-standing principle that fraud vitiates express consent, here the express consent of the subject to the second collection.

More ambitiously the subject could seek to extend the informed consent doctrine so as to give subjects who allow collections in reliance on lies (or at least lies unrelated to the research goals) a cause of action in tort.91 Thus far, the doctrine only benefits patients, not research subjects. Informed consent only requires that patients be informed of risks of the proposed treatment and of alternatives to that treatment, not of potential financial benefits.92 In most states, a violation of the doctrine only gives rise to an action in negligence for injuries from the treatment. Thus, extending the doctrine to behavior like the researcher's, which poses no hidden risk of bodily harm, would stretch the doctrine beyond its personal injury focus.

Perhaps the subject's most obvious and irrefutable claim against the lying researcher-one sounding in tort and contract-would be fraud.93 Given the researcher's intent to mislead, its awareness that its answer is false, and the likelihood that its false answer contributed to the subject's decision to allow the second collection, the researcher would seem reduced to arguing that the lie did not concern a material matter. The heart of the offer put before the subject, the researcher could argue, was whether the subject was willing to further the researcher's research and commercial purposes by allowing this second collection in return for the nominal compensation. The fact that the subject was highly likely to further those purposes, it could be asserted that the matter lied about was not material to this willingness. Unfortunately for the researcher, the significant chance the subject would have refused to allow the collection on the same terms had the researcher told him the truth establishes the matter's materiality in the eyes of most courts.94 Once the fraud is established, the subject's remedy might even include an injunction against future production of products derived from the fraudulently acquired cells.95

One could also attack the lie on the ground that it violates the fiduciary duty which researchers ought to owe to their subjects. The classic fiduciary relationship can be viewed as an implied understanding to share certain risks with the beneficiary who is, in effect, purchasing the fiduciary's information and using the fiduciary as an agent.96 While such an implied understanding may exist between the researcher and subject as to the risks (physical and emotional) which the subject might face in participating in the research, no such implied understanding would seem to exist as to the financial benefits that might arise from the research.

In support of a fiduciary duty to respond to the subject honestly, the subject might cite the duties Congress imposed on researchers toward subjects when it passed the National Research Act of 1974.97 That Act required the Office for Protection from Research Risks of the Department of Health and Human Services (then the Department of Health, Education and Welfare) (DHSS) to publish regulations for the protection of research subjects.98 It also created the National Commission for the Protection of Human Subjects99 and directed it to hold public hearings every four years and issues findings which, unless rejected by DHSS, were incorporated into new regulations.100 The regulations primarily protect human subjects by requiring the creation of Institutional Review Boards (IRBs) which must review and approve each research project prior to its being funded by DHSS. In turn, the IRBs focus heavily on satisfying themselves that the researcher has obtained the subject's informed consent. The spirit of those regulations-if not the letter-call for the fullest and most updated disclosure of material matters to researcher subjects.101 The regulations' opposition to mere non-disclosure by the researcher suggests an abhorrence of any lying, at least any lying not necessary to the research goals.

However, the congressionally imposed obligations on researchers focused on reducing risks, whether physical or emotional, to the subject. Congress stopped short of imposing an obligation on researchers to further the financial well-being of subjects. Likewise the California Supreme Court in Moore, while recognizing that a doctor has a fiduciary duty to his patient to inform him when samples are taken solely for research purposes, based that duty on concern for the patient's physical well-being and refused to hold that a doctor has an obligation to concern himself with the patient's financial well-being.102 Whatever the duties arising from the doctor/patient relationship, no court has yet recognized a fiduciary relationship between a researcher and its subjects.

The subject could attempt to nullify the second agreement under contract principles as well. The Uniform Commercial Code's emphasis on the fundamental importance of good faith supports a sweeping condemnation of lies.103 The subject could also invoke the law of unilateral mistake, despite that law's apparent willingness to forgive non-disclosure in the Laidlaw and Texas Gulf Sulphur line of cases.104 Not only do cases like Laidlaw stop short of tolerating lying, they probably fail to state the prevailing legal rule even for their own contexts. Despite those cases, the mistaken party-here the subject-can generally void an agreement under the Restatement when the knowledgeable party has reason to know of the other's mistake or has caused it.105

That the subject may advance a number of highly promising claims against the researcher does not mean the fate of the proposed right to lie is sealed. The context, like the technology, is fresh. Courts have yet to confront even remotely similar facts. The Laidlaw and Texas Gulf Sulphur line of cases offer some support for a right to not disclose material information about which one knows the other party to be ignorant as long as that information is the fruit of one's deliberate search. From that right to not disclose, the proposed right to lie is a short step. The need to protect search incentives that supports the former right argues for the latter as well. Indeed, once the other party learns to ask the searching party what it has discovered, the right to not disclose becomes meaningless unless accompanied by the right to lie. However more outlandish the right to lie may seem compared to the right to not disclose, the two rights imply each other.

VII. Related Issues

A. Nullifying the Consent Agreement on Behalf of the Subject when the Cells Prove Valuable.

Some may think the most interesting issue bioprospecting presents is whether the original agreement giving the researcher the right to any revenues derived from the subject's cells should be upheld when attacked ex post by a subject who somehow learns that his cells have proven valuable. The specter of the researcher profiting from the subject's cells while the subject does not may rankle some. They may feel intuitively that the subject should share in any revenues the researcher obtains. And by nullifying the provision in the agreement whereby the subject assigned the researcher the right to use the cells for commercial purposes, the court can use its equitable powers to effect that result.

There seems no reason, however, why the researcher and subject, ex ante, should not be free to enter into binding arrangements that they consider desirable. Nor is there any reason the usual assumption that participants in agreements can protect their own interests should not control here as elsewhere.

The most publicized proponent of nullifying the agreement on behalf of the subject is Thomas Murray.106 Notwithstanding the warning given the subject before the collection that the samples might be used for commercial purposes, the subject's clear assignment of his rights to the researcher, and the nominal compensation, Murray insists that the original collection be viewed entirely as a gift.107 Murray privileges gift-giving over agreed-upon exchange in that he invests gift-giving and the gift relationship with special and superior moral significance. According to Murray, it would pollute our moral relation to our bodies, even to our replenishable fluids and cells, and even after we have abandoned them, were others to make use of them save by our gift.108 And to safeguard the purity of our moral relation to our bodies (themselves a gift), courts should nullify the terms of any agreement concerning bodily materials and enforce instead terms that comply with the norms of gift-giving. What are those norms that so trump the party's wishes? Murray suggests a few: grateful conduct, appropriate reciprocity, and grateful use.109 Applied here, the grateful use norm maintains that no recipient should unduly prosper from the gift, and if profits do result, some must be dedicated to a public service goal and some must be shared with the subject.110

In putting gift-giving on a more elevated moral plane than exchange and then insisting that certain transfers be only by gift, Murray echoes earlier authors, most notably Richard Titmuss.111 These authors exalt primitive tribes who emphasized gift-giving as a method of establishing networks of reciprocity that bound the community together. They find support for the moral superiority of gift-giving over agreed-upon exchange in the fact that gifts were typically used to satisfy the recipients "needs" rather than his mere "desires." That is, gifts were more often given to avoid starvation than to avoid some lesser dissatisfaction.112

Looking at the same anthropological phenomena through an economic lens, Richard Posner punctures this romantic illusion.113 He explains that gift-giving provided insurance against major losses like starvation in a society where insurance markets were not sufficiently developed for insurance to be otherwise obtained.114 For example, giving to another whose fields were located elsewhere would create an obligation on the other's part to reciprocate in time of need and thus would diversify against the risk that one's own crops would fail.115 The well-known tendency for insurance to be sought only against major losses likewise explains the restriction of gift-giving to what Murray calls "needs."116 As insurance, gift-giving suffers in comparison to the market insurance available in more developed societies. The move away from gift-giving to the agreed-upon exchanges of more developed societies thus appears, at least on this front, as an advance. Murray's views, like those of Titmuss, represent the by-product of a romantic ideology rooted in antipathy toward the market economy and idealization of the primitive.117

B. Sharing Revenues in the Absence of an Agreement

When samples come from therapeutic efforts to treat patients rather than from research subjects participating in clearly designated research projects, the patients are not always alerted to the possibility that their samples may be used for research or commercial purposes.118 And research subjects who know and consent to the use of their samples for research and commercial purposes may not always have assigned all rights to revenue derived from those samples to the researcher. These "non-consenting"119 parties (patients) figure significantly in one of biotechnology's most discussed issues: when the samples prove valuable, should the non-consenting patient be entitled to a share of the revenues?120 While we may prefer that doctors and researchers obtain consent, the better rule in the absence of any agreement assigning the revenues from commercial use to the patient or the researcher would give the patient no right to share in the revenues or to control the course of the research.121

First, giving the patient a share will not encourage socially desirable behavior. It will not, for example, encourage the patient to act in a way that would increase the value of his cells. Giving people a right to the earnings from their native talent incents them to develop those talents. But there are no such developmental behaviors by which the patient can add value to his cells. The patient either possesses valuable cells or does not. His possession of such cells is a matter of his genetic endowment and not of any behavior the law can influence.

To be sure, with a default rule that recognized the patient's right to share, patients will feel more enthusiastic about allowing collections for therapeutic purposes. At least they will be much less likely to object should they learn their samples were subsequently used for research and commercial purposes. And if, as a result, more samples are available to researchers, that would be some reason for letting the patient's share. But the therapeutic reasons alone will persuade patients to allow the overwhelming majority of these collections, and there is no need to give the patients the extra incentive of a possible share in far-removed revenues.

Moving from the context of the patient to that of the research subject whose consent agreement was silent about the right to revenues, one could argue that a default rule recognizing the subject's right to share would give the subject greater incentive to participate in the research project. The resulting greater willingness of subjects to participate should lower search costs. But the savings should be modest if, as appears to be the case, many subjects are willing to allow collections without this incentive. Given the generous spirit of so many subjects, the extra incentive of a possible share seems unnecessary. It may look unkind to deny subjects a right to share in the revenues on the ground that most of them are generous and altruistic enough to participate in the research anyway. But this is just another application of the general principle that the law need not incent low cost activities that the actor is likely to undertake for independent reasons despite his inability to internalize the benefits.122

By awarding the subject a share of the revenues, the law should reduce the need interested subjects may feel to self-search.123 That effect would strengthen the case for sharing if self-searching was a wasteful and high-cost method of finding valuable cells and if many subjects, denied the right to share, would resort to it. While the first condition is met (the subject being a higher-cost searcher than the researcher),124 denying the subject the right to share is unlikely to induce much self-searching, wasteful or otherwise, given the long odds against having valuable cells that face a subject who has no particular reason to believe his cells valuable. Thus, recognizing the subject's right to share realizes little savings on this score.

Compared to the meager social benefits of assigning the patient a share of revenues, the costs society would incur from this default rule are striking. Measuring the patient's share of the revenues would entail substantial costs.125 A court would need to identify the contribution, if any, of the patient's cells to the end product. But many laboratory transformations over a long period of time separate the original extraction from the end product.126 Research results are typically a series of several joint efforts with specimens provided by several individuals.127 Moreover, the cells of some individuals may have contributed merely by educating the researcher about the kind of genetic material that might express the desired protein product. The cells of others might have helped merely by educating the researcher how to make hybridomas or monoclonal antibodies in the first place. That is, neither those cells nor the cell line derived from them constitute any physical part of the end product. How then can the contribution of those cells be measured? Even if the right to share was (rather arbitrarily) limited to patients whose cells constitute some physical part of the end product, a number of patients could typically claim a right to share. Often there will be no way to assess the relative contribution of each patient's cells. As the Office of Technology Assessment found, "A determination of the contribution of any single individual to the marketable end product would be speculative."128

One could reply that the measurement problems should diminish in the face of a clear rule recognizing the patient's right to share, because researchers would react to that rule by negotiating the patient's share at the time of the collection. But the negotiations thus induced, which will sometimes need to occur around the patient's hospital bed, impose costs of their own. Perhaps the greatest cost stems from the delay of research that may result if the two sides hold out for a greater share. But even when negotiations proceed smoothly, the negotiating costs may be substantial compared to their benefits in light of the many patients whose collections researchers may wish to examine and the tiny percent of these negotiated agreements that will ever be used. Indeed researchers can argue that the cost of the negotiations needed to allocate the right to revenue should be analogized to the cost of transferring property rights from a lower to a higher valuing user.129 As the costs of transferring those rights increase, perhaps because of the number of agreements needed, the case for recognizing the lower valuing user's property right-and thus compelling the transfer in the first place-weakens. For these reasons and others discussed below,130 it is surprisingly unclear whether society wants to require researchers to negotiate with patients for use of their cells. There is little point to embracing a pro-plaintiff rule in order to induce negotiations which cost more than the benefits they provide.131

The record-keeping required to measure the patient's share also imposes costs. To keep a court from overestimating shares, researchers would need to keep track of patients, cell lines, the patients' contribution to each cell line, the role of each cell line in developing the end products, and the sales of the end products to which each cell line contributed. Studies involving the development of cell lines can take years to complete and commercial application even longer. The cost of keeping records of the origin of all the cell lines involved cannot be ignored. In light of the small percent of cell lines that ever yield revenues, these record-keeping costs may dwarf the revenues that researchers are eventually compelled to share.

No doubt the greatest cost of recognizing the patient's right to share comes from the possible effect of that rule on the behavior of researchers. Before the patient's claim to a share of revenues is clearly recognized or rejected, the usual costs of legal uncertainty burden the researcher. The researcher faces the specter of the law seizing a substantial share of its revenues and branding it as a converter or thief in the process. That specter also warns off any would-be purchaser of the cell line for the purchaser cannot be sure what rights, or what liability, it will be buying. The researcher's fear of these lawsuits may sour its enthusiasm and drive its energies and investments elsewhere. As Hamlet said of another fear, "enterprises of great pitch and movement, with this regard their currents turn awry, and lose the name of action."132

Eliminating the legal uncertainty by ruling in the patient's favor will of course further reduce the incentive for the researcher's endeavors. The chance of a loss of revenue should a patient discover that his cells have been used now becomes a certainty. Moreover, recognizing the patient's right to share in effect divides the ownership of the cell lines, thereby inflicting the usual costs of divided ownership.133

Recognizing the patient's right to share the revenues implies some right in the patient to control the course of the research. Thus, the possible harm from the patient's right to control argues against the right to share. And the divergent interests between the patient and researcher render that harm all too likely. For example, the patient's interest might oppose the widespread practice among researchers of exchanging newly acquired information and tissue samples freely.134

Notwithstanding the utilitarian grounds for a default rule favoring the researcher, some will say the patient becomes entitled to a share of the revenues on grounds of fairness just because use was made of his cells. To let the researcher profit from those cells but not the patient seems unjust.135 This claim will often lose some of its appeal when the use of the patient's cells is examined more closely. In genetic engineering, for example, the patient's cells may serve only to educate the researcher about what kind of genetic material will express the desired protein product.136 Genetic engineering typically leads not only to the modification of cells but to the development of organisms that have never existed in nature separate from other organisms. In this sense those organisms are new. To be sure, the patient's cells have contributed to that organism. But the patient's contribution does not differ significantly from that of subjects whose cells led researchers to learn the methods of genetic engineering originally.

The contribution of the patient's cells to the end product nevertheless provides a more compelling equitable ground for granting the patient a share than does the patient's behavior. The relatively passive behavior of allowing the collection requires little effort and less preparation. In both respects, it contrasts sharply with the strenuous and elaborately grounded behavior of the researcher who must find the cells, identify their value and develop the end product. Why equity demands a windfall for the passive at the expense of the active is not self-evident. At bottom, the patient's equitable claim relies on the lottery mentality which champions claims based on a wild fortuity over claims based on value added through extensive preparation, careful planning, and painstaking effort. Fueled by a populist fervor, the lottery mentality favors claims of ordinary folk over claims of entrepreneurs or educated professionals regardless of the effect of recognizing those claims on society.

C. Whether Researchers Should be Required to Obtain a Patient's Consent to Research and Commercial Use

The default rule proposed in the preceding subsection, by denying the patient a right to share in the revenues, will certainly invite researchers to refrain from notifying patients that samples taken from them for therapeutic purposes will also be used for research and commercial purposes.137 For the researcher's failure to notify will not give the patient a claim for any revenues directly or indirectly derived from the collections. Given that default rule, the question becomes whether the law should put any pressure whatsoever on researchers to alert patients to the possible research and commercial use. For example, the law could afford the non-consenting patient some claim against the researcher short of a claim for a share of the revenues, the hope being that the lesser claim will suffice to induce the researcher to obtain the patient's consent.138

At least two considerations call for requiring researchers and cooperating health care professionals to obtain the patient's consent to research and commercial use. First, some patients will object to research or commercial use of their samples on religious grounds or on other grounds of principle.139 Their dignitary interest in avoiding offensive uses of their cells deserves respect. Like the property owner who puts a subjective value on his property that is much higher than the market value, that subjective valuation ought to be taken into account in deciding the optimal use of the samples. There is a welfare loss, after all, when samples are used for research even though their utility for that purpose is swamped by the disservice that use causes the patient. And the patient's subjective valuations will only come into account if the patient's consent must be obtained. Moreover, so few patients are likely to refuse consent that their refusals should not interfere significantly with the research.

Second, in the vast majority of cases the researcher should be able to obtain the patient's consent to research and commercial use easily, at least when the researcher asks early enough, namely, before the patient suspects his cells have a significant chance of being valuable. Another sentence in the notification given patients upon their arrival at the hospital or in the consent form which the patient needs to sign for his treatment may be all that is needed.140

Moreover, the court in Moore has already found illegitimate one reason for the reluctance of doctors to mention to patients the possibility of research and commercial use.141 That reason is the doctor's wish to appear exclusively devoted to the patient's health rather than involved in some research use of the patient's samples. Doctors may fear that any hint of divided loyalty risks rupturing their relationship with the patient and thereby endangering the patient's therapy. Regardless of whether this fear is warranted, the court in Moore brushed this fear aside and held that the patient is entitled to be informed when his doctor has a research interest in his recommended therapy.142

Research hospitals that do not routinely alert patients to the possible research or commercial use of their extractions defend their practice on several grounds.143 They claim that mentioning the possibility of commercial use to the patient excites unwarranted curiosity and unreasonable hopes and invites further inquiries from the patient about the research.144 The burden of supplying each patient with all the information he demands may become significant. Occasionally, a patient also may insist on controlling the course of any research that would use his samples.145 In an effort to assure that their samples are examined for possible commercial value, some patients may falsify their medical history. Thus, mentioning this possibility adds an element of complexity in obtaining samples that may imperil the therapeutic goals that called for the collections originally.146 How patients in fact react to mention of this subject, and whether mentioning it would impede therapy or research, is something the health care professionals and researchers are better positioned to assess than a judge would ever be. They are better able, after all, to see the patient's reaction when the topic is broached and the patient's consent requested.

Moreover, a law requiring consent would need to indicate how much information researchers need to convey about the research use intended. Need they describe only the goals or the methods as well? How specifically must the goals and methods be described? Under the informed consent doctrine, the test of materiality governs which risks of treatment must be disclosed. And that test requires disclosure of risks to which a reasonable person would attach significance.147 However, given the widely divergent views about research that patients possess, a researcher will be hard pressed to identify the information about its research that patients will find significant.

Once consent is required, it follows that patients can at least attempt to condition their consent on the researcher's promise to adhere to certain research goals and methods of which the patient approves. Respect for the patient's autonomy in this regard will present further issues. Will courts enforce, for example, a patient-imposed requirement that the patient's cells only be used in research designed to benefit certain races?

Because the patient is consenting to the collection on therapeutic grounds, the research use requires no added invasion of the patient's bodily integrity. Nor does the research use expose the patient to any additional risk of harm. The lack of additional risk argues against an extension of the informed consent doctrine because that doctrine is driven by the wish to assure patients the power to decide whether to incur the risks of doctor-recommended treatment. The patient's decision-making power in that regard would in no way be impaired by research use of his samples.

While research use is more common, the patient's samples will so rarely lead to a commercial use that requiring consent to this use from every patient seems unduly burdensome.148 As the chance of using this consent becomes more remote, the cost of obtaining the consent, though small with each collection or patient, approach and eventually exceed the benefits. It would be foolish for the law to insist that researchers prepare for the possibility of samples having commercial value if the number of times that preparation will be put to use is trivial. When the chance of a contingency becomes sufficiently remote, the law should not insist that the parties provide for that contingency ex ante. Much of contract law, for example, aims to establish default rules for contingencies so remote that it is not sensible for the parties to provide for them. With such contingencies, it may not be wise for the law to require agreement.

Thus, courts should be surprisingly hesitant before insisting, through even the mildest remedy, that researchers alert patients from whom a collection is recommended on therapeutic grounds that some research or commercial use of the sample collected is also possible.149 Arguably, the use of the samples should be classified with other research involving patients for which consent is not required, such as passive behavioral observations or the anonymous tabulation of routine data like body temperature, blood pressure, height, and weight.

IX. Conclusion

Previous commentators have discussed the respective claims of the subject and researcher by asking essentialist questions such as whether the subject's cells in essence constitute the subject's property.150 Once the essentialist questions are answered, analogies and metaphors to existing legal categories take over. Through such reasoning, the subject emerges with causes of action that vary from conversion151 to assessment152 to confusion,153 to violations of his rights of commerciality,154 privacy155 or informed consent.156 While the behavior of the returning researcher who lies has not yet been discussed, those who resolve legal issues by relating concepts and looking for the preexisting legal categories that bear the closest resemblance to the behavior in question will confidently condemn that behavior as fraud.

This article has argued that the sensible, socially apt, and efficient rules are to allow the returning researcher to lie, to enforce faithfully any agreements which assign rights to the researcher, and to resolve ambiguities in favor of the researcher. The contentions rest on an examination of the economics of developing these biologic resources. That focus rejects all essentialist claims.157 That focus pays no heed to whether existing legal concepts like fraud can be expanded to apply to the researcher's behavior, nor to whether the rules that seem most sensible are required by the law of property or of informed consent. While the law elsewhere may be driven by policies that operate here as well, this focus discusses those policies directly and does not cast about for the legal metaphors that fit the context here with the least Procrustean stretching or collapsing. New technologies often challenge courts to alter the legal environment so the technology can better flourish. This technology will suffer needlessly if courts regulate it based on formal resemblances to issues of the past.