From Mises Blog, Nov. 2009:

Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense

November 21, 2009 by Stephan Kinsella

Defenders of patents commonly say they are against innovators’ ideas being “stolen” or “plagiarized.” This implies that patents simply permit an innovator to sue those who copy his idea. This position betrays either disingenuity or ignorance about patent law. Let me explain.

Under copyright law, someone who independently creates an original work similar to another author’s original work is not liable for copyright infringement, since the independent creation is not a reproduction of the other author’s work. Thus, for example, a copyright defendant can try to show he never had access to the other’s work, as a defense. The reason for this is that the fundamental copyright is, well, a right to copy one’s original creative work. By the nature of creative works that are subject to copyright, it is very unlikely someone would independently create the same novel, say, or painting, as another author. (And if copyright only protected literal copying, it would be much less a problem; but unfortunately it protects a bundle of rights including also the right to make “derivative works“.) But, in the rare case where author 2 independently creates a work very similar to that of author 1, it is not an infringement of author 1?s copyright, since author 2 did not copy anything.

Patent law is different. Very different. Most defenders of IP do not seem to be aware of this difference–one reason they should not be opining in favor of legal regimes they know little about. When patent defenders say that patent abolitionists are in favor of plagiarism and idea theft, they imply that patent law is like copyright law–that it simply prevents people from copying others’ ideas.

Not so. To prove copyright infringement you have to show an actual copying of the work. But to prove patent infringement, the patentee need only prove that the accused infringer makes, uses, sells, or offers to sell, or imports the patented invention–that is, a device or method that is described in at least one of the “claims” of the patent. It doesn’t matter if the infringer invented it independently. It doesn’t even matter if the infringer invented it before the patentee. Got that? Someone who previously invented the same thing and is using the idea in secret can actually be liable for infringing the patent granted to the second inventor. If a later person independently invents the same idea that was previously patented by another, this is also no defense. Prior use or independent invention are not a defense.

Obviously, it should be. The Intellectual Property and Communications Omnibus Reform Act of 1999 did add a limited first inventor (prior user) defense for prior commercial users of “business methods“–see 35 U.S.C. § 273–but not a general one. Justice obviously requires that, at the very least, a general independent inventor defense be added to the patent system. To blunt its sharp, unjust edges. In particular, a defense should be provided for those who are prior users of, or who independently invent, an invention patented by someone else. This would greatly reduce the cost of the patent system since one difficulty faced by companies is that they do not know what patents they might infringe. If someone learns of an invention from another’s patent, at least they are aware of the risk and can possibly approach the patentee for a license. But quite often a company independently comes up with various designs and processes while developing a product, which designs and processes had been previously patented by someone else. If the goal of patent law is to reward invention, it should be sufficient to permit patentees to sue people who actually learned of the idea from the patent–just as copyright infringement exists when someone reproduced another’s work but not when it is independently created. A broad prior user right defense should be established, as well as an independent inventor defense that even a later inventor could use. (Pending patent reform legislation originally proposed to broaden the existing prior user defense by eliminating the business method patent limitation so that users of all types of inventions would have been able to use the defense, but this was removed from later versions of the bill. The Council on Foreign Relations study, “Reforming the U.S. Patent System: Getting the Incentives Right,” recommends a prior-user right be adopted; James Bessen & Michael J. Meurer, Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (Princeton University Press, 2008), recommend an independent inventor defense–see the Introduction.)

Even pro-IP libertarians usually reluctantly agree that independent invention should be a defense, once you dispel their ignorance about the system they for some reason support (well, the reason is not that hard to see–it’s lingering state-indoctrination, or some form of statism such as minarchism, or some unprincipled, incoherent grounds like utilitarianism). This is one of the aspects of arguing IP policy that infuriates me. Whenever you point one of these things out to a libertarian defender of IP, he will usually say, “well, I don’t support that.” So you say, “well, what do you support?” The answer is basically, “Hey, I’m not a patent lawyer; that’s just a detail.” I.e., they are in favor of some ideal patent system; not the current, statist one (though they oppose abolishing it or weaking it!), but a “libertarian” one (as if one could imagine a patent system concocted by decentralized courts without legislative power! [on this see my Legislation and the Discovery of Law in a Free Society] ). In other words, they don’t know what in the heck they are even talking about. They can’t describe the system they favor, and are not willing to abandon a statist system they admit is unjust.

And they seem blithely unaware that removing the obvious, “problematic” features of patent law would largely gut it, resulting in an emaciated, weak patent system–a change that would be attacked by mainstream IP advocates as “harming innovation,” in the same way that these libertarian patenteers criticize us patent abolitionists. Libertarian IP advocates are schizophrenic. They shy away from the obvious injustices of patent law, and would favor reforms that most normal IP proponents would recoil in horror from; while they try to maintain the facade that they support IP because they support innovation and inventors’ “rights”, even though they cannot tell you what their ideal libertarian patent system even looks like.

Don’t believe me that providing an (obviously just) “independent inventor” defense would gut the patent system? I’ve been practicing patent law since 1993. I have lost count of the number of times I’ve been called upon by a client to analyze a patent that has come to the client’s attention, that concerns it. What typically happens is this. Company A is producing or developing a product. They hear a rumour from a customer “Hey, I think that Company B has a patent on something similar to this.” Or, they get a letter from Company B saying, “Hi, we attach a copy of our latest patent for your interest! If you want to discuss licensing, give us a call! <smiley face! we’re all friends! it’s all good! Don’t file a declaratory judgment action against us, please! We wouldn’t want to give you cause to sue us first, robbing us of the chance to choose the venue! <double-smiley-face> Love, Company B”. So Company A calls me, says, “can you take a look at this patent? Are we in trouble? Are we infringing? Is the patent valid? If so, can we change our design to get around it? We’ll be happy to pay your $30k fee for an analysis and opinion.” Such a productive use of precious capital!

Now, what I want to emphasize here is that: in all the umpteen times I’ve done this over the last 15 or so years, I have never, ever, even once, seen a case where the client’s engineers copied the patented invention. In every case that I can recall, the company designed its product on its own–using available technology, to meet the market demands–and then only later were made aware of some patent buried among millions in the bowels of the patent office. Then they panic, worrying that they might be shut down by an injunction by a competitor, or sued into the ground (for examples see my Radical Patent Reform Is Not on the Way).

No doubt in some cases there is copying. An entrepreneur espies a popular product, and makes a similar one; lo and behold, it turns out there were some patents, and so he is sued. Still unjust–what is wrong with emulation, competition, and learning?!–but still, sure, in some cases, there is copying. But there can be no doubt that millions and millions of dollars are lost on attorneys’ fees alone, not to mention the cost of changing designs to avoid infringement, or foregoing development in a field crowded with patents or rife with uncertainty, in cases where the victim was not copying or even learning anything from the company that just happens to hold a red-ribbon adorned manilla certificate issued by a technocratic bureaucracy of the criminal central state. Add an independent inventor defense, and a lot of the work done by lawyers like me would dry up–meaning a more efficient economy, lower priced goods, more competition and innovation, more innovative freedom, more breathing room.

This is a type of reform that most libertarian patent advocates, in my experience, begrudgingly agree to. And it would gut the patent system. The caterwauling of the patent bar, deprived of half their federal law-sponsored teats, would reach a deafening crescendo. Large companies that rely on the inchoate threat of patent lawsuits to squelch competition and keep small innovators down, would increase their bribes to DC, fearful of barriers to entry falling.

So why not come all the way with us, my fellow libertarians? You see the injustices of the patent system, and usually agree with our concrete criticisms of them. You are not sure of what a good patent system would even look like. The current one is undeniably a mess. And it’s just an arbitrary fake-law scheme enacted by an obviously incompetent, evil, illegitimate, and criminal state. Why in the world would a libertarian support this? Besides, by advocating such reforms you are going to be lumped in with us “enemies of innovation” by the vested IP interests. So if you are doing the time, you might as well do the crime.

Update: See Mike Masnick’s excellent posts, Calling For An Independent Invention Defense In Patents and If Patents Are Supposed To Support The Independent Inventor, Why Isn’t There An Independent Invention Defense?, the latter of which mentions a great post by Joe Mullin, Patent defendants aren’t copycats. So who’s the real inventor here?