Prior User Rights and Patent Reform

We IP abolitionists are often accused of not favoring or proposing incremental change–of only wanting all or nothing. Nonsense. In my article “Reducing the Cost of IP Law,” Mises Daily (Jan. 20, 2010), I outlined several paths to real patent reform. Unfortunately modern patent reform proposals include almost no significant positive change (see Patent Reform is Here! O Joy!).

One major improvement to patent law would be the inclusion of broad prior-use and independent-inventor defenses. As I noted in “Reducing the Cost of IP Law,” 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, as a defense a copyright defendant can try to show he never had access to the other’s work.

Patents, however, are different. As long as someone is an actual inventor of an invention (he did not learn about it from someone else), and the invention was not publicly known, he can obtain a patent for it. 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. Also, 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, is not a general defense. There is currently only a very limited “prior user” right (or “first inventor defense”), available to those who commercially used a “business method” before someone else patented it.

Thus, 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.

It should also be noted that most people erroneously believe that patent infringement has something to do with copying others’ ideas. This is not true (see Common Misconceptions about Plagiarism and Patents: A Call for an Independent Inventor Defense). Most patent lawsuits do not even allege that that the accused infringer copied the patentee’s claimed invention. They do not need to. It is not an element of patent infringement. The “infringer” is often not a copier at all; in a typical case, an inventor or company independently comes up with a design and then is later sued for patent infringement by some company they never heard of.

So why not add a prior user right and independent inventor defense? Unsurprisingly, those in the pocket of the patent lobby are opposed. Republican Senator Jim Sensenbrenner opposes prior user rights on the grounds that this “would discourage inventors from sharing their knowledge and reward those who “don’t contribute to the progress of scienc.” “USPTO Director David Kappos disagreed, saying the lack of prior user rights in the U.S. hurts manufacturers that set up plants inside the country. Many other countries have prior user rights, giving U.S. manufacturers incentives to open plants in those countries….”

Patent shill Gene Quinn chimes in with his typical oafish comments:

Under a strict prior user rights regime, like the House wants, those who innovated and then concealed that innovation from the public would be able to use their secret, concealed innovation as a defense to a patent infringement action. So, in other words, prior user rights rewards those who hide innovation from the public and penalizes those who disclose their innovations to the public. The entire purpose of a patent system is to disseminate information to allow others to build upon what has come before. That is how a patent system fosters innovation. A patent system that rewards trade secret rights over patent rights is an abomination.

It is true that one purpose of the patent system is to encourage disclosure (see “The” Purpose of Patent Law). But this is only meant to reward applicants for a patent by giving them a monopoly in exchange for making full disclosure of their idea; this is known as “the patent bargain”. Strikingly, however, pending patent erodes the bargain by reducing penalties to the inventor for withholding the “best mode” of the invention (see Patent Reform is Here! O Joy!). Under longstanding patent law, to receive a patent, the inventor had to disclose his invention in writing, such that someone skilled in the prior art was “enabled” to make it, and he had to disclose the “best mode”. Thus, under current patent law, a patent victim can seek to overturn the patentee’s patent on the grounds that they failed to disclose the best mode. But under pending patent “reform” legislation, the best mode defense will be eliminated. This means that an applicant can receive a patent and even if he hides the ball fails to disclose the best mode, he can still run around suing people based on his monopoly. Where is the patent bargain now?

What is perverse is that the patent shills have the chutzpah to claim that adding a prior use defense would reward those who “hide innovation from the public”–as if not lowering your knickers and showing your goodies to the public is supposed to be some federal offense. The patent bargain says that if you disclose your ideas then we give you a 17 year monopoly (though, as noted above, current “reform” proposals would give patent applicants the monopoly right even if they hide the invention’s best mode). This means that if you want to keep your invention secret, you can’t get a patent monopoly. It doesn’t mean that you are supposed to be penalized in addition to this. If I want to keep my invention secret, I don’t get a state granted patent monopoly privilege: fair enough. But why should I be subject to patent lawsuits from others who invent the same thing later? Why is that fair?

In fact, as I noted in Defensive Patent Publishing, the patent system already, perversely, encourages not only patentees to publish their secrets (in exchange for patent monopolies): it encourages companies to engage in defensive patent publishing. This is the publishing of your ideas simply to prevent someone else from later patenting it and suing you for using your own ideas. Thus, the patent law already induces innocent, non-patenting companies to reveal their secrets to the world simply to avoid the cost of patenting or of being a victim of a patent suit. And patent shills like Quinn and Sensenbrenner think that this is just fine. After all, how dare some company “conceal” their innovation “from the public”?! Why should they not be sued? Why should they not be penalized? Why, it’s not patriotic to keep secrets!

Archived comments from Mises:

Slim934 April 1, 2011 at 10:36 pm

Anti-IP Libertarian April 3, 2011 at 10:55 pm

Peter Surda April 5, 2011 at 11:17 am

ceej@y October 29, 2011 at 6:13 pm

Stephan Kinsella October 29, 2011 at 6:29 pm

It’s not “based on” anything. It’s just made-up law. What exactly are you asking?