This week in Property: Efficient Infringement

by Dennis Crouch

This semester at Mizzou, I am teaching two first year (1L) law school classes — Property and Civil Procedure. These classes are intended as fundamental foundation courses applicable in some way to all areas of law — even patent law.  I’m planning a series of posts titled “this week in property” and “this week in civil procedure” that will tie-in what we’re learning in class and relate it to patent law.

The first case that my students read in Property is Jacque v. Steenberg Homes,  209 Wis. 2d 605 (1997).  The defendant in the case – Steenberg Homes – was delivering a mobile home to a third-party pursuant to a contract.  The problem was that the road was under 7 feet of snow.  Steenburg asked Harvey Jacque for permission to cross his field, which Jacque denied.  Steenburg then went ahead and buldozed a path across the frozen field and satisfied its contract.   The manager had instructed the movers as follows: “I don’t give [a F___] what he said, just get that home in there any way you can.” At trial, Jacque was thus easily able to prove willful trespass.  The problem came with damages.

At trial, Jacque proved about $200 in damages to the land (extra plowing time in the spring), but those damages were suffered by his tenant (Jacque’s son) and thus not awarded to Jacque.  Steenburg Homes argued that this is a case of efficient infringement. Although it was trespass, the company should only have to pay for the harm it caused.  Recognize here that the company’s only other choices at the time were to (1) breach its delivery contract; or (2) deliver in a more unsafe (and costly) manner over the alternative route.  Apart from the $200 in damage, everyone was better off (or at least not worse off) after the infringement.

Although it awarded only $1 in nominal damages, the jury also awarded $100,000 in punitive damages (no actual damages).  On appeal, the Wisconsin Supreme Court upheld the verdict – overturning a prior rule that punitive damages are only available if actual damages are awarded.

The court explained its reasoning:

[The old rule] sends the wrong message to Steenberg Homes and any others who contemplate trespassing on the land of another. It implicitly tells them that they are free to go where they please, regardless of the landowner’s wishes. As long as they cause no compensable harm, the only deterrent intentional trespassers face is the nominal damage award of $1, the modern equivalent of Merest’s halfpenny, and the possibility of a Class B forfeiture under Wis. Stat. § 943.13. We conclude that both the private landowner and society have much more than a nominal interest in excluding others from private land. Intentional trespass to land causes actual harm to the individual, regardless of whether that harm can be measured in mere dollars.

Id. The court’s reference to Merest’s halfpenny comes from an 1814 English decision Merest v. Harvey, where a jury awarded 500£ in exemplary damages (~$50,000 today) against a banker (and Member of Parliament) who joined a hunting party on the plaintiff’s land after being told no.

GIBBS CJ: I wish to know in a case where a man disregards every principle which actuates the conduct of gentlemen what is to restrain him except large damages. … Suppose a gentleman has a paved walk in his paddock before his window, and that a man intrudes and walks up and down before the window of his house, and looks in while the owner is at dinner, is the trespasser to be permitted to say “here is a halfpenny for you which is the full extent of all the mischief I have done?” Would that be a compensation? I cannot say that it would be.

Heath J: I remember a case where a jury gave 500 damages for merely knocking a man’s hat off and the Court refused a new trial. . . . It goes to prevent the practice of duelling if juries are permitted to punish insult by exemplary damages.

Merest v. Harvey, 128 Eng.Rep. 761 (C.P. 1814).  The approach in Steenburg and Merest follows the “property rule” for protecting entitlements.  The alternative approach – a liability rule – is seen in negligence and contract law. The patent system used to fit fairly squarely within the property rule schema as Blair & Cotter explained in a pre-ebay paper:

U.S. law protects patent entitlements by means of a property rule, which entitles the owner to enjoin infringing behavior, rather than by means of a liability rule, which would allow one to infringe and pay damages indefinitely.

Roger D. Blair & Thomas F. Cotter, Rethinking Patent Damages, 10 Tex. Intell. Prop. L.J. 1, 48 (2001).  20 years later, patent law has transformed into a liability rule that largely allows for an “efficient infringement” setup.  Prof. Mossof explained this in his recent article:

The result of the weakening of the ability to obtain an injunction–the backstop for all market-based negotiations of conveyances of property rights– and the further limiting of damages awarded to patent owners below market-set rates has led to an increasingly common commercial practice referred to as “efficient infringement.” This occurs when a company decides that it “economically gains from deliberately infringing [on a] patent[]” because it knows the patent owner will not receive an injunction and thus it will pay less in legal fees and in court-ordered damages than it would have paid in a license obtained from the patent owner.

Adam Mossoff, Institutional Design in Patent Law: Private Property Rights or Regulatory Entitlements, 92 S. Cal. L. Rev. 921, 939 (2019) (quoting his own prior essay). But, efficiency is good — others have written that a liability rule is the best approach even if it reduces innovation incentives — because it raises incentives to commercialize and can avoid transaction costs in the marketplace. See Ian Ayres & Paul Klemperer, Limiting Patentees’ Market Power Without Reducing Innovation Incentives: The Perverse Benefits of Uncertainty and Non-Injunctive Remedies, 97 Mich. L. Rev. 985, 987 n.2 (1999); Julie Turner, Note, The Nonmanufacturing Patent Owner: Toward a Theory of Efficient Infringement, 86 Cal. L. Rev. 179 (1998).

In this debate, the courts have largely made their statements: Real property is protected with a property rule; Patent rights are protected with a liability rule.  Any change this generation will come from the legislature.

114 thoughts on “This week in Property: Efficient Infringement

  1. 17

    The “property rule” from Jaques v. Steenberg Homes is exactly the same rule one would properly apply for patent infringement, particularly willful patent infringement. The logic is the same, with injury to the individual and to society.

    A willful trespass by a party who knows he’s trespassing. Check. The “loss of the individual’s right to exclude others from his or her property.” Check. The “right to exclude others” being “one of the most essential sticks in the bundle of rights.” Check. A “right being hollow if the legal system provides insufficient means to protect it.” Check. A “halfpenny” award being insufficient to constitute state protection of the exclusive right. Check. The need to protect against a “series of intentional trespasses.” Check. An intentional trespass being actual harm to the individual whether or not that harm can be measured in dollars. Check.

    A societal interest in preventing intentional trespass on the property. Check. A societal interest to protect the integrity of the legal system. Check. A societal need of property owners to feel confident that wrongdoers who trespass upon their land will be appropriately punished. Check. A societal need to ensure intentional trespass is not more profitable than obeying the law. Check. A societal need to address the reprehensibility of the trespasser’s conduct. Check. An societal interest to prevent “indifference and a reckless disregard for the law, and for the rights of others.” Check. Deceitful, egregious, reprehensible acts by the trespasser. Check. A societal need to “give potential trespassers reason to pause before trespassing” and to “give aggrieved landowners reason to pursue a trespass action.” Check. “Brazen conduct” the court finds “shocking.” Check.

    With no support, the article then asserts “patent law has transformed into a liability rule that largely allows for an ‘efficient infringement’ setup . . .” I disagree. The Constitution has not transformed and still requires Congress act “by securing” the “exclusive right” “to inventors.”

    35 U.S.C. 154, which also has not “transformed,” states, “Every patent shall contain a . . . grant to the patentee . . . of the right to exclude others . . .” The words “securing” and “the exclusive right” cannot be read out of the Constitution to substitute a compulsory license and cannot be rendered surplusage without effect, especially when the words “the exclusive right” from the Constitution are tracked by the corresponding statutory language “every patent” and “the right to exclude others.” Marbury v. Madison, 1 Cranch 137, 174 (1803) (“It cannot be presumed that any clause in the constitution is intended to be without effect”).

    The Constitution did not change. Statute did not change. Only courts changed, and even so not as much as one would think. In eBay, SCOTUS said to apply the four prong test for injunction. Again, SCOTUS made clear in eBay that “some patent holders, such as . . . self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test [for injunction], and we see no basis for categorically denying them the opportunity to do so.” eBay, 547 U.S. at 393.

    Thus, there is NO CATEGORICAL RULE FROM EBAY that injunctions are not to be granted. Lower courts are mis-applying eBay the same way they mis-apply Alice. The irreparable harm prong can still be met where there is only an affront to the “right to exclude” because inventors “might reasonably prefer to license their patents.”

    Dennis argues that the courts’ conduct – a growing mis-application of eBay – “allows for an ‘efficient infringement’ setup.” Again, not correct, unless the contention is that the mis-application of eBay results in “efficient infringement,” not that the courts should allow it. No court wants or invites patent infringement, at least publicly, much less willful infringement or egregious business conduct.

    The “APPLE FULL-PENNY” is the modern “MEREST HALFPENNY”

    Apple is an “efficient infringer.” Willful patent infringement is part of its business model. In VirnetX v. Apple, for example, Apple’s damages “expert” valued its patent infringement at ONE PENNY per device. Like Merest, Apple said “here is a [FULL-PENNY] for you which is the full extent of all the mischief” I have done by willful infringement. The jury rejected that contention, finding Apple was off by a factor of 120. The jury-determined royalty was $1.20 per unit. The Fed Cir affirmed, and SCOTUS will soon rightly deny cert by Apple.

    While efficiency of implementation might be desirable – moving new technologies into implementations available to consumers, if an inventor determines a particular firm is most capable of so doing and therefore voluntarily elects not to enforce his right to exclude – it shouldn’t be confused or conflated with efficiency of infringement. “Efficient infringement” is much more than infringement without fear of injunction. Rather, it is far more damaging, especially when evaluated in light of both the individual “right to exclude” and the societal concerns addressed in Jacque.

    It is ironic that some of the best “property rule” quotes come in cases where Apple was asserting its own patents. “Injunctions are vital to this system.” Apple v. Samsung, 801 F.3d at 1365. That one sentence is opposite the conclusion that patents are somehow best viewed under a “liability rule” rather than a “property rule.”

    The “right to maintain exclusivity” over one’s property is “a hallmark and crucial guarantee of patent rights deriving from the Constitution itself.” Apple v. Samsung, 801 F.3d at 1365.

    In other news, Amazon’s Jeff Bezos personally made another $13.2 B yesterday alone, while Amazon can’t be bothered to pay when they knowingly infringe patents. That efficient infringement exists, concentrating this level of wealth in the most anti-competitive, badly behaving companies brings shame on the whole system.

    link to msn.com

    But I do agree with Dennis that legislation can help remind courts that a patent is a property right, since they seem to ignore 35 USC 261: “patents shall have the attributes of personal property.”

  2. 16

    Dennis thank you for this—it’s thoughtful and contributes to a deeper understanding of the system.

  3. 15

    At the end of the day, there is a huge difference between running after someone and saying you owe me royalties as opposed to saying you aren’t allowed to use my invention. There is a difference in kind. One makes people feel like a baby demanding some compensation. The other makes the person feel like they own what they invented and people can only use it with their permission.

    1. 15.1

      In the real property case, the biggest thing is the violation. Maybe there was a need for the delivery, but it was an economic one and not a life threatening one. Sure you can tie-down in my dock to save your lives. But doesn’t mean you can tie-down on my dock whenever it saves you money.

      The violation is huge in the sense that at that point you never know when someone will feel the need for the next violation of your property.

    2. 15.2

      As hypo, would the efficient infringers think it is OK for ships to dock on a private dock despite the objections of the owner of the dock because the private dock cuts down on the ground shipping to town?

      1. 15.2.1

        As hypo, owner of the dock would be pilloried for “stopping innovation” and so unfairly wanting to control their own property.

        Of course, the entire point of trying to muddy the waters and MOVE the consideration from a property rule to a liability rule is expressly so that any notion of property (and sanctity thereof) may be removed from consideration.

  4. 14

    A quick thought (not necessarily worth any more than you paid for it): real property is both a means to an end, and an end in itself. By contrast, intellectual property is only a means to an end.

    That is to say, we structure society to take regard of private property rights in real estate for (at least) two reasons. First, we know that people invest more effort in making their real property socially useful when they are permitted to internalize the gains that flow from such effort (consider, e.g., the Mayflower collective).

    However, even setting aside such monetary considerations, we also structure our society to accord private rights in real property for a second reason that has nothing to do with money. That is the point at issue in the Merest halfpenny thought experiment above. The man trespassing on his neighbor’s paved walkway has done no insult to any productive use of the land, but still we consider his trespass an invasion of the owners’ reasonable expectation of privacy. The trespass is an insult to that privacy even if no financial damage is done, which illustrates that the private property right in the real estate is a good in itself, quite regardless of any instrumental goods that come from recognizing and enforcing the private property right.

    Moreover, the private property right pre-exists the modern state. Precisely because humans instinctively value the sense of privacy and security that comes with distinct personal/familial/clan (etc) ownership of a distinct parcel of land, social mechanisms existed to enforce such ownership even before there were governments to promulgate and enforce laws. When governments (and later nation-states) showed up on the scene, they merely took up in enforcing such pre-existing laws and norms. Governments did not need to invent such laws and norms anew, out of (as it were) “whole cloth.”

    By contrast, the intellectual property right is purely instrumental. Unlike private rights in real estate (which can and did exist previous to the development of governments and states), intellectual property rights do not exist without a state (and a fairly sophisticated one at that) to promulgate and enforce them. States choose to promulgate and enforce IP rights—not out of a recognition of the pre-existence and social necessity of such rights—but because the promulgation of IP rights advances some other social good that the government wants to cultivate (technological innovation, artistic creation, consumer welfare, etc).

    In other words, intellectual property is only partially analogous to real property. Real property is both an instrumental good, and a good in itself. IP is only an instrumental good. Therefore, the choice of whether to apply the property rule or the liability rule to “trespasses” against IP should turn on the question of which rule will best advance the ends that IP is meant to advance. There is no “moral” answer to this question. It is purely an instrumental matter.

    Two more brief thoughts on that last question (which rule, property rule or liability rule will best serve the ends that IP is intended to advance?):

    (1) There is no reason in principle why the answer to this question should be the same for all sorts of IP. It is entirely possible that (e.g.) the most socially useful outcome for patents come with the property rule, but that the most socially useful outcome for trademarks come with the liability rule (or vice versa). Indeed, there is no reason in principle that the answer to this question should be the same across an entire category of IP. It is, in other words, possible that (e.g.) the most socially useful outcome for drug patents comes with the property rule, but that the most socially useful outcome for farm equipment patents comes with the liability rule (or vice versa).

    (2) My intuition is that the property rule is the best rule for patents, but this is not a thoroughly thought-out opinion. My instincts are based here on: (1) the property rule is what we have used historically, and the historical results are pretty good in this area; and (2) judges do not know enough about the dynamics of the industries concerned to make accurate determinations about the value of liability. I could well be wrong about either or both of those points, however, and would welcome others’ thoughts.

    1. 14.1

      The negative right nature of the patent property speaks opposite of your feelings, Greg.

      1. 14.1.1

        … you need to go back to basics and review the nature of an inchoate right (think: Locke).

    2. 14.2

      Interesting Greg.

      I think there is a moral dimension to property that underlies the purposes of our property laws, be them real property, intellectual, or personal, such that the laws and remedies for their infringement should be based on the underlying morality rather than a particular legal mode.

      But morality is not universal. In a communist system, your very life is owned by the state, so the fruits of your enterprise, be them physical or intellectual, also belong to the state.

      Yet even in those systems, the essence of the instinctive moral case for property undermines their legitimacy.

      The expenditure of energy by persons is morally equal to the expenditure of person’s life force. Time is life, and time is money. That means, in its way, money is life. When a person uses their life energy to improve a plot of land, or a hunk or metal, or a set of ideas, some of their lives are tied into those items.

      We reject murder as a legitimate act because it’s the theft of life. We reject rape as a legitimate act because it’s an act of trespass. We likewise must reject the theft of improved items on the same grounds.

      Human beings can overcome the law of nature: eat or be eaten. That’s the ultimate purpose of civilization. Totalitarian states are thieves of life, and are not civilized. Legitimate states protect life and property, because the line between them is narrow.

      1. 14.2.1

        To co-opt NW’s sentiment,

        “ I’ve never had such a sense of agreement with you” Marty.

        1. 14.2.1.1

          +1

        2. 14.2.1.2

          One of the big games that are played too is the old independent invention game. But the reality is that when the information of how to make an invention is made public that it works it way very quickly through the information chains and in many ways.

          People may think they independently invented it, but likely they did not. It is highly likely that the indirectly copied the invention and were not aware of it.

          1. 14.2.1.2.1

            That is confusing public knowledge of inventions that have already made it into successful commercial products versus the vast majority of patents which do not. Few new products [almost none in electronics] are launched with a costly and unreliable infringement search of every claim of every patent [out of the millions that have been published in the past 20 years] that could possibly have claims broad enough to be of concern.

            1. 14.2.1.2.1.1

              That is not my experience Paul. I have a product manager for electronic products and I’ve done freedom to operate opinions for large corporations in M&A.

              The fact is that it is not hard to figure out the claims that might be problematic for a new product.

              The fact is that what happens is people are free to share the invention because of patent applications. The invention is shared in journals, online, at conferences, etc. And I can’t tell you the number of times I’ve had to tell engineers that what they did was unconscious copying, so we can’t file an application.

              1. 14.2.1.2.1.1.1

                Rather unsurprising, Paul’s comments sound (yet again) in the Efficient Infringer mantras.

                It’s more than obvious that it has been a very long time since Paul was in prosecution or worked to protect an innovator.

              2. 14.2.1.2.1.1.2

                If patent freedom to operate or infringement studies were that easy or reliable, why is it that such a high percentage of patent suits that are filed against commercial product are decided on a non-infringement basis?

                1. Paul,

                  You are suffering from selection bias as only the closer cases proceed to the point from which you want to draw your point.

                  Yet again, you ‘fight’ for a position that aligns with Efficient Infringers and against those that have sought innovation protection.

                  Do you ever pause and think through your positions?

                2. anon basically right. And it isn’t that they are that reliable as much as it is not as hard to perform a free-to-operate search as people like Lemley claim. In fact it keeps getting easier and easier. And it isn’t that hard to figure out that really broad claims that you might come under and then assess the risk.

                  Moreover, it is getting easier and easier to do prior art searches and there is more and more references out there. With some being outstanding. There are things like master’s theses in Germany that do an excellent job of summarizing the prior art.

                  The fact is that all the claims of things being broken are false.

                  Go back to TSM and patent quality will double overnight.

                3. Bright line tests remove the judicial fingers in the wax nose of 101 — something the power-addicted Court cannot dream to do.

          2. 14.2.1.2.2

            Do you have any basis for your contention that “when the information of how to make an invention is made public that it works it way very quickly through the information chains and in many ways.” I acknowledge that I don’t have any data to back this up, but it is logical to assume that the spread of information is correlated with the magnitude and manner of its publicity. Unless people regularly read patent publications to learn about new technology, it is plausible that its disclosure doesn’t spread quickly, if at all, in the absence of other means of disclosure. Thus, one cannot summarily dismiss independent invention, especially if the accused product is very different from the disclosed embodiments.

            1. 14.2.1.2.2.1

              NS II: Thank you for both of your comments. Yes, valid actual data on how much technology only contained in patent publications inspires actual commercial products of others [which requires vastly more capital] would be a very useful project for some economist.
              As for independent invention, that is what has occurred in thousands of patent interferences over the years. Only a very small percentage of which have even asserted derivation of the invention from the other party. Since the AIA limited invention contests to derivations not a single case of derivation has been proven. And these are only the independent invention cases in which both parties had filed patent applications, so logically there should be many more.

              1. 14.2.1.2.2.1.1

                In a derivation proceeding, one must show prior invention, disclosure AND show that the first filer obtained the invention from the prior disclosure. Independent invention would not necessarily lead to a successful derivation. Therefore, the significance of the failures depends on why they failed. Moreover, I don’t think we can assume that all instances of independent invention would have resulted in an interference pre-AIA. Arguably, patents that are invalidated due to prior art are the result of independent invention by the named inventors.

                In the absence of actual data, I think that one should not make policy in reliance on assumptions as fact. While there is no way to obtain concrete data on inspiration via information from patent publications, one could make inferences based on who reads patent publications and under what circumstances. If patents are primarily consulted for purposes of patent prosecution or litigation, this suggests that their primary utility is legal in nature. However, if they are consulted for research purposes, this would suggest that they have independent social value.

                1. ? NSII I think you are misreading what I said and confusing all the prior normal interferences with the very small subset of derivations. Also missing the last point I made – that interferences comprise “only the independent invention cases in which both parties had filed patent applications, so logically there should be many more.”

            2. 14.2.1.2.2.2

              Thus, one cannot summarily dismiss independent invention,

              Are you an attorney, NS II?

              Serious question.

    3. 14.3

      I think you have touched on the problem with “analogical myopia”. People have gotten so carried away with the analogy between patent rights and real property rights that they have forgotten that this is just an analogy.

      In any case, in my view, the property rule only makes the most sense when the patentee is actually practicing the patent. Arguably, the social benefits from patents come from the investment in research that resulted in the patent and from the investment in development that resulted in a patented product. Under a property rule, the only benefit from an unpracticed patent is the value, if any, of the patent’s disclosure. There is a reason to encourage review of patents before developing a new product, which is to avoid independent parties from reinventing the wheel as opposed to focusing on the invention of better wheels. However, at some point, somebody should be in the business of making wheels.

      1. 14.3.1

        in my view, the property rule only makes the most sense when the patentee is actually practicing the patent.

        Another example of someone who should not be making patent law comments (as evidenced by the fact that this person is missing the foundational understanding of patents as a negative right).

        1. 14.3.1.1

          Is it really a negative right? The law seems to disagree with you.

          1. 14.3.1.1.1

            The law very much agrees with me.

            Again – are you even an attorney?

  5. 13

    The appeals court here upheld an award of $1 in nominal damages and $100,000 in punitive damages?! It is worth noting that this case was decided well before the Supreme Court’s landmark decision in Campbell and other later cases generally limiting punitive damages awards to a single digit multiplier of the awarded actual damages.

    Here the multiple was 100,000:1, which was outrageous even during the runaway damages landscape when the case was decided, and considering the one-time nature of the trespass. The circumstances don’t show reprehensibility. So in this case, today, no way the court could have entered such an award or even a small fraction of the punitive damages award.

    So in a way, the more recent Due Process limits on punitive damages may create an incentive for efficient trespass in cases like this where the actual damage to the property owner are small.

    1. 13.1

      I would think that any such limit as ‘single multiplier’ would be some sort of ‘due process’ violation against what the punitive damages are meant to be: punitive.

      To me, punitive damages are one case in which the nature of the actor being punished should be taken into consideration. Multipliers cannot be constrained for the very conclusion that you reach: the rational actor — even with punitive damages added — would still engage in the activity being punished.

      Punishment must be at a level that actually creates the effect of, well, punishment.

    2. 13.2

      … I have to wonder if Paul deals with Corps that forbid their engineers from even looking at patents and patent publications (I have had clients like that).

      1. 13.2.1

        Thank you anon, for independently confirming my point that many companies do not, and in fact carefully avoid, copying ideas from patents of others.

        1. 13.2.1.1

          No Paul, that is not the point of my post.

          The point instead was for plausible deniability.

          Plausible deniability that flies in the face (and is a slap in the face) for why we have a patent system in the first place.

          This is NOT about “being careful not to copy.”

          At all.

          One may be fully aware and not copy.

          This defeats the very reason and essence of the Quid Pro Quo.

          Such purposeful — and quite literally — blindness is merely self-serving CYA.

          1. 13.2.1.1.1

            By the way, the better business reaction is to WANT to be aware of — and then to leapfrog — the competitor’s position (or possibly encircle (or box in) the competitor’s position.

            It is one of the lowest levels of response to “shut your eyes” (given as we have recently discussed, Infringement being a strict liability offense).

            Maybe you should refresh your understanding of how innovation is desired to advance…

  6. 12

    link to issuesinsights.com

    Apparently these google dudes have no use for IP (Not when you have a network effect advertising monopoly!!).

    Wonder when these top investigative reports are going to link the google money stuff exercise (aka lobbying) with the 98-2 passage of the AIA and the King’s Privy Court?

    1. 12.1

      Great link iwasthere. People don’t get this. Google is making money from the IP by making it all available through their advertising. This has been the prime driver of the stri pping of IP rights from Americans.

  7. 11

    Professor (or others that know the answer) – what is the procedure for correcting a statute when a Supreme Court decision modifies or overrides the statute? There is a pretty clear conflict between 35 U.S.C. §154 and the eBay decision. The meaning of the “right to exclude” has been fundamentally altered by the Supreme Court. An inventor or entrepreneur who reads the statute or the USPTO website would get incorrect information. If he consults an attorney or patent agent, would it be the responsibility of the attorney/agent to explain that the statute and USPTO website (along with most blogs and law journals) are incorrect? What about the USPTO? The statute requires issuance of a grant of the right to exclude, but SCOTUS has ruled otherwise. Also, should the agency obey SCOTUS or Congress? Should they add an asterisk to the patent? Who is liable for misleading applicants and what is the mechanism for resolving the discrepancy?

    1. 11.1

      Please Pardon Potential rePeat (due to Count Filter):

      See post 8.1.1.1.

    2. 11.2

      [W]hat is the procedure for correcting a statute when a Supreme Court decision modifies or overrides the statute?

      In this case, I think that the only workable procedure is for the Congress to amend the judiciary act to take questions related to Title 35 out of the SCotUS’ jurisdiction. In regard to the particular question that you asked, Congress should also add a judicial presumption of irreparable harm and insufficient remedy at law to §154 (i.e., the patentee is assumed to be irreparably harmed absent an injunction, and assumed not to be adequately made whole by monetary damages, such that it would require that the one opposing an injunction prove that monetary damages are good enough). If Congress does no more than amend §154, however, then the SCotUS will surely find a way around that (just as they have found a way to smuggle the old “invention” requirement past the 1952 codification of requirements for patentability).

      1. 11.2.1

        I’ve never had such a sense of agreement with you Greg.

    3. 11.3

      The Constitution requires Congress act “by securing” the “exclusive right” “to inventors.” “Injunctions are vital to this system.” Apple v. Samsung, 801 F.3d at 1365.

      The Supreme Court made clear in eBay that “some patent holders, such as . . . self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test [for injunction], and we see no basis for categorically denying them the opportunity to do so.” eBay, 547 U.S. at 393. Thus, there is NO CATEGORICAL RULE FROM EBAY that injunctions are not to be granted. Lower courts are mis-applying eBay the same way they mis-apply Alice.

      Congress derives its plenary authority over patent policy from Article 1, Section 8, empowering Congress “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

      35 U.S.C. 154 states, “Every patent shall contain a . . . grant to the patentee . . . of the right to exclude others . . .” The words “securing” and “the exclusive right” cannot be read out of the Constitution to substitute a compulsory license and cannot be rendered surplusage without effect, especially when the words “the exclusive right” from the Constitution are tracked by the corresponding statutory language “every patent” and “the right to exclude others.” Marbury v. Madison, 1 Cranch 137, 174 (1803) (“It cannot be presumed that any clause in the constitution is intended to be without effect”).

      35 U.S.C. 283 states, “The several courts having jurisdiction of cases under this title MAY grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” The permissive “may” does not provide any public interest in allowing patent infringement and does not and cannot function to excise the words “securing” and “the exclusive right” from the Constitution nor the words “Every patent shall contain a . . . grant to the patentee . . . of the right to exclude others” from 35 U.S.C. 154.

      The “right to maintain exclusivity” over one’s property is “a hallmark and crucial guarantee of patent rights deriving from the Constitution itself.” Apple v. Samsung, 801 F.3d at 1365.

      1. 11.3.1

        “Lower courts are mis-applying eBay the same way they mis-apply Alice.”

        Bingo.

        Jurisimprudence.

      2. 11.3.2

        I have to disagree — to the extent that to put focus ONLY on the lower courts misses just who is parading around without clothes.

        Just look at the couched terms that the Supreme Court uses: some (and followed with a small subset); might; may; categorically denying them (the small subset — thereby with implication that other subsets MAY be categorically denied).

        As I have pointed out, it is the Supreme Court that has misapplied (with incorrect application of principles of equity — both undervaluing direct patent aspects and over-emphasizing a “this is harshest form of equity” views).

        The Court is on borrowed authority from the Legislative Branch. Any time one branch acts in borrowed authority from another branch, strict adherence to the terms of the borrowed authority must be adhered to.

        For some reason that I find absolutely mind-boggling, people seem terrified to suggest that the Supreme Court has acted improperly.

        As attorneys (as I have noted with most all State attorney oaths), we have a duty NOT to the Supreme Court, but to the Constitution under which ALL three branches of the government operate under. Our system of government is NOT two branches under the Constitution and a third to the side, ‘Supreme’ above the Constitution.

    4. 11.4

      If the Supreme Court is misinterpreting a federal law, the solution for Congress is to amend the law. The decision in Deepsouth was abrogated this way. That being said, why do you think that 35 U.S.C. §154 is operative in terms of defining patent rights? The fact that patents must include a statement, doesn’t make the statement operative or even true. Moreover, there is nothing in §154 that recites the existence of an unconditional “right to exclude”. Although an injunction is extremely difficult to obtain, it is still possible. In any case, I don’t see how one can argue that §154 grants rights beyond those granted in §283.

      1. 11.4.1

        35 USC 154 also specifies the patent’s term. The term refers back to the “exclusive right” of 154(a)(1) by saying “such grant shall be for a term.” Where in statute do you find a “term” being defined as the duration of an injunction, or the duration of a compulsory license?

        1. 11.4.1.1

          Still waiting for an answer to this question . . .

          1. 11.4.1.1.1

            The portion with “right to exclude” is the portion that discusses the contents of a patent. 35 U.S.C. §154(a)(1) (“Contents”) (“Every patent shall contain a short title of the invention and…”) Given that a “short title” is definitely not a right, this “grant” seems to be more of a formal requirement. However, to the extent that the document itself is a grant, it does not include an enforcement mechanism. In contrast, §281 defines the actual right associated with a patent, which is the right to a “remedy by civil action for infringement of his patent.”

            1. 11.4.1.1.1.1

              Yeah, a civil action to enforce the “exclusive right.”

              But you still didn’t answer my question: Where in statute do you find a “term” being defined as the duration of an injunction, or the duration of a compulsory license?

              The “term” of 154(a)(2) clearly relates to the “exclusive right” of 154(a)(1), and no one is making the argument that the “term” is just some unimportant or meaningless “formal requirement” to be ignored, as you argue the “exclusive right” language must be “not operative.”

              1. 11.4.1.1.1.1.1

                Look as well as to the actual language with which Congress provides the lending of its authority TO the judicial branch (emphasis added):

                35 U.S.C. 283 Injunction.

                The several courts having jurisdiction of cases under this title may grant injunctions…

                in accordance with the principles of equity

                … to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.

                Note that the proper reading of this sharing of power it to the SOLE effect of preventing violation of the rights secured by patent.

                As I have noted, the Court (and courts) have misconstrued the allocation of shared authority and have BOTH forgotten the very principles of equity at play AND have elevated “injunction” as a type of remedy “too severe” — in a seemingly bow to “rights” of infringers (nowhere mentioned in the granted sharing of power).

      2. 11.4.2

        The fact that patents must include a statement, doesn’t make the statement operative or even true.

        See post at 11.3 vis a vis ‘surplusage.’

        Once again, NS II, you oddly choose to speak up against a correct (and strong) patent position.

        It’s as if you are blind to why having a strong patent system is a benefit, or why we even bother to have a patent system in the first place.

        1. 11.4.2.1

          NS II also played the strawman game of reducing all of the arguments presented to only one presented and probably misstated. Typical of NS II.

  8. 10

    Real Property question — could there be a temporary easement by necessity?

    1. 10.1

      From “uslegal:”

      An easement by necessity is an easement implied by law under certain circumstances. … An easement by necessity may be implied by law where an owner of land splits his property so that one of the resulting parcels is landlocked except for access across the other parcel.

      For Real Property, the condition you inquire upon has reflection to the nature of the property right.

      This is where the distinction of a patent property being a negative right (as opposed to being any positive right ‘to practice’) will differentiate possible applications of the concept.

      Remember that an improvement patent (your putative land-locked parcel) does NOT have positive right attributes (your putative need for access).

      1. 10.1.1

        Excellent point. Not only does a patent not provide a positive right to practice the patented invention, it does not provide any”easement” to infringe prior patents needed to practice the invention.

    2. 10.2

      Considering the concept of an easement further, in Steenberg Homes there was a one-time trespass, not a continuing one. A continuing trespass would have been equivalent of a permanent easement on the Jacque land. The Supreme Court in Kelo recognized, “[I]t has long been accepted that the sovereign may not take the property of A for the sole purpose of transferring it to another private party B, even though A is paid just compensation.” See, Kelo v. City of New London, 545 U.S. 469 (2005). Had Steenberg Homes tried to force an easement upon Jaque’s land, they surely would not have succeeded.

      The Takings Clause of the Fifth Amendment states that private property shall not “be taken for public use, without just compensation.” The Supreme Court said in Oil States, “our decision should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.” Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct. 1365, 1379 (2018).

      1. 10.2.1

        If one switches to a “liability” basis (from a property basis), Takings law also subtly shifts.

        Sticks in the bundle of property rights no longer carry the same weight, the same gravity of offense of violation (and thus, the equitable treatment of the offense subtly differs and the judicial legislating from the bench gains power)

        These legal notions are intertwined. And this is why my (directly on point) posts have NOT been treated with any sense of inte11ectual honesty from anti-patentists.

  9. 9

    “efficiency is good”

    Efficiency may be quick, cheap, and easy but the consequences of the quick, cheap, and easy way are not necessarily good.

    Leaving aside the notion that rights as such are good, even if we only take the “goodies” which are “accessible” to the public consumer as constituting “the good”, then innovation and invention are good. Because, if the products of the mental work of innovators is a public good… then by the law of causality the act of creation, the expenditure of the mental labor which makes all those goodies possible, is good.

    Specifically, here are cases where the “goodies” have already been created, already brought down to earth by those who have toiled, in order to exchange with all of society to its benefit. The so called efficient infringer has not created anything for the public, but instead undercuts the inventor’s effort and voluntary relationship with the public, by taking what the infringer did not create and passing it off as his own to sell.

    The end result is a devaluation of the goodies and the creator’s effective rights to the creation and when government acts in a manner sympathetic to the infringer’s acts, creator’s rights, as such, are diminished: all take, at a discount, the value created by the innovator, and the infringer profits in purveying this discount for something which he did not create.

    The act of going up the mountain to obtain the boon for the village has not changed in its complexity or scarcity nor in the time, money, effort, and talent it requires. For that transaction between the inventor and reality, whereby the inventor wrests from places others dare not or cannot go, the innovations which make all those goodies for the public possible, has not changed one bit by the infringer’s action in the village or the authorities permission of it. The transaction costs for the act of creation are not changed but the recognition and remuneration, the incentive for them has been reduced.

    The devaluation of the acts and products of creation from protection under a property rule to protection under a liability rule means a devaluation of the root cause of all the goods, the act of creation itself. Necessarily, in a democracy in which the act of creation is a voluntary pursuit of free individuals, taken in their pursuit of happiness and in the furthering of their values, when that act of creation is devalued the frequency, likelihood, and earnestness of its pursuit by everyone is diminished, and as the root of all the goodies, the quantity and quality of all those goodies, and hence the overall public good too is diminished.

    The result is “greater” access to fewer options, lower quality, a mediocre market of less innovation, albeit at discounted prices… so called “efficiency”… it might be quick, cheap, and easy… but it isn’t good.

    1. 9.1

      Bravo.

    2. 9.2

      Well said.

    3. 9.3

      “the expenditure of the mental labor which makes all those goodies possible” “undercuts the inventor’s effort… by taking what the infringer did not create and passing it off as his own to sell. ” You are assuming that the alleged infringer took advantage the inventor’s mental labor, presumably by reading some disclosure of the invention (e.g., the patent’s specification). However, if the alleged infringer did not take advantage of the inventor’s disclosure, the “goodies” (goods or services) were not made possible by the inventor. Of course, there is no way to know for sure whether a patent publication actually provided a public benefit, but there is also on reason to presume it.

      Are you contending that there is an affirmative duty to conduct a clearance opinion before engaging in commercial activity? If so, the patent grant might actually be harmful in so far as “goodies” may be provided despite the patent grant and not because of it.

      1. 9.3.1

        You do realize that actual direct copying is NOT a part of the infringement analysis (and parallels the strict liability nature of trespass), eh NS II?

        Or is your focus only on how patent rights may be constrained?

        1. 9.3.1.1

          Of course, note that the $100k punitive damages in the real property case were based upon the willfulness of the trespass and the recognition that the action was also a crime.

          1. 9.3.1.1.1

            I would but quickly point out that willfulness as a multiplier is quite distinct from the underlying nature of strict liability in the first instance.

            1. 9.3.1.1.1.1

              Yes, patent infringement is strict liability in the sense that many infringers who have independently invented, developed and provided their product to the public can still be sued for infringing a patent owned by anyone else. However, enhanced damages for willfulness can be and are granted fairly frequently for the continued infringement and/or litigation misconduct of that defendant once put on notice of the infringement.

    4. 9.4

      I stopped reading at: “The so called efficient infringer has not created anything for the public”. I bet you also believe that inventor excrement tastes like strawberrys.

      1. 9.4.1

        Of course you did.

        And that is one reason why your posts have the level** of respect that they do.

        ** and that’s not a good thing for you.

        How are you even remotely involved in any innovation protection process?

    5. 9.5

      I do not care much about inventions. I appreciate when an invention is made commercially available. So personally, I would reward an entrepreneur for testing that the invention is safe, and for buying the equipment to make it. The inventor can have a monetary patent award and a plaque, and that could be a sufficient compensation.

      1. 9.5.1

        My friend PiKa,

        I implore you to deepen your understanding of innovation and innovation protection so that you better understand just why the patent right is a negative right rather than the positive right that you now prefer.

        1. 9.5.1.1

          Anon,
          Property permits a market. When the market works well, it allocate limited resources where they have the most value. I can understand that capital is a resource, that commercializing different invention can bring different levels of benefit, and therefore a market can be an adequate way to allocate capital to the commercialization of the most useful inventions.
          But I do not see what a market could bring to the generation of new ideas.

          1. 9.5.1.1.1

            Your very first sentence shows a lack of awareness and appreciation of the negative right nature of the property of the patent.

            Again, you wish you to educate yourself on that which you wish to have feelings about before you express yourself.

            I note that as I recall, you generally try to be reasonable, so I don’t want to be too harsh, but you really are missing some very fundamental concepts here.

            1. 9.5.1.1.1.1

              … [again I wish you to]…

      2. 9.5.2

        “I do not care much about inventions.”

        We should respect both invention and implementation. Acting like either has no value is foolish.

        1. 9.5.2.1

          Ben, inventions and implementations simply have different values. Because they do not involve the same amount of capital or risk, they can be incentivized in different ways.

        2. 9.5.2.2

          Ben,

          Certainly, no one doubts that implementation has value. Innovation research verifies that often, the acts involved in implementation provide follow-on insights of extreme value (and one reason why the US has suffered with outsourcing of basic manufacturing — the point at which implementation so often is seen).

          However, the point here is NOT about just any old ‘implementation.’

          ANY implementation of someone else’s rightfully exclusive right cannot (and must not) be allowed to have the Ends of any such value overshadow the Means of violating what an innovator has shared vis a vis the Quid Pro Quo of the patent exchange.

          You seem to want to ignore the very thing that is at the heart of the system that you purportedly are involved in.

  10. 8

    There are a few of important issues here.
    1) Is that for a liability rule the question is how much does it cost to receive compensation? Now that number is in the millions from a large corporation. So any compensation that is say under $1 million may not be recoverable.

    2) The time factor. With technology taking the invention and moving forward may give the infringer a huge advantage that is not easily quantified and may not be recognized by the market.

    3) The liability rule encourages infringement and then for the infringer to file IPRs to fight off paying for the infringement whereas a property rule would require more speculative fight to invalidate the claims and take time.

    With all other things being equal, the liability rule may be superior, but all other tings are not equal and there are significant differences between real property and intellectual property.

    I wonder if an analogy might be that your land contained gold and the trespasser went in and mined all the gold and maybe became a huge jewelry retailer in the process. And then went into anyone’s property to get the gold they needed to continue to be the largest jewelry manufacturer (let’s say with market power.) This is probably closer to what is happening with patents.

    1. 8.1

      The other thing about this that I think Dennis should emphasize more is that all of this was done with the courts. The Patent Act is clear that you should get an injunction. The Scotus just privately legislated and decided in eBay that you don’t get an injunction except under the same circumstances as any type of dispute.

      1. 8.1.1

        For a more effective argument, don’t misquote statutes. The Patent Act does not say you “SHOULD get an injunction, it says:
        “35 U.S. Code § 283. Injunction
        The several courts having jurisdiction of cases under this title MAY grant injunctions in accordance with the principles of equity [<just as the Supremes said] to prevent the violation of any right secured by patent, on such terms as the court deems reasonable."

        1. 8.1.1.1

          Paul,

          You are correct in quoting the statute.

          What is missed here though is how the courts have misapplied those very “principles of equity” by NOT taking into account two very important principles (while elevating a general notion that just does not fit with what a patent IS).

          First: a principle of equity is to make the aggrieved as whole as possible.

          Second: the aggrieved has a property that is a NEGATIVE right.

          The misapplied notion is that “injunction” is an especially harsh remedy.

          These points MUST not only be ‘on the table,” these points are the foundation of any discussion as to the shared power of the Legislative branch to the Judicial Branch that was explicitly provided at 35 U.S.C. § 283.

          To not heed this context is only to invite trouble.

          1. 8.1.1.1.1

            As always, the Supremes get to decide what “principles of equity”means, not blog commentators, and did so in its eBay decision.

            1. 8.1.1.1.1.1

              Not so (leastwise as open ended as your comment would provide)

              Look up “I know it when I see it,” and compare to the principle of Void for Vagueness.”

              1. 8.1.1.1.1.1.1

                … also look up ‘checks and balances’ and try to remember that ALL THREE branches are under the Constitution (and not only the two branches of the Executive and Legislative with the Judicial above the Constitution.

          2. 8.1.1.1.2

            Paul and Anon are both right. The problem here is that the USPTO and law schools and attorneys continue to teach that 35 U.S.C. §154 is good law, despite being overridden by eBay.

            Every patent shall contain a short title of the invention and a grant to the patentee, his heirs or assigns, of the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States.

            The face of the patent still contains this verbage 14 years after it was rescinded by SCOTUS.

        2. 8.1.1.2

          “ [<just as the Supremes said] ”

          The Supremes ‘say’ a lot of things and then act in direct conflict with what they have said.

          Not recognizing that the score board is broken and that the Gordian Knot of eligibility jurisprudence is directly the fault of the Supremes is an error most egregious.

        3. 8.1.1.3

          OK Paul. Fair enough. But the Scotus did change the rules after many years with eBay.

          1. 8.1.1.3.1

            Night Writer,

            It is not just “change the rules,” but it is “change the rules” in a manner NOT consistent with the principles of equity (as I have noted above).

            Paul would play the game of “the Supreme Court said so” and quite misses the fact that the Supreme Court got it wrong.

            When a court (and yes, even the Supreme Court) acts outside of the bounds of the dictates of shared power as provided by Congress, that action is ultra vires.

            Insofar as ANY court decision is in error along the principles (as I have humbly pointed out), then that decision is not in accord with the judicial branch’s borrowed authority.

            1. 8.1.1.3.1.1

              eBay is not as bad as Alice, but eBay is definitely about weakening patents.

          2. 8.1.1.3.2

            Yes, it took a long time for the Supreme Court before some better attorneys filed an effective cert petition to stop the Fed. Cir. from ignoring the law on the books in both that statute § 283 and the patent suit venue statute Congress had left on the books.
            Nor can statue sections like 35 U.S.C. §154 be read completely out of context with the numerous exceptions and requirements of the rest of the patent statute.

    2. 8.2

      1) True, but wouldn’t that be a problem under a property rule as well. Moreover, doesn’t that cut both ways? An alleged infringer might license an invalid and/or non-infringed patent to avoid the costs of defense. The threat of an injunction (i.e., property rule) increases the settlement power of the Patentee, but there is no “right” way to distribute settlement power. It simply is, and is subject to revision by Congress.

      2) A “huge advantage that is not easily quantified and may not be recognized by the market” implies that the Patentee is in competition with the alleged infringer (possibly via a licensee) and that there is an inadequate remedy at law. An injunction is potentially available under those circumstances.

      3) Yes. However, one must consider the differing circumstancing surrounding a decision to infringe. If the decision to begin infringement (or investing in infringment) was made with full knowledge of the patent, the enhanced damages and potential liability for attorneys’ fees should deter potential infringers. Here, the decision by the alleged infringer was whether to infringer at all. However, if the alleged infringer is made aware of of its infringement only after investment, the decision is whether to continue infringement. Under a property rule, this alleged infringer is certainly more likely to stop infringement either voluntarily or via an injunction. However, this is not necessarily a good thing.

      “there are significant differences between real property and intellectual property.” Yes. Should they be treated the same? Different types of property are treated differently, so why should intellectual property be treated like real property as opposed to other forms of property or its own special way?

      The problem with your analogy is that patent rights are a non-depletable resource. Patent rights are more akin to restrictions on the use of the frequency spectrum. If someone was broadcasting a radio station using a certain frequency spectrum that you owned, that could develop a fan base on that frequency, which would inhibit your ability to establish your own radio station or other lawful use. Regardless of whether you intend to use that spectrum doesn’t give someone else the right to use it, but, the equities are different depending on such intent.

      1. 8.2.1

        You are SO deep into the weeds, NS II, one wonders if you understand the basics of patents at all.

        You strike me as one of those lawyers that may have litigated a patent matter or two, but you lack any experience out in the real world of doing innovation, or have a registration number and experience in protecting innovation.

  11. 7

    The main lesson from the property rule v liability rule debate is that the distinction between the two is not as hard and rigid as the theory would make out. In theory and in practice, incentives to invent and to innovate are complicated. And in theory and in practice, large damage awards can serve as a type of property rule, the lesson of Jacques. And property rules can facilitate monetary settlements (although see Bone’s article). The actual economics have more dimensions than tbe first gen law and econ (BC) suggest.

  12. 6

    Hard to belive the mobile home delivery contract did not have a force majeure clause.

    Also hard to belive the extreme costs of patent litigation relative to many instances of economic damages related to the pertinent patents are not regularly the largest driver of so-called efficient infringement.

    We have all kinds of efficient theft in the economy because ajudiciating it is simply not worth the candle, especially with the vast power accorded to the Arbitration Act.

    1. 6.1

      I am starting to understand your view on 101 Martin.

      With the red light case, would it be find to claim a method of turning on the red light to indicate to brake for a pedestrian and just not include the actual act of braking by the human?

      1. 6.1.1

        Yes Night. Turning on a light (or lets say a method that results in an item of information consumed by the machine that controls the light) should be eligible.

        A method whereby a driver hits the brakes in response to a light cannot be eligible, because the result of the method is an item of information (the status of the light) and the consumer of the information (the driver) is a human mind.

        With the Sonos sound patent: the consumers of the audio synchronization method are the speaker circuits- non humans- and the method should be eligible. It’s likely obvious (we all have faders on our car stereos and there is nothing innovative about an algo to manage a fader) but I see no 101 issue at all.

        1. 6.1.1.1

          A method whereby a driver hits the brakes in response to a light cannot be eligible,

          Once again I ask: is such a method’s eligibility dependent on whether the human act is a ‘last act’ in the method, or does the presence of a human act at any point in a method preclusive of eligibility?

          (And I do hope that you are aware that your assertion is completely untethered to the entire history of US patent law — but clearly, you just don’t care about that terrain)

          1. 6.1.1.1.1

            A method MUST have a result- see Deener

            If that result is an item of information, an act of infringement must mean consuming the information, or the method is not complete.

            If I patent a better refining process, I am not engaging with the utility of gasoline or the final device that burns it.

            1. 6.1.1.1.1.1

              Are you (intentionally) confusing result and method?

            2. 6.1.1.1.1.2

              … plus, you did not answer my question…

  13. 5

    Just to present rebuttal arguments on the other side not presented above:
    Patent infringement injunctions are still available against competitors, plus up to three times actual infringement damages are obtainable for willful infringement, as well as potential recovery of attorney fees for exceptional cases. Plus, an injunction against the only source of a product [even if only a small part of it is infringing] may have a serious public detriment,* while the only benefit for a patent owner that is not making or selling that product itself is obtaining a larger license settlement for past infringement. The injunction is of no direct benefit to such patent acquirers and even precludes downstream running royalties.
    *However, I am in favor of injunctions against makers of mass filled rubber water balloons and any environmentally littering potentially harmful or public nuisance inventions. [A joke that I think will be understood by regular comment readers here and on Gene’s blog.]

    1. 5.1

      So much spin in one post….

      First off, your counter here is not a “rebuttal,” as you offer no view that actually rebuts the property nature of patents and all that you do is parade a litany of Efficient Infringer sound bites.

      It is beyond clear that you have long ago forsaken any position in line with protecting innovation.

      Some of your tidbits defrocked:

      The patent right (and its full bundle of sticks) is not substantively dependent on the owner of the property or the attributes of that owner. By inserting the consideration of whether or not a positive right is involved (practicing entity) you corrupt the negative right nature of the property.

      With your “serious public detriment” (asterisk’d) comment, you belie a missing point that NO such ‘serious detriment’ is possible for a valid patent, as there is ALWAYS the availability of doing what was before the Quid Pro Quo exchange. You basically pre-emotion that very exchange on some sham of “well, this one is really valuable, so we will pretend that it is absolutely necessary.”

      As to ANY consideration of downstream “ even precludes downstream running royalties” — THAT is entirely the prerogative of the patent holder (and it is ENTIRELY permissible for a patent holder to not allow ANY use whatsoever). Not only do you take this decision away from the patent holder, you do so in such a dismissive and nanny-like manner as to support Efficient Infringement.

      Your viewpoints are the crux and cause of the current catastrophe of the state of innovation protection.

      1. 5.1.1

        “pre-emotion” ==> “pre-empt”

        Damm autocorrect

  14. 4

    Thanks, Prof. Crouch. I found this both interesting and useful. I hope that you will be sharing more such snippets from your teaching this semester.

    1. 4.1

      Does — or should — personal property that happens to be of the “Public Franchise” type still carry a “property rule” treatment or does the property designation have no real effect as a “liability rule treatment” would indicate?

      Tell us Greg, as you were the one stressing that the property notion was still fully intact after the Oil States case.

  15. 3

    It should not surprise anyone that as patent claims began to be used increasingly to protect abstractions rather than actual things and/or methods with tangible, physically transformative results, that the “rules” for real property would (and should) no longer be appropriate.

    Also, there is zero evidence that this change has led to less innovation, or less incentive to innovate overall. That myth should never have been taken seriously in the first place but it’s bizarre to see it trotted out in 2020.

    1. 3.1

      Given the lack of evidence that reliable patent rights promote innovation, would you agree it is time to repeal the Patent Act?

      1. 3.1.1

        Josh, that is the key issue. The anti-patent group has paid 100’s of academics to write journal articles against patents and this group has become rich and promoted for burning down the patent system.

        On the other side of it there aren’t many that stand up for the patent system so we get very few papers.

        The OBM did say back in like 2003 that there was no troll problem.

    2. 3.2

      Your opinion is noted.

      Maybe you have heard of this thing in the patent world called “Ladders of Abstraction”….? You might find it interesting that singular “objective physical structure” is pretty much NOT a standard claim format (even for inventions that ARE ‘tangible’ or ‘physically transformative’ (whatever it is that you may think those words mean).

      1. 3.2.1

        I was noting the counterfeit trademark for my stolen patents that covered ladders, mufflers and not boat fenders. And that is why I said that. It was a play on words. I could care less what you think about anything.

        1. 3.2.1.1

          Gabbard hits Clinton with 50 million defamation lawsuit over Russian asset remarks

          link to foxnews.com

        2. 3.2.1.2

          Your opinion(?) is noted.

          And from that opinion it is clear that you have many problems, of which not caring (when you should) is likely only a mild one.

  16. 2

    because it raises incentives to commercialize and can avoid transaction costs in the marketplace.

    The Quid Pro Quo is not — and never has been — about actual commercialization, as such is a ‘positive right’ attribute and does not reflect the ‘negative right’ aspect of what a patent is. Note here that improvement patents (of which, such are the majority of patents) may NOT even be held by a same entity of a (patented) item that may be the subject of the improvement. This speaks to the point that is may not even be possible to practice a patented innovation on one’s own (and that there is nothing wrong with such).

    “Avoiding transaction costs” is nothing more than an Orwelllian double-speak for diminishing the power of the patent right. Transaction costs are supposed to be high, as such align with the negative right aspects of patents.

    1. 2.1

      … the innovation promotion effects of the patent property are most effective with BOTH a carrot and stick approach.

      “Reduced transaction costs” being nothing more than doublespeak to mean taking away the stick (which doubles down and reduces the carrot).

      At IPWatchdog, there was a short series on “rational actors,” and it IS to be understood that Efficient Infringement very much may be ‘accepted’ under a Rational Actor approach.

      This type of acceptance though is nothing but a Trojan Horse, a corrupting fallacy that strikes at the heart of even having a patent system.

      Above, S Ghosh postulates that things are not “as hard and rigid” as the opposing treatments of property rule and liability rule suggest, and he is correct, but only so far as those wanting to denigrate the patent right have been successful in blurring the lines of what is at heart a very bright line situation. He is incorrect in that any level of “more dimensions” should change the foundational bright line expectations.

  17. 1

    Any change this generation will come from the legislature.

    Sadly, the Court has refused to pick up the Kavanaugh Scissors to cut the Gordian Knot of its own creation (and clean up after itself).

    Cue the prologue to the Act of 1952…

Leave a Reply

Your email address will not be published. Required fields are marked *

You can click here to Subscribe without commenting

Add a picture