Policy Levers in the Patent System
By Dan Burk (Minnesota) & Mark Lemley (Berkeley)
89 Va.L.Rev. 1575 (2003)
Link to FULL TEXT of article
Summary
Recent work by legal scholars has noted that the Federal Circuit tends to promulgate so-called “bright line rules”—simple rules that can be applied without a detailed analysis of the facts in a case—in situations where patent law has traditionally called for a more fact-intensive and policy-oriented analysis—interpretation of patentable subject matter, for example, or application of the nonobviousness patenting standard (Rai 2003, Thomas 2003). In this article, Professors Dan Burk and Mark Lemley identify a variety of flexible standards within the patent law that could be used by the Federal Circuit as “policy levers” to achieve desired policy goals of patent law. According to Burk and Lemley, these policy levers are particularly important in calibrating the patent system to address the differences in innovation across industries.
Burk and Lemley first identify five distinct models of innovation in the patent law and policy literature. These models, they argue, correspond to different industries. There is Edmund Kitch’s prospect theory model, which considers broad patent rights necessary for coordinating efficient innovation; Kenneth Arrow’s competitive innovation model, which considers competition necessary for innovation; the cumulative innovation model, which looks at how to allocate rights between initial inventors and improvers in cases where one innovation builds upon a previous one; the anticommons model, which examines the problem that large numbers of upstream rights pose for downstream innovation; and the patent thickets model, which focuses on similar problems. According to Burk and Lemley, the chemical/pharmaceutical industry is best characterized by the prospect model; business methods and the early software industry through the competitive innovation model; the current software industry through the cumulative innovation model; the biotechnology industry through the anticommons model; and the semiconductor industry through the thickets model.
Burk and Lemley reject the idea that each industry needs unique mechanisms of protection. Rather, they suggest that courts—above all the Federal Circuit—can address the needs of particular industries by employing various sources of judicial discretion in patent law. The authors argue that some of these policy levers operate on a “macro” level—that is, they acknowledge differences between industries. Others operate on a “micro” level: they do not make such distinctions, but they do tend to have disproportionate impacts in particular industries.
Burk and Lemley identify a host of doctrines that have, at
least historically, served as policy levers within patent law. For
example, the exclusion of abstract ideas from patentability has
limited the scope of some patents. Use of the utility doctrine in
biotechnology—the requirement that in order to obtain a
patent, an invention must have a directly valuable use and not
merely be interesting for further research—has limited the
ability to patent upstream biotechnology. The authors also suggest
new doctrines that could, in the future, serve as policy levers.
For example, a fortified right to experimental use could be
particularly valuable for industries like software, where it is
difficult to design around a patented product without reproducing
the product. A new type of patentability inquiry could assess
whether innovation in a particular industry or in a particular
case was highly costly or uncertain, in which case a lower
nonobviousness standard, or perhaps a more liberal disclosure
standard, might be merited. Because reverse engineering is
important for software development, patent misuse doctrine could
be extended to bar prohibition on reverse engineering in software
patent licenses.
References
Arti K. Rai, “Engaging Facts and Policy: A Multi-Institutional Approach to Patent System Reform,” 103 Colum.L.Rev.1035 (2003)
John Thomas, “Formalism at the Federal Circuit,” 52 Am.U.L.Rev. 771 (2003)
