Harmonizing the Exclusionary Rights of Patents with Compulsory Licensing

By Gwartney, Troy L. | William and Mary Law Review, March 2009 | Go to article overview

Harmonizing the Exclusionary Rights of Patents with Compulsory Licensing


Gwartney, Troy L., William and Mary Law Review


TABLE OF CONTENTS

INTRODUCTION

I.   THE EXCLUSIONARY RIGHT AND COMPULSORY
     LICENSE DICHOTOMY
     A. Exclusionary Rights in Patents
     B. Compulsory Licenses in Patents
     C. Problems with the Right To Exclude
        1. Patent Overlap and the Thicket
        2. An Example of Patent Overlap, Patent
           Holdup, and Royalty Stacking
        3. Patently Valid and Invalid Patents
           a. Invalid Patents and the Presumption of
              Validity
           b. Complications in Adjudicating Invalid
              Patents
        4. The Absoluteness of the Right
        5. Abusing the Right To Exclude
        6. The Problem of Weak Patents
           a. The Slow To Adapt USPTO
           b. One Patent Equals One Invention
     D. Compulsory Licensing--A Change in
        Judicial Attitude

II.  THE BALANCING FRAMEWORK
     A. A Shortened Exclusive Right
     B. Application of the Renewal of the Exclusionary
        Right
        1. Conditions for Allowing the Right To Renew
        2. Forward-Looking/Backward-Looking
           Implementation
     C. Application of the Mandatory Licensing Period
        1. Reasonable Royalty
        2. Calculating the Mandatory License
     D. Parallel Arguments and Practices
        1. Past Arguments for Compulsory Licensing
        2. Patent Maintenance Fees

III. OUTCOME ASSESSMENTS
     A. The Patent Interest
     B. Standard of Success
     C. The Pharmaceutical Industry
        1. Perspective
        2. Effects of the Mandatory License
     D. The Patent Licensing Industry
        1. Perspective
        2. Effects of the Mandatory License

CONCLUSION

INTRODUCTION

Although the United States patent system (1) balances the interests of many parties in its enactment, the ultimate goal of the patent system is to promote progress. (2) One way that the patent system accomplishes this goal is by allowing an inventor to start from something rather than from nothing through the disclosure of previous inventions. (3) In that way, inventors can build on the foundations laid by others and add one idea to another, thereby developing a new and useful idea, which can then be used cyclically in developing another new idea. Isaac Newton recognized the benefits of foundational scientific advancement in his oft-quoted letter, "if I have seen further it is by standing on the shoulders of giants." (4) But, as this Note will explain, the exclusionary rights of patents will, at times, interfere with the ability of innovators to build on those foundations laid by others.

In order to obtain a patent for a new discovery, (5) an inventor must file a patent application with the United States Patent and Trademark Office (USPTO) that contains a full disclosure of the invention. (6) For consideration of the inventor's disclosure, (7) the government grants a patent, which gives the patentee the right to exclude others from practicing her invention for a limited time--twenty years from the date of application. (8) Progress is promoted because investors and innovators will capitalize upon the cost of invention and disclose the invention to the public because they are given an enforceable limited monopoly on the invention. The public is benefited by the inventive knowledge disclosed, the inventor is benefited by her potential remuneration, and future inventors have a backdrop of innovation from which to begin.

The changing landscape of patent technologies has exposed problems inherent in the patent right to exclude. Rather than simply granting every patent a term of twenty years, society may prefer a patent system that meritoriously awards innovation. (9) Perhaps the patent system could award the inventor of an antigravitational device (that actually works) a patent term of fifty years, but to the inventor of a bathroom stall latch a patent term of five years. Alternatively, the patent system could award patent terms based on the type of industry; for example, award microelectronic innovation a term of eight years, but mechanical innovation a term of fifteen years.

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