Academic journal article
By Mattioli, Michael
Northwestern University Law Review , Vol. 106, No. 1
ABSTRACT-This Article examines and evaluates the theory that patent holders privately self-correct the government's excessive apportionment of patent rights by means of various cooperative efforts including patent pools, research consortia, and similar licensing collectives. According to some experts, these efforts are proof that market participants have the wisdom and the will to collectively disarm their patent arsenals in order to advance long-term innovation. But until now, this theory of market self-correction has not been evaluated through empirical study. Drawing on interviews and original research, this Article provides an ethnographic view of collective patent licensing episodes. Amidst these stories of success and failure, cooperation and conflict, the picture that emerges is more complex than theory alone predicts: government policies, the backward-looking concern of litigation over existing products, and various social goals significantly influence collective patent licensing. This study suggests some important refinements to theory and points the way forward for industry, lawmakers, and the public to begin a new discussion about the role of collective behavior in our patent system.
This Article examines the bold and puzzling theory that self-governed communities of patent holders are spurring innovation through patent sharing.1 The hope that markets can effectively shed excess patent rights to enhance dynamic efficiency sits at the crossroads of several avenues of contemporary legal and economic thought. Whether this emerging theory is supported, however, by the recent rise of high-profile patent-sharing efforts led by firms, universities, and governments remains an open and urgent question. By applying theoretical insights to a unique ethnographic study, this Article examines whether patent sharing is properly understood as a form of market self-regulation.2
Patents embody a bargain. In exchange for the promise of useful innovations, society grants inventors an exclusive chance to profit from their ideas. Thomas Jefferson, America's first patent examiner, once wrote to a Boston mill owner engaged in a patent dispute, "I know well the difficulty of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not."3 With these words, Jefferson concisely and candidly framed the central challenge behind patent law: crafting a property regime that does not overreach its purpose.
Today, a rising chorus of critics argues that the U.S. patent system has become too big for its own good.4 The past thirty years have been marked by steep rises in the number of patent applications, issuances, and lawsuits.5 From 1990 to 2009 alone, the number of U.S. patent filings nearly tripled.6 Studies indicate that these increases do not stem from greater innovation, but rather from the deliberate attempts of firms to increase the size and reach of their patent holdings.7
The trouble with excessive patent coverage lies in the layered nature of innovation. Just as Isaac Newton once spoke of seeing further by "standing on the shoulders of giants," today's innovators must continually build upon the work of their predecessors and peers.8 Inventions are not islands. Excessive patent coverage, however, can lead to situations where research and development projects infringe multiple patents held by different owners. Even for large firms and institutions, identifying and licensing such multitudes of patents is often too expensive and uncertain to justify. As a result, cumulative innovation is discouraged-a condition Michael Heller and Rebecca Eisenberg famously dubbed "The Tragedy of the Anticommons"9 and which this Article terms "patent gridlock."10
Two government institutions are typically blamed for this state of affairs: The United States Court of Appeals for the Federal Circuit and the United States Patent and Trademark Office (USPTO). …