Academic journal article Santa Clara High Technology Law Journal

Nuisance Law and the Doctrine of Equivalents in Patent Law

Academic journal article Santa Clara High Technology Law Journal

Nuisance Law and the Doctrine of Equivalents in Patent Law

Article excerpt

INTRODUCTION I.   SMITH'S THEORY: FROM NUISANCE LAW TO THE DOCTRINE OF      EQUIVALENTS      A. Smith on Nuisance: Following the Utilitarian Tradition      B. Exclusion Strategy and Governance Strategy      C. Nuisance Law and Patent Infringement as Two Hybrid Regimes II. ANOTHER INTERPRETATION OF NUISANCE AND THE DOCTRINE OF EQUIVALENTS      A. Basic Theory: Coase Theorem, Pareto Optimality, and         Kaldor-Hicks Efficiency      B. Explaining Neighboring Relations         1. General Principles         2. Nuisance Law as an Example III. EXPLAINING THE DOCTRINE OF EQUIVALENTS      A. Determining Factual Equivalency      B. Preexisting Pareto Optimality as the Defense to Infringement         1. Prior Art Bar         2. Prosecution History Estoppel and the Disclosure-Dedication            Doctrine CONCLUSION 


Professor Henry E. Smith, a prominent property law theorist, contends that the doctrine of equivalents in patent law is akin to the doctrine of nuisance in property law, on the basis of the following:

   Consistent with the exclusion strategy is today's "peripheral"    approach to patent claims, the definition of claims focuses on the    outer bounds of what is claimed as an invention, without the need    to specify the interior. The earlier central claim method, in which    the central case of the invention was specified and the boundaries    were worked out ex post is more of governance regime (in our    terms), as is its pale reflection in the doctrine of equivalents,    under which the scope of a claim can be extended beyond the literal    reading. (1) 

However, Smith's explanation is short, opaque, and difficult for readers unfamiliar with property law theory to understand. They might doubt how the doctrine of equivalents, a patent law rule regarding the right to use intangible information, could be considered similar to nuisance law, which concerns the uses of land. It is also worth asking whether the two doctrines are similar only under Smith's theoretical framework, or whether other theoretical viewpoints support their similarity. Moreover, is this similarity valuable? Can it elucidate a general understanding of the structure of property rights?

Nuisance law concerns conflicting land uses by neighboring landowners, which has long been a favorite topic of economic analysis. Nuisance disputes can be analyzed through direct cost-benefit balancing in the Hand-Posner style, (2) or Guido Calabresi's indirect "choosing the chooser" method. (3) Smith's analysis of nuisance law follows the same utilitarian tradition but takes a theoretical turn by proposing two opposing methods of delineating property rights based on the information cost theory: the exclusion strategy, which serves as the basic regime, and the governance strategy, which serves as the supplemental regime. (4)

Nuisance law can be characterized as a hybrid regime, exhibiting a transition from the exclusion strategy to the governance strategy. The mixture and transition between these two strategies in property law endows nuisance law with universal application: nuisance law can serve as a model to illuminate legal doctrines that have a hybrid nature in other areas of law. Based on the observation that patent infringement exhibits the same transition from exclusion and governance, this Article claims that the doctrine of equivalents is a type of governance regime that has been pushed toward formalism.

The theory underlying this Article is often highlighted in the law and economics, or property law literature: the Coase theorem, (5) Pareto efficiency, (6) and Kaldor-Hicks efficiency. (7) These are invoked to support the thesis that the doctrine of equivalents and nuisance law are similar, and that the affinity in principle of these two sets of legal rules can be appreciated from another theoretical context.

Part I of this Article follows the context of Smith's theory, questioning how nuisance law can be considered similar to the doctrine of equivalents and finding that both have a hybrid or transitional nature. …

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