Academic journal article Harvard Law Review

The Disclosure Function of the Patent System (or Lack Thereof)

Academic journal article Harvard Law Review

The Disclosure Function of the Patent System (or Lack Thereof)

Article excerpt

The most commonly offered economic justification for the patent system is that it preserves the incentive for inventors to create, develop, and commercialize new technologies and innovations. Economists and legal commentators often invoke a second economic rationale for the patent system, however: that it "serves to disseminate technological information, and that this accelerates the growth of productivity in the economy." (1) The courts place a great deal of emphasis on the patent system's role in disseminating information, and have crafted a number of patent law doctrines to help it accomplish that goal.

This Note examines the potential value of the patent system's disclosure function and studies the reasons why the U.S. patent system appears to be failing in its ascribed role of disseminating information. Part I summarizes how courts and commentators most often characterize the disclosure function of the patent system and how the rhetoric of "encouraging disclosure" has shaped current patent law. Part II then looks at a variety of evidence showing that the patent system largely fails at its disclosure function. In particular, it examines three assumptions commonly made by those who emphasize the disclosure function of the patent system: that the patent system encourages disclosure of information that would otherwise remain secret; that innovators read through patents looking for new ideas or technologies; and that innovators can easily sort through and find valuable information in the patent records. Section II.A explains that, because of the basic economics behind any decision to patent an invention, much of the information contained in the patent disclosures is available to the public through other channels. Section II.B shows that in response to the Federal Circuit's willful infringement rules, many U.S. companies now avoid reading patents to protect themselves against the threat of treble damages in an infringement suit. Finally, in section II.C, this Note examines three reasons that patent disclosures fail to convey useful information.

If disclosure is an important policy goal of the patent system, then the system is in desperate need of repair. Courts and policymakers responsible for crafting U.S. patent law should either address these problems, or should focus their reform efforts on reinforcing the incentives for creating, developing, and commercializing innovation. Any part of the patent system that is inconsistent with those goals should be ab-andoned.

I. THE DISCLOSURE FUNCTION OF THE PATENT SYSTEM: THEORY

According to the courts, the "twin purposes" of the patent system are "encouraging new inventions" and "adding knowledge to the public domain." (2) The former economic justification--creating financial incentives for the creation, development, and commercialization of valuable inventions--is probably the most important rationale. (3) Patents are often essential for inventions that are easier to reverse engineer and copy than to actually invent. Otherwise, competitors would quickly imitate such inventions, and these free riders would drive down prices, thereby preventing the inventor from profiting off her invention. (4) Inventors would be forced to protect themselves by skewing their innovative activity toward inventions that are difficult to reverse engineer. (5) The patent system addresses this problem by allowing inventors to prevent others from making, using, or selling their invention without authorization. (6)

An important secondary purpose of the patent system, however, is to encourage disclosure of information about new technologies and innovations. (7) To achieve this goal, federal law requires patent applicants to provide a "full" and "clear" description of their invention, including the "exact terms" of its manufacture and use. (8) Most patent applications are published eighteen months after they are filed, (9) and made available on the United States Patent and Trademark Office website (10) and various commercial databases. …

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