“The” Purpose of Patent Law

It is commonly said that “the” purpose of patent law is to incentivize innovation. After all, the Constitution’s patent and copyright clause says Congress is empowered to secure “for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”–that is, to set up copyright and patent law–in order “To promote the Progress of Science and useful Arts.” It is promotion of innovation–“useful Arts”–that is “the” stated purpose of patent law, at least as stated in the Constitution. But the Patent Act seeks to accomplish this goal by granting to the inventor a limited monopoly¹ in exchange for disclosure. That is, patent law encourages disclosure of ideas by rewarding it. Thus, in Enzo Biochem, Inc. v. Gen-probe Inc.,² the CAFC wrote:

Such description is the quid pro quo of the patent system; the public must receive meaningful disclosure in exchange for being excluded from practicing the invention for a limited period of time.

Update: In fact, some argue, crankishly, that disclosure is the only purpose of patent law. Patent attorney Lawrence Ebert, for example, in What is the purpose of the patent system?, writes: Now, in your post “What is the purpose of the patent system?”, you write: “Many people try to suggest that the patent system is to reward people who create a commercialized product. It isn’t. The purpose of the patent system is to promote disclosure of inventions. Period.” (I critique Ebert’s views here; collected also in IPBiz’s Ebert: Kinsella way off on patent reform.)]

Further background on this topic can be found in Alan Devlin, “The Misunderstood Function of Disclosure in Patent Law,”³ which notes that the conventional wisdom is:

The patent system brings inventors’ obscure technological feats to the public eye. Without an intellectual property (“IP”) regime, innovators would keep their discoveries safely secured from competitors, consumers, and the general public. Society would be starved of knowledge, science would limp forward, and useful information would be stored in a clandestine fashion.

Devlin argues that:

the patent regime should primarily be construed as a tool for incentivizing the invention and commercialization of easily appropriated technology. This Article argues that disclosure should be treated merely as an ancillary feature of the patent system.

… the larger social purpose of intellectual property is to promote the invention and commercialization of easily appropriated technology …

the goals of disclosure and utilitarian incentives can and do come into tension. Given that the former goal is for most purposes illusory and disclosure follows from the fact of invention itself—independent of the patent document—disclosure must yield to utilitarian incentives when these goals conflict. …

Disclosure, far from being the unqualified goal of the patent system, serves no more than an ancillary role within the larger purpose of the patent regime. …

Effective disclosure confers great benefits, but these asserted gains mask something more fundamental. At its heart, the patent system is a solution to the problem posed by the public goods nature of innovation: that technical knowledge is both easily appropriated and distributed. Without patent protection, the inventors of such goods would be hesitant to devote precious resources to research and development. Disclosure ostensibly sits in a harmonious relationship with the incentive-to-invent rationale of the patent system, but in certain cases these goals come into conflict. Since disclosure is a bonus that follows, usually automatically, from the act of invention itself, incentivizing innovation must be the primary goal of the patent system.

… the system should promote disclosure only to the extent that it does not dilute ex ante incentives.

[See also Frank H. Easterbrook, “Intellectual Property Is Still Property,” Harv. J.L. & Pub. Pol’y 13, no. 1 (Winter 1990): 108–118, pp. 109–110: “The idea that a patent represents an exchange of protection for disclosure makes no sense, except perhaps with respect to process patents. The product itself, not the patent papers, usually discloses things. Inventors want and need patents only when disclosure is inevitable in the absence of protection. When the product can be sold without disclosure, the manufacturer can use trade secret law to protect its contribution, getting even better protection—not only perpetual, but also guarding by secrecy against infringement. Infringement is difficult to detect and penalize; why disclose anything in exchange for what is at best a limit on the duration of your returns? Lawyers use the utmost skill to draft patent applications so that they do not disclose enough to practice the invention, and the omitted details frequently are vital. Patents thus are valuable when the product itself, not the papers filed in the Patent Office, discloses the invention.”]

Now, in my view, to speak of “the purpose” of a statute is a confusion: statutes are cobbled together artificial legislative schemes, usually the result of many compromises. Congress has no “intent” or “purpose”; it’s composed of individual legislators who have their own motivations and purposes. A given legislator may have various purposes, including: rewarding special interest groups to increase the chance of campaign contributions, and so on. But we can hold a law up to its stated purpose, even if the real purposes of the legislators is different.

Update:

Ebert has a followup. My reply is below, following Ebert’s post:

— Some argue, crankishly, that disclosure is the only purpose of patent law —

Within a post related to the “purpose” of the patent system, Stephan Kinsella writes:Now, in my view, to speak of “the purpose” of a statute is a confusion: statutes are cobbled together artificial legislative schemes, usually the result of many compromises. Congress has no “intent” or “purpose”; it’s composed of individual legislators who have their own motivations and purposes. A given legislator may have various purposes, including: rewarding special interest groups to increase the chance of campaign contributions, and so on. But we can hold a law up to its stated purpose, even if the real purposes of the legislators is different.That there may be many subjective intents of legislators does not negate the presence of an objectively determinable functional analysis. The patent statute gives a right to exclude in return for disclosure. That’s it.

Innovation produces a change in the way we live. Most patents don’t yield innovation. Thus, it’s hard to see the purpose of the patent system as one which incentivizes innovation. An issued patent gives an inventor a certain status in the marketplace. Innovation comes later.

posted by Lawrence B. Ebert at 7:12 PM

My reply:

My post, which you didn’t link to, is here: http://c4sif.org/2010/12/the-purpose-of-patent-law/

You say: “That there may be many subjective intents of legislators does not negate the presence of an objectively determinable functional analysis.”

This is a bit too scientistic—taking an engineering or natural sciences approach to a normative discipline, which usually leads to error. For anyone who mistakenly thinks such arbitrary legislative decrees can have an objective or “functional” meaning, I suggest you read John Hasnas’s classic paper, The Myth of the Rule of Law.

“The patent statute gives a right to exclude in return for disclosure. That’s it.”

But the patent “statute” is not isolated. The “law” is what legal rules are enforced in society, and that is a result of the actions of the courts and the legislature, in our system. Courts recognize the incentive effect as do legislators and other policy makers, and it is a common argument in favor of the patent sytem. But I am glad you acknowledge that the patent system does not stimulate innovation:

“Innovation produces a change in the way we live. Most patents don’t yield innovation. Thus, it’s hard to see the purpose of the patent system as one which incentivizes innovation.”

That helps undercut one common argument given by pro-patent people.

So then you are left with incentivizing disclosure as the purpose of patent law. But of course it doesn’t do this very much, since most things disclosed by patent applications would have been disclosed anyway by virtue of selling products embodying the idea; and for really valuable things that can be kept as trade secrets, they are still kept as trade secrets. So we hand out these monopolies and their accompanying huge cost to the economy, in exchange for basically nothing. As Alan Devlin notes in the paper I linked to:

“To a significant degree, inventions of the kind that are appropriate for patent protection are self-revealing. Disclosure comes hand-in-hand with many patent grants. Of course, the extent to which different inventions are self-revealing surely occupies a spectrum.92 But the truth remains that, other things being equal, innovators patent inventions that they believe are vulnerable to reverse engineering. This is true even for some inventions that are not readily self-revealing. If the expected return from trade secret protection exceeds that available through the patent system, a rational inventor will adopt the former course. Thus, the concerns of many commentators that a patent system without disclosure would cause information to remain hidden indefinitely are misplaced.93

“Innovation produces a change in the way we live. Most patents don’t yield innovation. Thus, it’s hard to see the purpose of the patent system as one which incentivizes innovation.”

Update: See also Mike Masnick’s post Can We Get Rid Of The Disclosure Myth For Patents?

Update: See also Machlup & Penrose, “The Patent Controversy in the Nineteenth Century” (1950), pp 25–26 et pass.

1. See my post Are Patents “Monopolies”? [↩]
2. 296 F.3d 1316 (CAFC, 2002). [↩]
3. Harvard Journal of Law & Technology [JOLT] (Spring 2010). [↩]