The incentive thesis for patents is challenged by the existence of alternative means by which firms can capture returns on innovation. Taking into account patent alternatives yields a robust reformulation of the incentive thesis as mediated by organizational form. Patents enable innovators to make efficient selections of firm scope by transacting with least-cost suppliers of commercialization inputs. These expanded transactional opportunities reduce the minimum size of the market into which any innovator–or the supplier of any other technological or production input–can attempt entry. Disaggregation of the innovation and commercialization process then induces the formation of secondary markets in disembodied technology inputs. These organizational effects over transactional, firm, and market structure generate specialization economies that minimize innovation and commercialization costs. These efficiencies in turn exert incentive effects consistent with the standard thesis and market growth effects that extend beyond it. Conversely, the absence of patents, and the resulting obstacles to bargaining over ideas, can compel innovators to select overintegrated structures that inflate commercialization costs, resulting in distorted innovation investment and product output. These relationships are broadly consistent with organizational patterns in selected historical and contemporary technology markets, as illustrated in particular by disintegration processes in the “fabless” segment of the semiconductor market.
Ever since the Supreme Court pronounced in Diamond v. Chakrabarty that “Congress intended statutory [patentable] subject matter to include anything under the sun that is made by man,” the thrust of subject matter eligibility has been broadly to include all subject matters that are not “laws of nature, physical phenomena, and abstract ideas.” In essence, subject matter is eligible for protection under the patent laws if it is man-made and is ineligible if it is a part of nature. Such a definition of subject matter eligibility is, unfortunately, unhelpful in the biomedical context. A basic discovery involving a new pathological pathway, for example, represents an advancement of both basic knowledge about nature as well as basic know-how in diagnosing and treating human diseases. A successful isolation of a gene, protein, or cell represents a triumph both for our understanding of nature as well as our ability to diagnose and treat human diseases. This Article argues that subject matter eligibility should neither be a mere prohibition against the patenting of nature and abstract ideas, a mere pseudorequirement to enforce other patentability requirements, nor a mere exercise in the statutory interpretation of 35 U.S.C. § 101, but a unique constitutional requirement to ensure that the patenting of eligible subject matter promotes the useful arts. To take into account the cost side of patenting, eligibility may be defined in part as a prohibition of the patenting of “basic tools of scientific and technological work.” To ensure that knowledge that can be provided freely to the public is not unwittingly removed from the public, eligibility may be defined in part by distinguishing “inventions” from “discoveries,” as viewed from a person skilled in the art. To accentuate the role patents play in a nation’s larger Industrial Policy, eligibility may be limited to “industrial applications” and “technology” that are the purview of Industrial Policy. This Article emphasizes the importance of viewing the patent regime not just as a property system, but as part of a larger regulatory regime for promoting innovations.
The American patent system, mired with rising costs and uncertainty, is in need of reform. To address these issues, the United States needs a viable proceeding to challenge the validity of granted patents and a forum specialized in patent matters to hear infringement litigation trials. Rather than implement proposals from legislators and commentators that may be too duplicative, incremental, or heavy-handed to put into practice successfully, the American patent system would be best served by bringing its existing administrative alternatives, with some enhancements, to the forefront as a comprehensive solution for patent reform.
This Article proposes a framework tailoring the fair use doctrine specifically for technology cases. At the inception of the twenty-first century, information technologies have become increasingly central to the U.S. economy. Not surprisingly, complex copyright cases involving speech technologies, such as DVRs, MP3 devices, Google Book Search, and YouTube, have also increased. Yet existing copyright law, developed long before digital technologies, is ill prepared to handle the complexities that these technology cases pose. The key question often turns not on prima facie infringement, but on the defense of fair use, which courts have too often relegated to extremely fact-specific decisions. The downside to this ad hoc adjudication of fair use is that it leads to an uncertainty over what is permissible that may impede innovation in speech technologies. This Article addresses this ongoing problem by proposing that courts recognize a specific type of fair use—technological fair use—and tailor the four fair use factors accordingly. Technological fair use is supported not only by a synthesis of existing case law and economic theory, but also, more importantly, by the constitutional underpinnings of the First Amendment and the Copyright and Patent Clause.
For several years, HD DVD and Blu-ray competed to replace DVD and become the next-generation movie disc format. The battle was not fought with technological superiority but instead with exclusivity contracts. This Note analyzes whether these contracts violated the Sherman Antitrust Act (“Sherman Act”).
Though largely unnoticed by the public, March 1, 2007, marked the transition from traditional analog television to digital broadcast television (“DTV”), a move some have characterized as the most significant change to the television broadcast industry since color replaced black and white. On that date, Federal Communications Commission (“FCC”) regulations went into effect mandating that all televisions sold in the United States contain a digital tuner capable of receiving DTV broadcast signals. If consumers are unaware of the change now, it will not escape their attention on February 17, 2009, when their old analog sets go dark as broadcasters comply with further FCC regulations mandating the cessation of all analog television broadcasts. Ultimately, the government intends to profit by auctioning off the additional frequency spectrum freed up by the more efficient digital use of the broadcast spectrum.
The Supreme Court has held that, as a general matter, an injunction cannot issue if there is an adequate remedy at law. This follows, according to the Court, because the standard for when injunctions may issue derives directly from the practice of the English Court of Chancery around 1789, which followed the same principle. This Article argues that the Supreme Court’s reading of general Chancery custom is inapposite in copyright cases. The historical record shows that legal remedies were deemed categorically inadequate in copyright cases, and that by 1789, the Chancery’s jurisdiction to issue copyright injunctions had become concurrent and incontestable. The Supreme Court could thus hold today, without running afoul of traditional equitable principles, that a copyright injunction can issue without regard to the adequacy of legal remedies. This Article reaches its conclusion only after undertaking the most comprehensive treatment of the subject to date. It relies primarily on the original manuscript records of 220 infringement suits brought in the Court of Chancery from 1660 to 1800, which are stored at the National Archives in London, England, and a further review of earlier copyright-infringement suits from 1557 to 1680 in antecedent tribunals, many of which are also only available in manuscript form. The topic of this Article is particularly timely given the Supreme Court’s recent decision in eBay Inc. v. MercExchange, L.L.C., where it discussed the standard for issuing injunctions in patent cases, and where Chief Justice Roberts stated in a concurring opinion that lower courts should consider the inadequacy requirement in light of historical practices.
In 1998, in State Street Bank & Trust Co. v. Signature Financial Group, Inc., the U.S. Court of Appeals for the Federal Circuit rejected the contention that “business methods” are per se unpatentable, and stated that a business process patent can be granted on the same basis as any other patentable invention. The decision fostered a new awareness that business method claims could be patented, and in the wake of State Street Bank, the United States Patent and Trademark Office (“USPTO”) saw an almost six-fold increase from 1998 to 2001 in the number of patent applications for business methods. While some commentators applauded the State Street Bank decision, others maintained that methods of doing business should be an excluded category of invention, articulating that the traditional filters of patent law are not appropriately sized to sieve overly broad business practices from attaining patent protection. Despite those concerns, business methods remain patentable inventions.
In the last several decades, the legal academy has devoted a great deal of attention to developing a cogent definition of “property.” During this period, scholars have grappled with the related question of how intellectual property rights – namely, patents, copyrights, trademarks, and trade secrets – fit within emergent property theories. By and large, the academy has concluded that intellectual property qualifies as “property” under all of the relevant analytical rubrics.
As expected, both policy makers and the judiciary have drawn upon the theoretical categorization of intellectual property as “property” when fashioning the normative rules that govern the recognition, allocation, and protection of intellectual property rights. In many instances, traditional property law concepts have been imported into intellectual property law with little or no consideration given to the theoretical and utilitarian distinctiveness of intellectual property. Nowhere is this wholesale importation – and its shortcomings – more apparent than in the law governing sentencing for federal crimes involving the violation of intellectual property rights.
One of the many requirements for patentability is that the inventor must disclose the “best mode” of the invention. This requirement is set out in the first paragraph of 35 U.S.C. § 112, which states that the patent’s specification “shall set forth the best mode contemplated by the inventor of carrying out his invention.” Based on the statutory language, the test for whether the best mode has been properly disclosed has a subjective element – whether or not the inventor believed that there was a best way to practice the invention at the time the patent application was filed. If the inventor believed that a certain method of practicing the invention was better than other methods, the inventor had to disclose that mode. If the inventor did not have a preferred method of practicing the invention, then there was no best mode to be disclosed.
At first, the test seems fairly straightforward. An inventor either had a preferred mode at the time of filing, or the inventor did not. The test becomes far more complicated, however, when the involvement of more than one inventor requires the consideration of multiple opinions. For example, what happens if there are two inventors and they disagree as to what is the best mode? Whose view controls and which mode or modes must be disclosed? In a case of joint inventorship where each inventor works on different parts of an invention, what happens when an inventor who did not work on a certain part prefers a best mode for that part, and that preference is not shared by the person who actually invented it? If a joint inventor is accidentally omitted from a patent, and the omitted inventor had a best mode preference that was not disclosed at the time of the application’s filing, should the patent be invalidated for failure to disclose that mode when the omitted inventor is added to the patent later? These are all questions that are critical to best mode analysis, as patent infringers currently are able to use the best mode requirement as a weapon to invalidate patents in litigation. And in order to answer these questions effectively, it is increasingly important to understand how the ease of establishing joint inventorship under the current statutory framework affects best mode analysis. Unfortunately, the Federal Circuit neglected to consider the impact of liberalized joint inventorship principles in Pannu v. Iolab Corp., where, in a footnote in dicta near the end of the opinion, the court appeared to set a standard that required any joint inventor who has a best mode preference for any claim to disclose it.