Alex Tabarrok has a good post up arguing that patent law should provide an independent invention defense (and he cites my post Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense). Some of the commentators are right that the recently enacted AIA does now provide a broader prior user right than before, which goes some way to providing a type of independent invention defense, but not far enough (see my posts The American Invents Act and Patent Reform: The Good, the Meh, and the Ugly and Prior User Rights and Patent Reform). Tabarrok is right that there should be an independent inventor defense, but still seems to accept the confused idea that there is something wrong with imitation:

Independent invention should be a defense in a patent infringement lawsuit. An independent invention defense would allow Kelly to exclude imitators but would prevent Kelly from excluding an independent inventor such as Pat.

Imitation and emulation are what market competition is about. There is nothing wrong with competition and imitation, despite protests of IP advocates, who really have a problem with “unbridled competition.”

Tabarrok also cites a couple of useful papers: Samson Vermont’s 2006 paper Independent Invention as a Defense to Patent Infringement, and Christopher Anthony Cotropia and Mark A. Lemley’s paper “Copying in Patent Law,” which shows that in most patent lawsuits, copying is not even alleged by the plaintiff.

Defending Independent Invention

by Alex Tabarrok on February 23, 2012 at 7:35 am in Economics, Law | Permalink

In the minds of the public someone who infringes a patent is like a plagiarist or a thief–the infringer has copied someone else’s work or, even worse, stolen their intellectual property. In reality, patent infringement has very little to do with copying or theft. Here’s how I described what is probably closer to the paradigmatic case of patent infringement in Launching the Innovation Renaissance:

Two inventors, Kelly and Pat, work independently, neither aware of the other’s existence. Kelly patents first. Under the present law, if Pat wants to sell or even use his own invention, he must pay Kelly a license fee (!) even though Pat’s idea came from his own head and no other.

If independent invention were uncommon this type of case wouldn’t be important but independent invention is very common. Classic cases include Newton and Leibniz with the calculus, Alexander Graham Bell, Elisha Gray and Johann Philipp Reis with the telephone, Ohain, Campini, and Whittle with the jet engine and so on. And if independent invention  is common with great discoveries and inventions then it is surely much more common with ordinary innovations. As a result, it’s not surprising that most patent cases don’t even allege copying.

Independent invention should be a defense in a patent infringement lawsuit. An independent invention defense would allow Kelly to exclude imitators but would prevent Kelly from excluding an independent inventor such as Pat.

Inventors should not have to pay to use their own ideas! An independent invention defense is not only just, it also has good economic properties. An independent invention would create more competition. On the one hand, this does reduce the “pot of gold” incentive to create new ideas, the winner of a patent race might have to sell as a duopolist rather than a monopolist.  In this case, however, there are several reasons why we wouldn’t expect the number of ideas to fall and innovation could even rise.

First, firms today are often surprised to find that they are being sued for patent infringement. An independent-inventor defense would give inventors greater security in their ideas, thus increasing the incentive to invest. In this age of cumulative innovation often what innovators want most is the security that they can build on what they have produced already. Lawsuits and associated transaction costs would also be reduced.

Second, the type of inventions that are most likely to be independently invented are those with high value relative to their cost. Thus, an independent-invention defense would automatically tend to offer smaller rewards to low-cost innovations and larger awards to more costly innovations, this is exactly the optimal rule discussed in my paper Patent Theory versus Patent Law (pdf) but unlike the system described in that paper it does not require anyone to examine an inventor’s costs.

The patent system is supposed to be about increasing the progress of science and the useful arts but to often it ends up cudgeling the very people it is meant to protect, the independent inventors.

Addendum: Joe Mullin has a good post on copying and patent as does libertarian patent attorney Stephan Kinsella. Samson Vermont, my colleague at GMU law, has a longer paper on the independent inventor defense that discusses details of implementation.