BEYOND OBVIOUSNESS: INVENTION
PROTECTION IN THE TWENTY-FIRST
CENTURY
A.
SAMUEL ODDI*
TABLE OF CONTENTS
Introduction ................................................
I. Traditional Rationales for Patents ....................
A. Historical Rationales ............................
B. Moral and Pragmatic/Economic Justifications ....
II. Patent-Induced Inventions Within the Present System
A. Economic Importance ...........................
B. Patentability Requirements as Discriminators ....
1. Statutory class/utility ........................
2. Novelty/nonobviousness .....................
C. Impact of Present System on Revolutionary
Inventions ......................................
III. Proposal: Revolutionary Patent ......................
A. Requirements for Protection ....................
1. Statutory class/utility ........................
2. Qualitative standard .........................
a. Technical factor-extraordinary advance
to expert ................................
b. Commercial factor-extraordinary to an
expert in revolutionizing production or
consumption patterns ...................
c. Investment factor-extraordinary quantity
and quality of investment to expert ......
3. Summary of proposal ........................
B. Characteristics of Protection .....................
1098
1102
1102
1107
1114
1114
1116
1117
1120
1127
1128
1129
1129
1131
1132
1133
1135
1137
1137
*
Professor of Law, Northern Illinois University College of Law. The author wishes to
express his appreciation for the research assistance in the preparation of this article ofJohn
Austin and Rebecca Trammell, Law Librarians, Northern Illinois University College of Law,
and Michael Mihm, his research assistant.
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C. Domestic and International Implications .........
Conclusion .................................................
1141
1147
INTRODUCTION
As the twenty-first century approaches, it is a propitious time to
reexamine some basic tenets of the United States patent system,
which celebrates its bicentennial in 1990.1 Reexamination is also
warranted by the perception that the United States is in a period of
2
technological decline relative to other highly industrialized nations.
One of the most significant evolutionary developments of the last
quarter century has been the reorientation of the American economy from manufacturing to services. 3 Throughout this evolution,
American industry has lost its dominant position in important basic
manufacturing areas and has suffered serious erosions in other areas, including high-technology. 4 Additionally, during the past decade, the United States has seen its foreign trade surplus wither into
huge trade deficits which are expected to continue into the next cen1. The first federal patent statute was enacted by the first Congress. Act of April 10,
1790, ch. 7, 1 Stat. 109, 110 (current version in scattered sections of 35 U.S.C.). See generally
B. BUGBEE, GENESIS OF AMERICAN PATENT AND COPYRIGHT LAW (1967) (providing historical
study of evolution of U.S. patent system).
2. See, e.g., S. GEE, TECHNOLOGY TRANSFER, INNOVATION, AND INTERNATIONAL COMPETITIVENESS 197 (1981) (concluding that, while U.S., Japan, and West Germany are all world
economic powers, only U.S. is currently experiencing substantive erosion in productivity,
growth, and international competitiveness); S. KIMURA, JAPAN'S SCIENCE EDGE: How THE
CULT OF ANTI-SCIENCE THOUGHT IN AMERICA LIMITS U.S. SCIENTIFIC AND TECHNOLOGICAL
PROGRESS 2 (1985) (remarking that, while 15 years ago American science and technology outdistanced that ofJapan and West Europe, presently America is comparatively weak in these
same areas);J. KURTZMAN, THE DECLINE AND CRASH OF THE AMERICAN ECONOMY 12-13 (1988)
(stating that while U.S. is still biggest economy in world, it is no longer most competitive, and
cautious planning must begin immediately to reverse decline). This issue, however, is far
from settled. Compare PRESS, TECHNOLOGICAL COMPETITION AND THE WESTERN ALLIANCE IN A
HIGH TECHNOLOGY GAP? EUROPE, AMERICA ANDJAPAN 29-30 (A. Pierre ed. 1987) [hereinafter
TECHNOLOGY GAP] (stating that, on strength of its advanced technological base, U.S. is
number one seed in future competition for economic leadership) with Louis RUKEYSER'S BUSINESS ALMANAC ch. 12 (L. Rukeyser, J. Cooney eds. 1988) [hereinafter BUSINESS ALMANAC]
(explaining that, while U.S. manufacturing productivity grew annually only 2.7% between
1960 and 1985, productivity grew 8.0% in Japan, 5.5% in France, 3.4% in Canada, 4.8% in
Germany, 5.4% in Italy, 3.5% in the United Kingdom, 6.5% in Belgium, 4.8% in Denmark,
6.2% in the Netherlands, 3.2% in Norway, and 4.7% in Sweden).
3. BUSINESS ALMANAC, supra note 2, at 199. Over 75% of all workers in the U.S. currently are employed in service industries as compared to 68% in 1972 and 59%o in 1952. Id.
This is expected to increase to 80% by the turn of the century. Id.
4. See id. at 492 (noting decline of consumer electronics industry, where imports dominate market in television receivers, audio cassette recorders, video cassette recorders, and
portable stereo equipment). The automobile industry also has been flooded by imports,
which have increased from 15% in 1970 to 26% in 1985 and are expected to rise to over 35%
in 1990. Id. at 393-94; see alsoJ. KURTZMAN, supra note 2, at 187 (finding that in textile industry, imports rose to 55% in 1988 and 700,000 jobs were lost); Farnsworth, Lag in High-Tech
Trade Seen in Congress Study, N.Y. Times, Oct. 21, 1986, at DI, col. I (stating that high-tech
balance of trade went from $27 billion surplus in 1980 to $2 billion deficit in 1986).
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INVENTION PROTECTION
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tury.5 At the same time, the United States has gone from being the
world's largest creditor nation to the largest debtor nation and continues to post horrendous budget deficits that require increasing infusions of foreign credit. 6 The movement of venture capital from
high-tech industries to more mundane enterprises, in which shortterm rewards are more readily achieved, is also troubling. 7
The decrease in inventions granted to American inventors as
compared to foreign inventors provides another indication of our
technological decline over the last several decades. 8 Significantly,
5. In 1975, there was a merchandise trade surplus of $9 billion. STATISTICAL ABSTRACT
OF THE UNITED STATES 756-57 (108th ed. 1988) [hereinafter STATISTICAL ABSTRACT]. In 1985,
the deficit was $133.6 billion; in 1986, $156 billion; in 1987, $171 billion; and, in 1988, it is
projected to be approximately $140-150 billion. FEDERAL RESERVE BOARD, INTERNATIONAL
STATISTICS, FEDERAL RESERVE BULL. A54 (June 1988). The Federal Reserve figures are higher
than the Census Bureau figures because of coverage and timing differences. Id.
6. The Federal budget deficit rose from $73.8 billion in 1980 to $155.1 billion in 1988.
OFFICE OF MANAGEMENT AND BUDGET, BUDGET OF THE UNITED STATES, HISTORICAL TABLES, 16
(1988) [hereinafter BUDGET OF THE UNITED STATES]. During the same period, the gross
United States debt increased from $0.38 trillion in 1970 to $2.6 trillion in 1988. Id. at 143-44.
Professor Benjamin Friedman summarizes the situation:
At the beginning of the 1980s, foreigners owed Americans far more than we owed
foreigners. The balance in our favor, amounting to some $2,500 per family, made
the United States the world's leading creditor country, enjoying the advantages of
international influence and power that have always accompanied such a position.
Today, after a half dozen years in which our government has borrowed record sums
on our behalf, we owe foreigners far more than they#owe us. The balance against us
already amounting to more than $7,000 per family, now makes the United States the
world's largest debtor. Foreigners have already begun to settle these debts by taking
possession of office buildings in American cities, houses in American suburbs, farm
land in the heartland, and even whole companies. We are selling off America, and
living on the proceeds.
B. FRIEDMAN, A DAY OF RECKONING 6 (1988).
7. See Lueck, High Tech's Glamour Fadesfor Some Venture Capitalists, N.Y. Times, Feb. 6,
1987, at Al, col. 3 (stating that technology is not as highly rewarded as other forms of investments). Investment capital, which once nurtured the growth of companies like Apple Computer, Genentech and Lotus Development, is now directed to investments with little
innovative or job-creating benefits. Id.; see also Altman & Brown, Ridding Wall Street of a Short
Term Bias, N.Y. Times, June 1, 1986, at 3, col. 1 (discussing adverse effect short term investments have on high tech industries).
8. See S. GEE, supra note 2, at 61 (discussing decline of American productivity, growth,
and international competitiveness). Gee traced the period from 1963 to 1977 and concluded
that there is some correlation between a nation's patent activity and its international competitiveness. Id. Gee's cautious words are made more forceful in view of our accumulating trade
deficits. See supra note 5 and accompanying text (providing statistics to demonstrate mounting
trade imbalance).
From 1963 to 1977, the percentage of patents granted to foreigners increased from 18% to
367o. S. GEE, supra note 2, at 60-61. By 1982, the figure was 40%, and in 1986 the percentage had increased to 45%. Id. Furthermore, the percentage of patents granted to Japanese
inventions jumped from 10% in 1978 to almost 18% in 1986, while the percentage of patents
granted to inventors for West Germany and the United Kingdom remained almost constant.
See COMMISSIONER OF PATENTS & TRADEMARK OFF., 1986 ANN. REP. 55-57 (1987) (discussing
worldwide patent distribution). The percentage of U.S. patents assigned to foreign corporations increased by 2% in 1987 and 1988 over 1986, while the other percentages remained
essentially constant. SeeJ. MEYERS, ALL TECHNOLOGIES REPORT - U.S. PATENT & TRADEMARK
OFFICE A3 (1988) (unpublished report).
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this decline has coincided with the decline in the performance by
United States students on standardized mathematics and science aptitude tests. 9 Even more telling, however, is how poorly our students fare on such tests when compared to students in competing
industrialized nations. 10 Moreover, because the number of American students studying engineering and science is declining in comparison to other countries, a significant shortfall in technical
personnel is projected for the next century."I
These indicators of technological decline are offered on a
"'macro" scale and are not intended to suggest that the United
2
States lacks pockets of technological excellence and dominance.'
Nonetheless, if these indicia suggest present or future relative technological decline or, at least, under-investment in the creation of
inventions, a serious question arises as to whether the United States
is fulfilling the promise of article I, section 8, clause 8 of the Constitution. This clause empowers Congress to enact legislation, "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."1 3 Thus, the framers intended
to provide an economic incentive in the form of a time-limited monopoly for the creation of progress-producing writings and inventions. If the declining number of American inventions is
undesirable for the American economy, then a reexamination of the
incentives provided by ' the United States patent system is
appropriate. 14
9. On the math portion of the Scholastic Aptitude Test (SAT), scores fell from 492 in
1967 to 466 in 1980 and 1981. They rose slightly to 475 in 1985 and 1986. Scores on the
math portion of the American College Testing (ACT) Program dropped from 20.0 in 1970 to
16.9 in 1983 and then increased slightly to 17.3 in 1986. STATISTICAL ABSTRACT, supra note 5,
at 137.
10. The comparative results for 8th and 12th grade international tests show that the
mathematics test average for U.S. students was lower than the average of all participating
developed countries. THE CENTER FOR EDUCATIONAL STATISTICS, U.S. DEPr. OF EDUCATION,
CONDITION OF EDUCATION: A STATISTICAL REPORT 17 (1987).
11. Soloman, American Laboratories,ForeignBrains, N.Y. Times,July 19, 1987, § 3, at 8, col.
1 (explaining that since mid-1970s, percentage of foreigners earning doctorates in engineering doubled to 60%o, while approximately 40%o of U.S. doctorates in computer science and
mathematics were awarded to foreigners). The situation is expected to worsen and by the
turn of the century there will be a shortfall of perhaps 700,000 engineering and science undergraduate students. See id. at 8; see also Kelly, Why Johnny Doesn't Like R & D, Chicago Tribune, Nov. 15, 1988, § 1, at 17 (stating that approximately 55%o of undergraduate engineering
students are foreigners). Kelly also reported that a recent survey indicates that 83%o of U.S.
research scientists believe that by the year 2000.Japan will lead the U.S. in technology. Id.
12. Examples of U.S. technological preeminence include computers, software,
microelectronics, and defense, aerospace, and nuclear technology. See Oshima, The High Technology Gap: A View From Japan 88, in TECHNOLOGY GAP, supra note 2, at 98-99 (discussing
Japanese perspectives on technology gap).
13. U.S. CONST. art. I, § 8, cl. 8.
14. See infra notes 103-76 and accompanying text (exploring present U.S. patent system).
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Any proposal for strengthening the patent system by increasing
or altering incentives must weigh the potential economic consequences of the patent monopoly.1 5 To the extent that economists
can agree on whether the patent system in an industrialized economy produces a net economic benefit to that society, 16 two propositions of general accord emerge. First, if a patent system already
exists, it is irresponsible.to abolish it on the basis of the present
state of knowledge. The corollary to this is that if a nation does not
have a patent system, there is insufficient evidence to establish
one. 17 The second proposition is that a patent system produces a
net benefit to society provided patents are granted only for those inventions induced by the patent system.' 8 These "patent-induced"
inventions are ones that would not have been made butfor the availability of patents. 1 9 The corollary to this proposition is that a society
may suffer a net loss when patents are granted on "nonpatent-induced" inventions. 20 Whether a patent system provides a net benefit and the magnitude of such a benefit to an industrialized country,
15.
See Cheung, Property Rights and Invention, 8 RES. L. & ECON. 5 (1986) (criticizing early
and existing economic arguments relating to patent systems); see also Turner, The Patent System
and Competitive Policy, 44 N.Y.U. L. REv. 450, 454-55 (1969) (outlining costs of patent system);
infra notes 90-98 and accompanying text (discussing costs and studies of patent system).
16. See infra notes 55-102 and accompanying text (explaining different rationales for patent grants).
17. See STAFF OF SENATE SUBCOMM. ON PATENTS, TRADEMARKS AND COPYRIGHTS, 85TH
CONG., 2D SEss., AN ECONOMIC REVIEW OF THE PATENT SYSTEM, STUDY No. 15, at 80 (Comm.
Print 1958) [hereinafter ECONOMIC REVIEW] (concluding that Congress could not recommend
abolishing or establishing patent system on basis of its knowledge of our present system and
its economic consequences). This conclusion has been reaffirmed in later studies. See
Peckham, Should the U.S. Patent Laws be Abolished?, 11 J. CONTEMP. L. 389, 421 n.93 (1985)
(arguing that present patent system warrants retention); Turner, supra note 15, at 453-55 (discussing significant costs and benefits of current patent system).
18. See infra notes 103-15 and accompanying text (comparing economic importance of
patent-induced inventions with nonpatent-induced inventions).
19.
See F. SCHERER, INDUSTRIAL MARKET STRUCTURE AND ECONOMIC PERFORMANCE 442-43
(2d ed. 1980) (concluding that if patent protection were limited only to inventions that patent
system induced, society would benefit from cost-saving inventions less development costs).
Furthermore, Scherer states that except when profits come from cannibalization of the profits
that would otherwise be enjoyed by the producers of substitute products, society, including
consumers and producers, gains from inventions that are induced or hastened by patent rights.
Id.; see also Greer, The Case Against Patent Systems in Less-Developed Countries, 8J. INT'L L. & ECON.
223, 224 (1973) (stating that economic benefits of patent-induced inventions, such as production cost savings and new product consumption utilities, always exceed social costs and yield
net benefit).
20. See Kahn, The Role of Patents, in COMPETITION CARTELS AND THEIR REGULATION 308,
311 (1. Miller ed. 1962) (stating that as long as invention would not have been developed but
for patent, social cost will always be less than benefit; but converse is equally true). But see W.
BOWMAN, PATENT AND ANTITRUST LAW 32 (1973) (discussing long-standing legislative judgment that consumer-oriented reward system that grants patentee temporary right to exclude
others provides social benefit because resources are better allocated); Kitch, The Nature and
Function of the Patent System, 20 J.L. & ECON. 265, 275-80 (1977) (stating that legal system
incorporating trade secrecy and patent system better serves public welfare than legal system
with only trade secrecy).
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therefore, is directly related to the ratio of patent-induced to nonpatent-induced inventions.
This Article explores the possibilities for restructuring the incentives provided under a patent system in an attempt to offset any misallocation of resources under the present system and to increase the
yield of patent-induced inventions. Part I of this Article provides
the traditional rationales for patent protection. Part II examines the
present patent system, particularly the statutory conditions for patentability (novelty, utility, and nonobviousness), the statutory
classes of inventions, and the time-period of exclusivity, and
whether these conditions provide adequate incentives for invention.
In light of this analysis, Part III sets forth a proposal for overcoming
the perceived inadequacy of the present system and considers the
domestic and international implications of any restructuring. This
Article concludes that the utility patent, as presently known, may not
provide for the optimal title of protection in the future.
I.
TRADITIONAL RATIONALES FOR PATENTS
A.
Historical Rationales
The basic rationale that inventions benefit society and, therefore,
incentives should be granted to inventors to induce inventions has
been recognized for more than five centuries. This is reflected in
the Venetian patent statute of 1474, which sounds remarkably
modern:
We have among us men of great genius, apt to invent and discover ingenious devices; and in view of the grandeur and virtue of
our City, more such men come to us every day from divers parts.
Now, if provision were made for the works and devices discovered
by such persons, so that others who may see them could not build
them and take the inventor's honor away, more men would then
apply their genius, would discover, and would build devices of
great utility and benefit to our Commonwealth. Therefore: Be it
enacted that, by the authority of this Council every person who
shall build any new and ingenious device in this City, not previously made in our Commonwealth, shall give notice of it to the
office of our General Welfare Board when it has been reduced to
perfection so that it can be used and operated. It being forbidden
to every other person in any of our territories and towns to make
any further device conforming with and similar to said one, with-
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INVENTION PROTECTION
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out the consent and license of the author, for the term of 10
2
years. '
This preamble makes it clear that the Venetian government deemed
it in the public interest to provide an inducement not only to local
inventors but also to foreign creators who made inventions that
would benefit the community. The reward offered was exclusivity,
the right to exclude others from making this particular invention.
The text of the statute, nonetheless, placed certain conditions on
this grant of exclusivity. First, a quality standard for protectability
was imposed on "devices," which were the subject matter of inventions. 2 2 The device had to be "new and ingenious," 23 which translates into the "novelty" and "inventive step" or "nonobviousness"
standards of modern patent laws. The novelty requirement was not
universal, however, but limited territorially to those inventions "not
previously made in the Commonwealth." '2 4 Second, the invention
needed "utility" in the sense that it could be "used and operated."'2 5
Third, the invention had to be built in Venice, and finally, exclusivity was granted only for a limited term, ten years. 26 The statute also
provided for damages in the form of a fine to be paid by the infringer to the patent owner and the sanction of destruction of the
27
infringing device.
In sum, the government, in exchange for the patent grant, wanted
the device to be "new and ingenious," at least insofar as Venice was
concerned, to have utility, and to be available for use within Venice.
Thus, the quid pro quo for the exclusive grant was not only the disclosure of the invention in Venice but also its "working" there. In a
sense, the invention was built and sold or operated within and for
the benefit of the Venetian Commonwealth. Moreover, the government expressly retained its eminent domain power to expropriate
the "use" of the invention. 28 Although the legal and bureaucratic
complexities of patent systems have multiplied over the years, their
fundamental characteristics have not changed.
History demonstrates that exclusive rights in the form of a monopoly have been granted for less desirable ends than inducing in21. Mandich, Venetian Patents (1450-1550), 30 J. PAT. OFF. Soc'Y 166, 176-77 (1948)
(quoting Venetian patent statute of 1474).
22. Id. at 176.
23. Id.
24. Id. at 177.
25. Id.
26. Id.
27. Id. (authorizing magistrate to fine infringer hundred ducats and to order device destroyed at once).
28. Id. (mandating that government could take and use any device and instrument for
governmental purposes provided that no one but inventor operated it).
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ventions. 29 Although monopolies were considered illegal even at
common law, 30 various sovereigns, England's Tudors and Stuarts in
particular, granted monopolies to individuals as a means of raising
money and as a reward for political service rendered to the sovereign. 3 ' These abuses cast doubt on the social merit of any monopoly, including those for inventions. The English Monopolies Act of
162332 proscribed monopolies "for the sole buying, selling, making,
working or using of anything within this Realm," but permitted the
sovereign to grant patents on inventions for fourteen years, again
recognizing that an incentive was to be provided for the creation of
inventions. 33 Nonetheless, the Monopolies Act, while authorizing
the grant of patents on new manufactures, specifically stated that
these grants were not to be "contrary to the law nor mischievous to
the state, by raising prices of commodities at home, or hurt trade, or
34
generally inconvenient."
When the United States Constitution was drafted, the framers
generally distrusted monopolies, and they were even ambivalent
about granting monopolies for inventions. 35 Nonetheless, article I,
section 8, clause 8 of the Constitution, which was adopted without
debate,3 6 empowers Congress "to promote the Progress of Science
29. See I W. ROBINSON, THE LAW OF PATENTS 6 (1890); see also P. MEINHARDT, INVENTIONS,
PATENTS AND MONOPOLY 22-25 (2d ed. 1950) (stating that patents have also been granted in
recognition of inventor's moral right to invention); Federico, Onin and Early History of Patents,
11 J. PAT. OFF. Soc'y 292, 299-302 (1929) (describing objectionable reasons for issuance of
patents, including generation of income for crown and rewards for servants and favorite
courtiers).
30. Darcy v. Allein (The Case of Monopolies), 11 Co. Rep. 84b, 87b-88a, 77 Eng. Rep.
1260, 1265 (1602). In this famous case, the court voided a monopoly granted by Queen
Elizabeth for the production of playing cards. Id. at 88a; 77 Eng. Rep. at 1265.
31. 1 W. ROBINSON, supra note 29, at 7 (explaining how Queen Elizabeth used grant of
monopoly for personal and political gain). By the end of her reign, monopolists controlled
the consumption of even common articles, such as salt, iron, powder, vinegar, bottles, satpetre, oil, starch, and paper. Id. The resulting price increases were enormous; salt, for example,
previously sixteen pence a bushel rose to fifteen shillings. Id.; see also I LIPSCOMB'S WALKER
ON PATENTS 1:2 (3d ed. 1984) (describing early common law monopolies in England).
32. Statute of Monopolies, 1623, 21Jac. I, ch. 3 (sometimes dated 1624), reprintedin 7 D.
PICKERING, STATUTES AT LARGE 255 (1763).
33. Id.
34. Id.
35. Graham v. John Deere Co., 383 U.S. 1, 7 (1965) (noting that Jefferson and other
Americans abhorred monopolies and patents, which was one reason why colonists revolted
against crown). Jefferson, however, moderated his views and approved of monopolies for
literature and inventions. Id. at 8. Jefferson made it clear that such a grant was in the nature
of a privilege and not a natural right. Id. at 8 n.2.
36. See Fenning, The Origin of the Patent and Copyright Clause of the Constitution, 17 GEO. L.J.
109, 114 (1929) (describing origins and adoption of patent provision in U.S. Constitution).
James Madison submitted a proposal for article I, section 8, clause 8, as did Charles Pinckney.
Id. at 112. In reference to a congressional resolution in 1783 under the Articles of Confcderation recommending that the respective states adopt copyright protection, Madison stated in
The Federalist:
The utility of this power will scarcely be questioned. The copyright of authors has
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INVENTION PROTECTION
1105
and the useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and Discoveries." 3 7 This clause makes clear that any incentive provided to
"inventors " is designed to promote the "useful Arts." 38 The United
States patent system begun in 1790, presumably has served that
39
end.
The Venetian Statute, the Monopolies Act, and article I, section 8,
clause 8 of the United States Constitution, illustrate how a patent
acts as a privilege granted to inventors in consideration for their
invention's contribution to the development of the granting country. In other words, the reward given by the state is in exchange for
services rendered to the state.
In contrast, the French Patent Statute of 1791 went further and
provided that every useful invention belongs to the inventor as a
property right. 40 Hence, in this revolutionary conceptual framework, it is the inventor's natural right to receive a patent as property
and not merely a privilege from the state. 4i Yet, even in French
patent law, the inventor was required to build and use the invention
in France, implying that the state would receive some benefit in ex42
change for the exclusive grant.
Even though the French patent right was enunciated as one of
man's natural rights, all countries did not share this revolutionary
fervor, and the adoption of patent statutes by other countries over
the next century was sporadic. 43 Indeed, at the end of the nineteenth century, significant anti-patent sentiment called for the nonadoption or abolishment of patent systems, because they were antibeen solemnly adjudged in Great Britain to be a right at Common Law. The right to
useful inventions seems with equal reason to belong to the inventors. The public
good fully coincides in both cases with the claims of the individuals.
Id. at 114. Apparently, Madison adopted a natural rights theory of intellectual property. In
1787, Madison suggested, however, that the award of prizes might be more appropriate than
patents. See ECONOMIC REVIEW, supra note 17, at 15.
37. See U.S. CONST. art. I, § 8, cl. 8.
38. See id.
39. See Act of April 10, 1790, ch. 7, 1 Stat. 109-110 (current version in scattered sections
of 35 U.S.C.). The qualification "presumably" is used to avoid being charged with post hoc ergo
propterhoc reasoning, as some patent advocates have in the past. See U. ANDERFELT, INTERNATIONAL PATENT-LEGISLATION
AND DEVELOPING COUNTRIES
27-28 (1971) (explaining that
United States industrial and scientific progress provides proof of patent system's effectiveness
(citing Brown, Whither Goes the United States Patent System?, 9 IDEA 251, 256 (1965)).
40. ECONOMIC REVIEW, supra note 17, at 22 (quoting preamble to patent law adopted by
French Constitutional Assembly in 1791).
41. Id.
42. See U. ANDERFELT, supra note 39, at 15 (explaining that inventors could lose patent if
they took out foreign patent for same invention).
43. See 3 S. LADAS, PATENTS, TRADEMARKS, AND RELATED RIGHTS: NATIONAL AND INTERNATIONAL PROTECTION 7 n.27 (1975) (listing limited number of countries adopting patent legislation during the 19th century).
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competitive, extracted high social costs, and enhanced the abuses of
monopoly power.4 4 The influence of the anti-patent movement was
short-lived, however, and patent statutes were adopted by numerous states in the late nineteenth and early twentieth centuries. 4 5
OnJuly 7, 1884, the Paris Convention for the Protection of Industrial Property created the international patent system. 46 Since then,
a number of revisions in the original Convention, 4 7 as well as the
adoption of other multilateral treaties relating to patents, have
48
broadened the international patent system.
Understandably, there have been periods of anti-patent sentiment
resulting from economic abuses associated with patents, including
confrontation with the antitrust laws 4 9 and attempts to extend the
patent monopoly beyond the invention itself. 50 In the United
States, all three branches of government have shown sensitivity to
such abuses with various degrees of commitment over time. 5 '
44.
See EcoN. REv., supra note 17, at 25-44 (surveying issues discussed after 1853 in
ongoing patent controversy); E. PENROSE, THE ECONOMICS OF THE INTERNATIONAL PATENT SYS-
TEM 12-17 (1973) (describing 19th century patent controversy). See generally Machlup & Penrose, The Patent Controversy in the Nineteenth Century, 10J. ECON. HIsT. I (1950).
45. See E. PENROSE, supra note 44, at 16-18 (explaining weakening of anti-patent movement caused by 1873 European depression and increasing nationalism and protectionism).
46. Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, 25 Stat.
1372, T.S. No. 379 [hereinafter Paris Convention], as revised by Act of Brussels, Dec. 14, 1900,
32 Stat. 1936, T.S. No. 411; Act of Washington,June 2, 1911, 38 Stat. 1645, T.S. No. 579; Act
of the Hague, Nov. 6, 1925,47 Stat. 1789, T.S. No. 834; Act of London,June 2, 1934, 53 Stat.
1748, T.S. No. 941; Act of Lisbon, Oct. 31, 1958, 13 U.S.T. 1, T.I.A.S. No. 4931; Act of
Stockholm, July 14, 1967, 21 U.S.T. 1629, T.I.A.S. No. 1583. The original signatories of the
Paris Convention were Belgium, Brazil, France, Guatemala, Italy, Netherlands, Portugal, [El]
Salvador, Serbia, Spain, and Switzerland. S. LADAS, supra note 43, at 67. Acts of accession
were filed by Great Britain, Ireland, Tunis, and Ecuador prior to the effective date of the
Convention. Id. at 67-68. The Paris Convention entered into force in the United States on
May 30, 1887. Id. at 75 n.35. See generally E. PENROSE, supra note 44, at 42-59 (providing
extensive analysis ofevents leading up to signing of Paris Convention). Penrose also provides
a useful appendix, which lists members of the Convention plus when and tinder which text of
the Convention they acceded. Id. at 58-59.
47. See, e.g., Act of Brussels, Dec. 14, 1900, 32 Stat. 1936, T.S. No. 411 (extending period
of priority for patents from six to twelve months); Act of Washington, June 2, 1911, 38 Stat.
1645, T.S. No. 579 (granting inter alia provision for suppression of unfair competition in relation to other countries of Union); Act of the Hague, Nov. 6, 1925,47 Stat. 1789, T.S. No. 834
(providing inter alia right to take legislative measures for failure to use patent).
48. Patent Cooperation Treaty of 1970, 28 U.S.T. 7645, T.I.A.S. No. 8733 (establishing
system of international application for protection of inventions).
49. See generally L. SULLIVAN, ANTITRUST ch. 6 (1977) (discussing patent arrangements
that fall within realm of restraint of trade); W. HOLMES, INTELLECTUAL PROPERTY AND ANTI-
TRUST LAW pt. IV (1986) (discussing exploitation of patent agreements and subsequent antitrust violations); W. BOWMAN, supra note 20 (arguing that granting patentee temporary right
to exclude others provides social benefits and permits more favorable allocation of resources).
50. See L. SULLIVAN, supra note 49, §§ 183-191 (discussing patent arrangement constituting contracts, combinations, and conspiracies in restraint of trade).
51. The patent misuse doctrine is a notable example. See Dawson Chem. Co. v. Rohn &
Haas Co., 448 U.S. 176 (1980) (holding that respondent did not misuse patent by tying its
sale of patent rights to purchase of unpatented product, because 35 U.S.C. § 271(d) confers
upon patentee right to exclude others and reserve to itself right to sell non-staples used sub-
1989]
INVENTION PROTECTION
1107
Nonetheless, and particularly in recent times, patent laws continue
to expand and strengthen. 5 2 Indeed, new and alternative forms of
protection have been created for innovations that do not fit well into
53
the traditional patent system.
In summary, the present patent system follows the same basic assumptions intuitively applied five hundred years ago-that an incentive should be offered for the creation of inventions and that
exclusivity is the best incentive. History shows the continuous tension and ever-shifting balance between the public interest in benefiting from inventions and the private interests of patent owners in
54
fully exploiting the exclusive rights afforded them.
B.
Moral and Pragmatic/EconomicJustifications
This section outlines two justifications for patent grants. The first
justification, which is the moral justification for the grant of the patent right, is based on the natural right theory that all inventors are
stantially in invention); Oddi, Contributory Infringement/PatentMisuse: Metaphysics and Metamorphosis, 44 U. Prrr. L. REv. 73 (1982) (discussing change in Supreme Court's attitude toward
patents as reflected in Dawson). Recent legislation adds two further exemptions to patent
misuse. See Patent and Trademark Authorization Act, Pub. L. No. 100-703, § 201, 102 Stat.
4674 (1988) (amending 35 U.S.C. § 271(d) (1982)). The Act provides that a patent owner will
not be denied relief for the infringement of his patent even though he 1) refuses to license or
use any rights he has in the patent, or 2) conditions the license of his patent rights on the
acquisition of a license to rights in another patent or purchase of a separate product. Id. This
second exemption does not apply if the patent owner has market power in the market for the
patent or patented product on which the license or sale is conditioned. See 36 Pat. Trademark
& CopyrightJ. (BNA) 88 (1988). In addition, the Antitrust Division withdrew from its per se
approach to restrictions on patent licensing agreements. See 30 Pat. Trademark & Copyright
J. (BNA) 319 (1985).
52. For example, the United States recently expanded the scope of patent protection.
First, the term of certain patents relating to human drugs was extended. See 35 U.S.C. §§ 154157 (1982 & Supp. IV 1986). Second, patent infringement was broadened to include supplying components in or from the United States for an invention assembled outside the United
States. See id. § 271(0. Section 271(f) overruled Deepsouth Packing Co. v. Laitram Corp.,
406 U.S. 518 (1972) (holding petitioner not foreclosed from making parts for shrimp dicing
machines to sell to foreign buyers for assembly and use abroad). Finally, the scope of patent
infringement now includes imported products made by a process patented in the United
States. Process Patent Amendments Act of 1988, Pub. L. No. 100-418, §§ 9001-9007, 102
Star. 1563-67 (1988) (to be codified at 35 U.S.C. §§ 154, 271, 281, 287, 295).
53. See Semiconductor Chip Protection Act of 1984, 17 U.S.C. §§ 901-914 (Supp. IV
1986) (providing sui generis protection against reproduction of "mask works" involving semiconductor chips); infra notes 254-55 and accompanying text (discussing Act in international
context); see also Act of Dec. 12, 1980, Pub. L. No. 96-517, 99 Stat. 3028 (amending Copyright
Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (codified at 17 U.S.C. §§ 101-603 (1982 &
Supp. IV 1986)) to include expressly definition of "computer program." This new definition
allows computer programs to fall within the literary work category of the copyright law's statutory subject matter. See Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240,
1249 (3d Cir. 1983) (holding that computer program, whether in object or source code, is
literary work covered by expanded definition of § 101 and is protected from unauthorized
copying).
54. See supra notes 30-53 and accompanying text (discussing historic tension between
public interest of benefitting from new inventions and patent owners' private interest of utilizing exclusive rights granted to them).
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entitled to patents as their own property. The second justification
treats a patent as a privilege, granted to the inventor in the interest
of society as an inducement to create and disclose inventions. This
is the pragmatic or economic rationale for the grant of the patent
privilege.
Edith Penrose and Fritz Machlup, in their classic economic studies
of the patent system, 5 5 discuss four theses within the above categories. In addition to the natural-law thesis, they add the reward-bymonopoly thesis, which assumes that persons should receive rewards for services in proportion to the product's usefulness to society and that a monopoly is the most appropriate reward for an
inventor. 56 They also divide the patent privilege justification into
two economic or pragmatic theses. First, the monopoly-profit-incentive thesis holds that granting exclusive rights is the most efficient means of ensuring that sufficient inventions are provided for
economic development.5 7 The second pragmatic argument is the
exchange-for-secrets thesis. 58 Underlying this theory is the belief
that the exclusivity provided by a patent is the appropriate means to
induce inventors to disclose inventions that otherwise would remain
secret and unavailable to society. 59 Penrose and Machlup, as well as
60
other commentators, are critical of each of the theses.
The natural-law thesis, which focuses on property rights, is subject to particularly strong criticism. There are many conceptual difficulties in designating an intangible idea as property. In this
regard, Thomas Jefferson said:
It would be curious then, if an idea, the fugitive fermentation of
an individual brain, could, of natural right, be claimed in exclusive
and stable property ....
That ideas should freely spread from
one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have
55. E. PENROSE, supra note 44, at 19-41 (explaining that due to increased international
interdependence, patent system has grown and expanded, necessitating thorough review of
its historic and practical rationales); see also ECONOMic REVIEW, supra note 17, at 21-25 (referring to Machlup's economic theories regarding patent system). For convenience, this Article
incorporates Machlup's terminology.
56. E. PENROSE, supra note 44, at 26-31 (arguing that ultimate goal of invention in reward-by-monopoly thesis is market domination). See ECONOMIC REVIEW, supra note 17, at 21,
23 (discussing historical development of thesis).
57. E. PENROSE, supra note 44, at 26-31 (stating that argument implies that invention is
work of identifiable inventor, invention's usefulness to society is measured by total revenue
obtainable by monopolist in market, and inventor's moral deserts are proportionate to invention's usefulness); ECONOMIC REVIEW, supra note 17, at 21, 24.
58. E. PENROSE, supra note 44, at 32 (describing theory as one which involves "social
contract" between inventor and society).
59.
60.
E. PENROSE, supra note 44, at 34-39; ECONOMIC REVIEW, supra note 17, at 24-25.
E. PENROSE, supra note 44, at 19-4 1; ECONOMIC REVIEW, supra note 17, at 22-25 (not-
ing vastly divergent opinions in international patent matters).
1989]
INVENTION PROTECTION
1109
been peculiarly and benevolently designed by nature.., and like
the air in which we breathe, move, and have our physical being,
Inventions
incapable of confinement or exclusive appropriation.
61
then cannot, in nature, be a subject of property.
Unlike tangible property, once an idea is communicated, it cannot
be returned. Granting an idea, a patent elevates misappropriation
of the idea to the moral equivalent of stealing. 62 Moreover, if a pat-
ent is a natural right, why should it be limited to a particular period
of time, while other property is not?63 Why should industrial inven-
tions receive special status compared to fundamental ideas and principles, for example, in the natural sciences, which presumably are
not subject to exclusive appropriation?64
The other moral justification, the reward-by-monopoly thesis, is
based on the premise that justice requires a reward proportionate to
the invention's usefulness to society. 65 The question is whether
governmental intervention in the form of a patent is required to re-
ward justly the inventor. The inventor has an inherent advantage
over others by being first on the market-the "head-start" advantage. 66 Moreover, other less restrictive measures may directly re-
ward the inventor, such as prizes or awards that are proportioned to
the invention's value to society. 67 In addition, certain inventions in
a patent system may be under-rewarded while others are over-rewarded.6 8 Finally, those inventions that fall outside the statutorily
protected classes, such as pure research, may go unrewarded even
69
though they may be highly beneficial to society.
In regard to the economic or pragmatic justification for patent
protection, the monopoly-profit-incentive thesis is distinguished
from the moral reward-by-monopoly thesis in that it essentially pro61. Graham v.John Deere Co., 383 U.S. 1, 8 n.2 (1966) (quoting letterJefferson wrote to
Isaac McPherson (Aug. 1813)).
62. E. PENROSE, supra note 44, at 25-26 (noting significant practical and conceptual
problems such as preventing them from utilizing ideas when granting patents for unlimited
time); Breyer, The Uneasy Casefor Copyright. A Study of Copyright in Books, Photocopies, and Computer
Programs, 84 HARV. L. REV. 281, 322 (1970) (discussing authorities' ambivalence regarding
justifications for protections offered by patent and copyright).
63. E. PENROSE, supra note 44, at 24 (explaining that problems raised by specter of perpetual patent grant forced many commentators to turn to other arguments to justify patents);
ECONOMic REVIEW, supra note 17, at 22 (arguing that if this is natural right, it is impossible not
to recognize such rights for all time).
64. Turner, supra note 15, at 457 (noting different treatment afforded fundamental discoveries, which generally go unrewarded).
65. Id. (criticizing concept that those who use idea should compensate creator).
66. ECONOMIC REVIEW, supra note 17, at 23; see also F. SCHERER, supra note 19, at 443-50.
67. ECONOMIC REVIEW, supra note 17, at 23.
68. E. PENROSE, supra note 44, at 28-29 (noting that restrictions on use create economic
costs); ECONOMIc REVIEW, supra note 17, at 23.
69. E. PENROSE, supra note 44, at 29-30 (noting importance of scientific discoveries in
process of inventing marketable things).
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vides a bait rather than an equitable reward for inventions. 7 0 It is a
lottery-type of system in which the inventor receives not merely a
reward but also the lottery prize-a monopoly for a limited period
of time on that invention. The lottery system supposedly provides
the necessary incentives for possible profits well in excess of the investment required to create that invention. 7 1 An argument against
this thesis, however, is that a lottery system is not required because
many inventions will be made regardless of whether a patent system
exists. Moreover, the inventor's head-start already serves as an incentive to invent. Another argument against this thesis is that competition may duplicate research in the same invention, which is
wasteful because only the first inventor receives the patent. 72
The exchange-for-secrets thesis posits that society will be denied
the benefits of some inventions, either perpetually or for a certain
period of time, unless a patent incentive is provided. 73 This thesis
begs the question: if one can keep the invention secret, why is patent protection needed in the first place? 74 Many inventors cannot
keep their inventions secret for extended periods of time, and
others may independently make and disclose the same invention. 75
Moreover, inventors may willingly disclose their inventions for
other incentives short of exclusivity, such as a head-start, prizes, or
awards.
Kitch has recently proposed another thesis justifying the grant of
patents, known as the prospect theory. 76 Kitch argues that the reward theory offers an incomplete view of the functioning of the patent system. 7 7 He maintains that the patent system performs a
prospect function, defined as an opportunity to develop a known
technological possibility. 78 By performing this function, Kitch asserts, the patent system ensures the efficient allocation, management, and communication of technological opportunities by
providing an invention exclusive and publicly recorded ownership
shortly after its discovery. 79 Kitch analogizes the United States min70. ECONOMIC REVIEW, supra note 17, at 23 (stating that thesis is independent ofjustness
of reward).
71. Id. at 24; F. SCHERER, supra note 19, at 389.
72.
ECONOMIc REVIEW, supra note 17, at 23.
73. E. PENROSE, supra note 44, at 31-32 (discussing social contract theory and costs of
secret inventions).
74.
ECONOMIC REVIEW, supra note 17, at 23.
75. E. PENROSE, supra note 44, at 33 (adding that because patent systems entail such
extensive litigation costs, inventions are patented only when secrecy impossible).
76. See Kitch, supra note 20, at 266.
77. Id. (defining conventional view of patent system as device that allows inventors to
capture returns from their creations).
78. Id.
79. Id.
1989]
INVENTION PROTECTION
1111
eral claims system for public lands in the western portion of the
country to the patent system.8 0 The essence of the prospect thesis
appears to be that, because technological information is valuable,
the most efficient way of dealing with such information is to treat it
as property.8 1 Troubled by the proposition that the thesis would
also apply to any technological information having value, even that
which is not patentable, Kitch insists upon a "substantial novelty"
82
requirement for treating such information as patentable.
Kitch asserts that the United States mineral claims system did not
result in under-utilization of the exclusive claims. Rather, it generated an optimal level of investment in prospecting.8 3 Because mineral output is normally considered to have a horizontal demand
curve, Kitch concludes that the normally assumed negative curve for
the output of patented inventions may not hold when the prospect
function is taken into account.8 4 With respect to many patented inventions, competition exists with respect to equivalent products or
processes. 8 5 Taking into account the prospect function, Kitch concludes that such patents protect the important class of inventions
and may perform useful social functions even though they have little
value to their owners.86
These patents presumably have value to society because they
would not have been made but for the patent system. The competitive atmosphere resulting from a horizontal demand curve is the
reason these inventions have little value to their owners. Scherer
agrees that inventors would be unwilling to pursue inventions that
involve high development costs in exchange for only a small poten80. Id. at 271 (finding mineral claim system permitted one who found mineralization on
public land to file claim giving exclusive right to develop claim while allowing government to
retain ownership of public land).
81. Id. at 275 (citing R. POSNER, ECONOMIC ANALYsIs OF LAw 27-31 (2d ed. 1977) as
providing general discussion of economic theory of property rights).
82. Id. at 283-84 (noting that truly new information should be patented because, by definition, it has not been fully developed).
83. Id. at 274. Kitch was not the first to recognize the analogy between patent rights and
mineral rights. The historical interrelationship of these rights appears in the early history of
patents. See Mandich, supra note 21, at 171 (noting similarity between Venetian patent practice and mineral grants). Mandich also observed that one of the problems associated with
mineral grants was the large size of the zone reserved for the grantee, which resulted in
under-utilization of the claim. Id. The size of the grant eliminated neighboring competitors
and was justified on the basis of the heavy investment required to operate the claim. Id. at
171-72. In the context of efficiency, there was under-utilization because of the scope of the
exclusive grant. Id. at 172 n.21. Moreover, grants of monopolies during this period were
justified to achieve better control over the subject of a monopoly rather than as a reward or
compensation. Evidently, at the time, monopoly grants were granted to organizations or enterprises rather than to individuals. Id. at 171.
84. Kitch, supra note 20, at 274-75.
85. Id.
86. Id. at 289.
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tial for exploitation. 8 7 Scherer contends that abolishing the patent
system would merely deprive society of inventions with low bene88
fit/cost ratios.
It is extremely difficult to quantify the net social benefits attributable to the patent system.8 9 Nonetheless, although not conclusive,
studies have evaluated the various costs and benefits associated with
the patent system. 9 0 The various costs associated with a patent system can be summarized as follows: costs associated with the under
utilization of the protected invention; 91 costs associated with avoiding the protected invention-"inventing around; ' 92 costs associated
with blocking alternative solutions-blocking or defensive patents; 93
87. See F. SCHERER, supra note 19, at 488.
88. Id. (basing answer on implications from analysis conducted to date); see also McFetridge & Smith, Patents, Prospects, and Economic Surplus: A Comment, 23J. LAw & ECON. 197, 203
(1980) (explaining that prospect features do not assist market participants seeking to economize common property resources). McFetridge and Smith analyze the prospect function of
patents with respect to an economic mbdel and conclude that the approach is not useful in
assessing the merits of our patent system. Id. at 203. Kitch, however, contends that McFetridge and Smith omitted transaction costs from their economic model and that the property
nature of patents will lower such costs. See Kitch, Patents, Prospects, and Economic Surplus: A
Reply, 23J. LAW & ECON. 205, 205 (1980); see also Merges, Commercial Success and Patent Standards: Economic Perspectiveson Innovation, 76 CALIF. L. REV. 803, 838-42 (1988) (analyzing prospect theory).
Without questioning the transactional efficiency achieved by property owners (whether
Blackacre or a patent), this function rejuvenates the natural law thesis by substituting the
"economic man" "for moral man." See R. POSNER, ECONOMIC ANALYSIS OF LAw 27-31
(2d ed.
1977). A similar qualification of substantial novelty is found in the French rights of man patent statute of 1791, in which the natural right was extended to grant patents as property only
to inventors of new industrial innovations. See supra notes 40-42 and accompanying text (discussing general underlying principles of French statute).
89. Priest, What Economists Can Tell Lawyers About Intellectual Property, 8 REs. L. & ECON. 19,
21 (1986) (finding that economists provide little assistance to lawyers seeking to enforce or
interpret intellectual property law); see also F. SCHERER, supra note 19, at 444 (hypothesizing
decreased invention development costs); ECON. REV., supra note 17, at 80 (discussing benefits
of present United States patent system); Silverstein, Sharing United States Energy Technology with
Less Developed Countries: A Modelfor InternationalTechnology Transfer, 12 J. INT'L L. & ECON. 363,
369 (1978) (stating that no objective measure is available to gauge effects of free market on
inventive effort).
90. See, e.g., F. SCHERER, supra note 19, at 442-54 (discussing cost savings available to
society if patent system only applied to inventions that it induced); ECON. REV., supra note 17,
at 56-66 (detailing studies of benefits and problems with current patent system); Peckham,
supra note 17, at 391-400 (weighing patent costs and benefits in promoting invention but
decreasing market efficiency by restricting access); Dale & Hantoon, A Cost-Benefit Study of the
Domestic and InternationalPatent Systems, 2 IDEA 351, 356-83 (1967) (summarizing various studies); Turner, supra note 15, at 453-55 (stating that patent monopoly progressively leads to
restrictive utilization of new ideas).
91. Turner, supra note 15, at 454-55 (explaining that patent monopoly restricts use of
new knowledge well below social ideal). This is so, Turner states, even if the knowledge is
made available by licensing, because it still comes at a price. Id. at 455.
92. Id. at 455 (arguing that patent monopolies force competitors to find non "infringing" ways to obtain similar results). While some new knowledge may be gained in the process, the effort will more than likely be wasteful in that the research resources could have
attacked unsolved problems. Id.
93. Id.
19891
INVENTION PROTECTION
1113
over-investment costs in applied as compared to basic research; 9 4
increased costs of making inventions in heavily p'atent-protected
fields; 95 administrative costs of operating a patent system; 9 6 and
costs associated with abuses known to arise from the patent
97
monopoly.
On balance, whether the benefits to society in having more inventions because of the patent system outweigh the corresponding
costs depend on the validity of two fundamental propositions that
underlie the patent system. Professor Turner explained these propositions as follows: first, that the patent system encourages more
invention and innovation than our economic system would otherwise provide; and second, that a statutory monopoly is the best inducement for inventors under a patent system. 98 With respect to
the first proposition, if the United States needs more inventions,
and it is submitted that it does in view of its technological decline,
then the special inducement provided in the patent system should
promote inventions that would not otherwise be made, known as
patent-induced inventions. Providing a special inducement for inventions that would be made irrespective of the patent system,
known as nonpatent-induced inventions, is uneconomic and adds to
the costs of the patent system. In other words, there should be a
link between the special inducement provided by the patent system
and the creation of inventions.
The second proposition-that the best incentive for creating inventions is exclusivity-is not incontrovertible. 9 9 It is possible that
alternative incentives, such as prizes, awards, and tax subsidies,
would provide an adequate number of inventions at a lower cost to
society.10 0 On the other hand, the patent grant as a property inter94. Id. (explaining that given patent systems' standards, basic research is much less likely
to produce what law will patent). Turner points out, however, that this would not be necessarily true if the patent system increased the resources devoted to research so much that the
resources spent on basic research were absolutely greater. Id. He concludes, nonetheless,
that the patent system cannot properly allocate research resources. Id.
95. Id. (discussing stifling effects of heavily patented field on further research and development). A large number of existing patents in one area lessens the probability of finding
non-infringing patents. Id. The prospect for profit is substantially reduced. Id.
96. Id. at 454.
97. Id. at 455 (describing monopoly power that has gone well beyond inherent powers of
patent).
98. Id. at 450-51 (noting that neither proposition is free from doubt, especially theory
that monopoly serves as best inducement for inventors).
99. Id. at 451; see also F. SCHERER, supra note 19, at 447 (explaining that business firms
may invest, notwithstanding patent protection, if natural limitation lags are substantial, if major competition advantages exist from being first in market with new product, or if market is
oligopolistic).
100. See Turner, supra note 15, at 451 (discussing inducements for investors within framework of patent system).
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est, whose principal incidents are exclusivity and transferability,
provides the well-known economic efficiency associated with property.' 01 In view of the long tradition of time-limited exclusivity, in
accord with the constitutional mandate, it seems more practical to
ask whether altering the term of exclusivity might provide an appropriate special incentive and increase the yield of patent-induced inventions. While this question will be answered below, 102 it is first
necessary to determine whether the present patent requirements effectively promote a high yield of patent-induced inventions compared to all other inventions protected under the present system.
II.
PATENT-INDUCED INVENTIONS WITHIN THE PRESENT SYSTEM
A.
Economic Importance
With particular clarity, Scherer identifies the economic importance of differentiating between patent-induced and nonpatent-induced inventions. Granting patent protection to inventors who
would have introduced their products without such inducement imposes unnecessary societal restrictions.1 03 Thus, an evaluation of
the patent system involves the difficult balancing of these social
losses from unnecessary patents against the social benefits derived
from inventions that require patent inducement. 04 The United
States and most other nations have concluded as a matter of public
policy that the patent system produces a net benefit. 105 That conclusion is not challenged here. Rather, this article questions
whether the ratio of patent-induced inventions to nonpatent-induced inventions may be increased by restructuring the incentives
provided by a patent system.
Scherer identifies two classes of inventions that may be categorized as patent-induced. The first type comprises inventions that
have a low benefit/cost ratio.' o 6 These inventions provide a relatively low benefit to their producer in relation to the relatively high
cost of their creation. 0 7 A principal reason for the relatively low
101. See R. POSNER, supra note 88, at 27-31 (explaining that consumers incur costs to
achieve rewards, and exclusivity maximizes incentive while proprietary involvement leads to
greater efficiency).
102. See infra notes 225-32 and accompanying text (outlining costs, benefits, and legal
analysis of length of exclusivity).
103. F. SCHERER, supra note 19, at 443-44.
104. Id.
105. See 2 J. BAXTER, WORLD PATENT LAW AND PRACTICE xvii-xix (1988) (listing 172 countries that provide patent protection).
106. See F. SCHERER, supra note 19, at 448 (arguing that innovation with low potential
benefits in relation to costs will need lure of patent protection).
107. Id.
1989]
INVENTION PROTECTION
1115
benefit may be the availability of competing inventions (patented
and unpatented) that provide substantially equivalent utility. Thus,
inventions of this class have a relatively horizontal demand curve.
As previously mentioned, Scherer disagrees with Kitch regarding
the societal benefits of granting patent protection on such
inventions. 108
The second category of inventions identified as patent-induced by
Scherer, consists of the economically important class of "revolutionary" inventions. Without a patent system, these inventions, which
produce genuine revolutions in consumption or production, may be
lost or seriously delayed because their support fits uncomfortably
within the rational cost/benefit analysis. 10 9 Black and white televisions and xerographic photocopying machines are examples of this
class of invention.' 1 0 Although the potential benefits to the inventor of revolutionary inventions are high, there are correspondingly
high and unpredictable costs associated with their development,
thereby making the ultimate cost/benefit evaluation uncertain." 1
In this instance, the patent system should provide a special incentive
for committing significant resources to high-risk ventures whose
outcome may range from a truly revolutionary invention to a failed
experiment. While the loss of inventions having a low benefit/cost
ratio may be slight, the same may not be said of revolutionary inventions, which, while rare, make significant differences in the efficiency
11 2
of production or the quality of life.
Hence, if patent protection could be restricted to revolutionary
inventions, the system would produce a net benefit to society. This
may be the case even if the low benefit/cost category of patent-induced inventions were also protected. Problems arise, however,
with respect to other classes of inventions, such as the high benefit/cost ratio inventions-those inventions that produce relatively
high economic returns to the developer for a relatively low investment. These inventions include the so-called serendipitous or spinoff inventions, in which an investment directed toward a particular
problem yields an unexpected solution to another problem." 13 The
108. See supra text accompanying notes 87-90 (explaining Scherer's view that abolishing
patent system would only deprive society of low benefit/cost inventions).
109.
F. SCHERER, supra note 19, at 448.
110. Id.; S. GEE, supra note 2, at 161 (concluding that "major American innovations such as xerography, instant photography, transistors, lasers, synthetic textile fibers, and the
airplane - are revolutionary in their impact on today's society").
111. F. SCHERER, supra note 19, at 448-49 (citing lag problems between inception and
commercialization, and technological and market uncertainties).
112. Id. at 454 (explaining impact of xerography).
113. The term serendipity was coined by Horace Walpole, who, in reference to the fairy
tale "The Three Princes of Serendip," wrote to a friend that these princes were "always mak-
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discovery of TEFLON® coating while experimenting with refrigeration gases is a vivid example of serendipity. 114 It may be argued that
but for the patent system the developer would have suppressed this
invention. Nevertheless, an enterprise does not normally make a
profit by suppressing inventions. The incentive of lead-time and potential trade secret protection arguably may provide adequate incentive for the developer to place the product on the market without
the exclusivity of the patent system. Consequently, society would
only have to bear the cost of exclusive control by one producer for
the period of time it would take for competitors to duplicate the
invention.
The analysis is less clear when applied to inventions with benefit/cost ratios ranging between high and low. It would appear, however, that most inventions lost or delayed due to the absence of
patent protection are at the low benefit/cost margin.1 15
B.
PatentabilityRequirements as Discriminators
Starting five centuries ago, with the Venetian patent statute, all
patent statutes have and continue to impose certain formal and subing discoveries, by accidents and sagacity, of things they were not in quest of." Serendip was
also an ancient name for Sri Lanka (Ceylon). G. SHAPIRO, A SKELETON IN THE DARKROOM:
STORIES OF SERENDIPITY INSCIENCE vii (1986). Examples of serendipitous inventions and discoveries are legion: Roentgen - X-rays; Fleming - penicillin; Goodyear - vulcanization of
rubber; Edison - phonograph record player; Bessemer - steel making; Daguerre - photographic process. See id. at 19-20; D.S. HALACY, JR., SCIENCE AND SERENDIPITY 91-93 (1967); A.
GARRETT, THE FLASH OF GENIUS 82-85 (1963); Cannon, The Role of Chance in Discovery, 50 SCIENTIFIC MONTHLY 204 (1940) (mentioning Nobel's discovery of dynamite and Richet's discovery of allergies).
A spin-off invention is defined as "a collateral or derived product or effect: BY-PRODUCT
(household products that are [spin-offs] of missile research)." WEBsT R'S NINTH NE.w COLLEGIATE DICTIONARY 1112 (1983). See Stice, Introduction, in UTILIZING R&D BY-PRODUCTS 8 0.
Blood ed. 1967) (explaining term of research by-product and, to some degree, terms spin-off
and fallout have been used to define residual, dormant, and unused technology); see also
Howick, The NASA Technology Utilization Program, in UTILIZING R&D BY-PRODUCTS 69, 78-82
(describing NASA program and examples of its spin-off inventions, including inorganic paint,
walking wheel chair, maintenance-free lubricated bearings, and sight controlled switches).
Some recent examples of commercial products arising out of the space program include
smoke detectors, Velcro, material designed for space suits, enclosed football stadiums, shopping malls, and hang gliders. See ADWEEK, Mar. 21, 1988, at 26-27. In this Article, serendipitous includes spin-off, by-product, and fallout inventions.
114. A. GARRETT, supra note 113, at 14-15 (describing discovery of TEFLON). In 1938, a
cylinder of Freon stored in a dry-ice bin was discovered to contain a white solid material that
had amazing qualities. Id. The patent has expired, but DuPont still holds the registered
trademark TEFLON. Id.; see Teflon, at Age 50, Will Stick Around, Chicago Tribune, Apr. 11,
1988, § 4, at 3, col. 2; see also Gatty, Mishaps That Mothered Invention; Products Created by Accident,
75 NATION'S BUSINESS 58 (1987) (listing Slinky® toy, comflakes, Coca-Cola®, Scotchguard®,
Post-It Notes®, and Gore-Tex® as accidental inventions).
115. See F. SCHERER, supra note 19, at 448 (explaining that enterprises are not likely to
invest in low benefit/cost projects unless there is a possibility of obtaining protection on the
specific embodiment developed). Scherer argues that most innovations that require the lure of
patent protection will have a low potential benefit relative to development costs. Id.
19891
INVENTION PROTECTION
1117
stantive requirements for the grant of a patent. A sine qua non of
patentability is the requirement that the invention fall within the
classes of invention defined as protectable under the statute.1 1 6 If
an invention does not meet this subject-matter requirement, it is excluded as a matter of policy, regardless of its quality. If an invention
falls within a protectable class, then it still must meet certain quality
requirements. The invention must be new, 11 7 useful, 118 and nonobvious.' 1 9 These requirements will be considered to determine
whether they, individually or collectively, differentiate between inventions that are patent-induced and those that are not.
1.
Statutory class/utility
Although the statutory class and utility requirements are separate
and the failure to satisfy either will bar the grant of a patent, they are
both considered here because each has a negative impact on the
ability of the patent system to discriminate between patent-induced
and nonpatent-induced inventions. Indeed, each requirement restricts or even eliminates the patentability of revolutionary inventions, which are the most important class of patent-induced
inventions.
Section 101 sets out the statutory class and utility requirements
for patentability:
Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and
useful improvement thereof, may obtain a patent therefore, sub120
ject to the conditions and requirements of this title.
Any invention that does not fall within the four statutory lassesprocess, machine, manufacture, or composition of matter-is excluded, whether it is new, useful, or nonobvious.
116. See 35 U.S.C. § 101 (1982) (excluding all subject matter that is not process, machine,
manufacture, or composition of matter); 42 U.S.C. § 2181 (a) (1982) (prohibiting patent protection for inventions "useful solely in the utilization of special nuclear material or atomic
energy in an atomic weapon"). Internationally, a large number of foreign countries exclude
certain products from patentability. 1 S. LADAS, supra note 43, § 184 (noting prohibition in
certain countries for chemical products, foodstuffs, and pharmaceutical products and compositions); see also 2AJ. BAXTER, supra note 105, App. I (indicating patentability of chemical and
pharmaceutical inventions in various countries).
117. 35 U.S.C. § 102 (1982) (describing circumstances in which lack of novelty bars issuance of patent).
118. 35 U.S.C. § 101 (1982) (providing patent for useful invention and for useful improvement of existing process, machine, manufacture, or composition of matter).
119. 35 U.S.C. § 103 (1982) (requiring difference between matter to be patented and
prior art be such that subject of patent must not be obvious to one of ordinary skill in art at
time of invention); see infra notes 137-75 and accompanying text (discussing qualification
requirements).
120. 35 U.S.C. § 101 (1982). See generally I D. CHisuM, PATENTs §§ 1.01-1.03 (1988) (discussing subject matter in detail); id. §§ 4.01-4.04 (discussing utility requirements in detail).
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The controversy has raged for years over wheiher computer programs constitute patentable subject matter.' 2 ' The Supreme Court
has left the question open, resulting in further legal ambiguity and
adding to the economic uncertainty that already restricts revolutionary inventions. In Gottschalk v. Benson, 12 2 while the Court held that
an algorithm was not statutory subject matter, it emphasized that
the decision did not preclude patentability for computer programs.' 23 In Parker v. Flood,' 24 a process for computing an alarm
limit for the catalytic conversion process was held not to be statutory subject matter. At the same time, a process for operating a
machine that utilized a computer program for solving a formula was
held to be statutory subject matter in Diamond v. Diehr.125
Another controversy, which has moral and ethical overtones, is
whether living things can be the subject matter of inventions. 126 In
Diamond v. Chakrabarty,12 7 the Supreme Court held that micro-organisms were statutory subject matter. The Court referred with approval to the House Report accompanying the 1952 Patent Act,
121. See, e.g., Maier, Software Protection-IntegratingPatent, Copyright and Trade Secret Law, 69
J. PAT. & TRADEMARK OFF. SOC'Y 151, 158 (1987) (contending patent is appropriate protection for intellectual property embodied in functional aspects of software); Chisum, The Patentability ofAlgorithms, 47 U. PrTr. L. REv. 959, 1013-14 (1986) (arguing that patent protection for
algorithms provides needed incentive for software development); Becker, Means-Plus-Function
Claims in Computer Related PatentApplications Within the United States, 5 COMPUTER L.J. 25, 34-38,
48-49 (1984) (discussing difficulty of drafting computer related claims and advocating use of
means-plus-function language); Samuels, The Patentability of Computer-Related Inventions, 6
CORP. L. REv. 144, 151-53 (1983) (discussing Diamond v. Diehr, 450 U.S. 175 (1981) in which
parent was granted patent for process incorporating computer program and predicting patentability of programs will continue on ad hoc basis); Note, Patentability of Computer-Related
Inventions: A Criticism ofthe PTO's View on Algorithms, 54 GEO. WASH. L. REv. 871, 905-09 (1986)
(advocating less rigid standards for patentability of computer programs and elimination of
PTO's contention that all unknown algorithms are "obvious").
122. 409 U.S. 63 (1972) (disallowing patent for mathematical formula with no practical
application except in connection with digital computer).
123. Gottschalk v. Benson, 409 U.S. 63, 71 (1972).
124. 437 U.S. 584 (1978) (affirming decision of Court of Patent Appeals that method of
calculation using mathematical formula even for specific purpose is not eligible for patent
protection).
125. 450 U.S. 175 (1981).
126. See, e.g., Dresser, Ethical and Legal Issues in PatentingNew Animal Life, 28JURuMETmCSJ.
399 (1988) (examining potential benefits and risks of animal patenting in context of broader
social and ethical issues); Trzyna, Are Plants Protectable Under the Design PatentAct?, 69J. PAT &
TRADEMARK OFF. Soc'Y 487, 500 (1987) (contending design patent issued under Design Patent Act, 35 U.S.C. § 171 (1982), is appropriate protection for ornamental characteristics of
plants); Daus, Patentsfor Biotechnology, 26 IDEA 263, 263-64 (1986) (examining evolution of
patents for biotechnology from Plant Protection Act to micro-organism patent in Chakrabarty);
Ihnen, PatentingBiotechnology: A PracticalApproach, 11 RUTGERS COMPUTER & TEcH. L.J. 407
(1985) (discussing legal and practical considerations involved in biotechnological patent
claims); Note, Patents, Plants, and Biotechnology-Policy and Law, 14 W. ST. U.L. REv. 529, 540
(1987) (explaining importance of full utility patent protection for plant breeders to development of essential food products).
127. 447 U.S. 303 (1980) (holding human-made micro-organism patentable under 35
U.S.C. § 101 provision for new and useful manufacture of composition of matter).
1989]
INVENTION PROTECTION
1119
stating that Congress intended statutory subject matter to "include
anything under the sun that is made by man." 128 The Patent and
Trademark Office has taken this literally and extended Chakrabartyto
find that both plants' 29 and animals 130 constitute statutory subject
matter under section 101. Nonetheless, there is still uncertainty as
to whether and to what extent Congress will intervene to regulate
genetically engineered living things.' 3 ' Moreover, the Supreme
Court made clear in Chakrabarty, that the "everything under the
sun" standard does not mean that section 101 has no limits or that it
embraces every discovery. In fact, the laws of nature, physical phe13 2
nomena, and abstract ideas have been held not patentable.
Concerning the utility of inventions, the Supreme Court held in
Brenner v. Manson' 3 3 that a process for producing a chemical compound that had no known use except as a subject for further scientific inquiry was not useful within the meaning of section 101.134
Indeed, the Court raised the utility requirement to a constitutional
level, pointing out that because the basic quid pro quo contemplated by the Constitution and the Congress for granting a patent is
the benefit derived by the public, unless a claim presents specific
current benefit, there is insufficient justification for an applicant to
128. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1982) (quoting H.R. REP. No. 1923,
88th Cong., 2d Sess. 6 (1952)).
129. See Ex parte Hibberd, 227 U.S.P.Q. (BNA) 443 (Bd. App. & Int. 1985) (holding that
maize plant and maize seed constitute statutory subject matter under § 101 for utility patent);
see also Plant Variety Protection Act of 1970, 7 U.S.C. §§ 2321-2583 (1982) (granting protection to certain sexually reproduced plants, not encompassing bacteria); cf.35 U.S.C. §§ 161164 (1982) (granting right to exclude others from reproducing or selling only asexually reproduced plants). In Hibberd, the Board rejected the examiner's contention that the Plant Patents
and Plant Variety Protection Act precluded protection under § 101. Ex parte Hibberd, 227
U.S.P.Q. (BNA) 443 (Bd. App. & Int. 1985).
130. See Ex parte Allen, 2 U.S.P.Q.2d (BNA) 1425 (Bd. App. & Int. 1987) (holding that
Polyploid Pacific oysters are statutory subject matter under § 101 for utility patent); 1077
OFF. GAZ. PAT. OFFICE OG 24 (1987) (recording notice by Commissioner of Patents and
Trademarks that non-human multicellular living organisms, including animals, are patentable
subject matter under § 101). The PTO agreed to an eight-month voluntary moratorium on
granting such patents. House PassesAnimal PatentBill, 36 Pat. Trademark & CopyrightJ. (BNA)
485 (1988); see also Patent and Trademark Office Issues First Animal Patent, 35 Pat. Trademark &
CopyrightJ. (BNA) 508 (1988) (reporting that after moratorium, PTO granted utility patent
on genetically engineered mouse that is highly sensitive to cancer-causing chemicals and will
quickly develop tumors in response to small quantities of such chemicals).
131. See 36 Pat. Trademark & Copyright J. (BNA) 485 (1988) (reporting that, in 1988,
House of Representatives passed Transgenic Animal Patent Reform Act, H.R. 4970, 100th
Cong., 2d Sess., 134 CONG. REC. H7436-39 (1988), which would have amended 35 U.S.C. to
clarify that human beings are not statutory subject matter and exclude from infringement
farmers who reproduce, use, or sell patented animals).
132. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (noting that previously undiscovered minerals, wild plants, and formulae describing natural phenomena are not patentable).
133.
383 U.S. 519 (1966).
134. Brenner v. Manson, 383 U.S. 519, 534 (1966) (arguing that to grant patent to invention with no specific utility creates monopoly of knowledge which is granted only if statute
clearly demands it).
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preempt a broad field. 13 5 On the other hand, if this quid pro quo
precludes the patentability of some revolutionary inventions, such a
substantial utility requirement may ill-serve the constitutional purpose. The costs associated with a broad scope of protection may be
offset by the benefit derived from a revolutionary invention induced
by the patent system. Justice Harlan, dissenting in Brenner, recognized such a standard's potential exclusionary impact and expressed
36
concern about the impact it may have on chemical research.
In summary, even after accounting for the liberal standard of
Chakrabarty, the subject matter requirement of section 101 still tends
to exclude revolutionary inventions at the margin of being categorized as laws of nature, physical phenomena, or abstract ideas. Similarly, the substantial utility standard enunciated in Manson probably
excludes revolutionary inventions that do not fit nicely into existing
patterns of production or that do not have an established market.
Conversely, the subject matter and utility requirements have little, if
any, exclusionary effect on conventional inventions-whether non37
patent-induced or low benefit/cost patent-induced.'
2.
Novelty/nonobviousness
While the statutory subject matter and utility requirements may
have an exclusionary effect on revolutionary inventions, the quality
requirements of novelty and nonobviousness, by definition, would
not preclude the patenting of revolutionary inventions. The better
question is whether either of these quality requirements excludes
nonpatent-induced inventions.
Any quality requirement bars certain inventions from receiving
patents. The exclusionary effect increases, depending upon
whether the quality requirement is broadly or narrowly interpreted.
With respect to novelty, very few inventions would be excluded
under a subjective novelty or originality standard. 38 Conversely,
many more inventions would be excluded by an absolute worldwide
135. Id. at 534-35.
136. Id. at 539. Justice Harlan explained that while individual invention;, taken alone,
may not have utility as that term was defined by the majority, the discovery permits others to
move closer to a commercially useful item. Id. In light of the necessity to publicize basic
research, Justice Harlan argued that uncertainties should be resolved in favor of disclosure
and the patent grant. Id.
137. Such inventions are conventional in the sense that they tend to fit into established
production and marketing channels.
138. See 35 U.S.C. § 102(a), (b), (e), (g) (1982) (describing patent novelty requirement).
Under the present system, the fact that an invention is new to the inventor is not sufficient. Id.
§ 102(b), (e), (g). Moreover, section 102 excludes persons who did not invent the subject
matter sought to be patented. Id. § 102(0; see also 1 D. CHisuM, supra note 120, §§ 3,01-3.08
(discussing novelty requirement in detail).
1989]
INVENTION PROTECTION
1121
novelty requirement. In section 102, the United States chose a middle course between these two extremes by excluding inventions that
were used, patented, or published in the United States or other
countries.' 3 9 Accordingly, a patent will not be denied on the
ground of novelty, even though the invention had been known or
used by others in a foreign country, provided there is no public disclosure of the invention in a printed publication. 140 In other words,
the de facto lack of novelty in the invention-because it had been
known or used abroad-would be ignored in favor of dejure novelty,
which requires only that the invention has not appeared in a printed
publication. Whether the knowledge or use must be public also
bears on the scope of the exclusionary nature of the novelty requirement. In short, the novelty requirement provides a minimum litmus
of value to society; value that can be attributable to something new
that society is willing to fund.' 4 1 Still, novelty alone will not indicate
whether the patent system induced the creation of an invention.
If an invention is not anticipated by prior art-that is, the invention is de jure new-the invention still must meet the nonobvious
standard in order to receive patent protection. Section 103 provides that an invention cannot be patented if the invention, although
different from prior inventions, was obvious to an ordinary person
skilled in that art. 14 2 Prior to the enactment of section 103, patentability was based upon the statutory requirements of novelty and utility and the judicially mandated invention requirement. 14 3 Section
103 was crafted to eliminate the perceived subjective nature of the
invention requirement and to substitute in its place an objective
nonobvious standard.
The patent bar was enraged 144 by the Supreme Court's interpretation of the invention standard in Cuno EngineeringCorp. v. Automatic
Devices Corp.14 5 and Great Atlantic & Pacific Tea Co. v. Supermarket
139.
140.
See 35 U.S.C. § 102(a) (1982).
See 35 U.S.C. § 102(b), (g) (1982) (permitting patent protection unless, (a) invention
is already patented, published, in public use, or on sale in United States, or (b) another person has already made invention and has not abandoned, suppressed, or concealed it).
141. See Kitch, supra note 20, at 283-84 (discussing how novelty of device may be valuable
to society).
142. 35 U.S.C. § 103 (1982). See generally NONOBVlOUSNESS - THE ULTIMATE CONDITION
OF PATENTABILITY (J. Witherspoon ed. 1980) (compiling numerous articles concerning § 103).
143.
See Rich, The Vague Concept of "Invention" as Replaced by Section 103 of the PatentAct, in
NONOBVIOUSNESS, supra
note 142, at 1:401, 1:489-16 (discussing events leading to judicial
imposition of invention requirement); Mintz & O'Rourke, The PatentabilityStandardin Historical
Perspective: "Invention" to Section 103 Nonobviousness, in NONOBVsOUSNESS, supra note 142, at
2:201 (tracing historical development of invention requirement).
144. See Rich, How and Why Section 103 Came to Be, in NONOBVlOUSNESS, supra note 142, at
1:206 (stating discontent began with Supreme Court's 1941 decision invalidating patent in
Cuno Eng'g Co. v. Automatic Devices Corp., 314 U.S. 84 (1941)).
145. 314 U.S. 84 (1941).
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[Vol. 38:1097
Equipment Corp. (A & P). 14 6 In Cuno, the Court introduced, perhaps
gratuitously, the flash-of-creative-genius test.14 7 In A & P, the Court
spoke disparagingly of gadget inventions and concluded that courts
should scrutinize combination patent claims with an appreciation of
the difficulty and improbability of finding inventions from an assembly of old parts. 148 Complaints about the subjective application of
an invention standard are buttressed by McClain v. Ortmayer,149 in
which the Supreme Court stated that an invention is not defined by
its creator's creative intellect.' 5 0 In an attempt to provide some certainty to the definition of the word "invention," courts over the
years have developed various negative tests of inventions, that preclude patentability.15 1
An objective test of nonobviousness was enunciated as early as
1850 in Hotchkiss v. Greenwood.' 5 2 In Hotchkiss, the Court stated that
to satisfy the invention standard, a patent applicant had to show
greater ingenuity and skill than an ordinary mechanic in the same
trade.' 5 3 The Court diminished somewhat the objective application
of this standard by relying upon a negative rule of invention, which
stated that the mere substitution of one material for another did not
1 54
amount to invention.
The nonobvious standard can be traced to Thomas Jefferson,
who, while Secretary of State, served as a member of the Patent
Board along with the Secretary of War and the Attorney General.1 55
Distressed over having to spend his valuable time reviewing patent
applications for trivial devices, Jefferson proposed an amendment to
the patent statute that would have excluded obvious and unimpor146. 340 U.S. 147 (1950).
147. Cuno Eng'g Co. v. Automatic Devices Corp., 314 U.S. 84, 91 (1941) (stating that new
device cannot be patented, regardless of usefulness, if it does not demonstrate flash of creative brilliance).
148. Great At. & Pac. Tea Co. v. Supermarket Equip. Corp. (A & P), 340 U.S. 147, 152
(1950) (emphasizing that patents cannot be sustained if effect will subtract resources formerly
available to skilled artisans).
149. 141 U.S. 419 (1891).
150. McClain v. Ortmayer, 141 U.S. 419, 427 (1891) (rejecting fixed principles and general broad definition of inventiveness).
151. See Deller, The Problem ofInvention in the Law of Patents, 28J. PAT. OFF. Soc'v 797, 802
(1946) (listing 14 negative tests of patentability, including substitution of materials, reversal
of parts, change of location, size, degree and form, and aggregation of parts).
152. 52 U.S. (I1 How.) 248 (1850).
153. Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248, 267 (1850) (concluding that necessary improvement is work of mechanic not inventor).
154. See id. (stating that improvement of device by person does not make him inventor,
just skillful mechanic).
155. See Act of April 10, 1790, ch. 7, 1 Stat. 109-10 (current version in scattered sections
of 35 U.S.C.) (establishing "Commissioners for the Promotion of the Useful Arts"); see also
Graham v. John Deere Co., 383 U.S. 1, 7 (1966) (discussing history of United States patent
system). In addition, Jefferson was the author of the 1793 Patent Act. Id.
1989]
INVENTION PROTECTION
1123
tant inventions. 1 5 6 Jefferson's proposal was not enacted, and it took
a century and a half before section 103 was codified in 1952.
The Supreme Court did not interpret the nonobvious standard of
section 103 until 1966. In Graham v. John Deere Co., 1 57 the Court
stated that, while the ultimate question of patentability was one of
law, nonobviousness still lent itself to factual inquiry.' 5 8 The Court
then set out a three-part test for determining nonobviousness under
section 103. First, one must determine the scope and content of the
prior inventions. Second, the reviewer must distinguish between
the prior art and the present invention, and finally, the factfinder
must determine the level of skill used to create the new invention. 15 9
The Court also concluded that Congress did not intend to change
the level of patentable invention and that section 103 was intended
160
to codify Hotchkiss.
Any hopes that the invention standard had been forever replaced
by the nonobvious standard were soon dashed. Three years later, in
1969, in Anderson's-Black Rock, Inc. v. Pavement Salvage Co.,1 6 1 and
seven years after that in Sakraida v. Ag Pro, Inc., 1 62 the Court returned to the invention standard. Indeed, in Sakraida the Court
quoted approvingly from A & P regarding the difficulty and improb63
ability of creating an invention from parts of prior inventions.'
Moreover, the Court seemed to require a synergistic result for inventions, defining synergism as an effect greater than the sum of the
several parts taken separately.' 64 The impact of Anderson's-Black
Rock and Sakraida, however, has not been significant. The Court of
Appeals for the Federal Circuit, which exercises exclusive jurisdiction over patent appeals, essentially has ignored these decisions in
156. Rich, Laying the Ghost of the "'Invention" Requirement, in NONOBVIOUSNESS, supra note
142, at 1:503 (citing THE WRrITNGS OF THOMAS JEFFERSON, 1788-1792, at 279 (P.L. Ford ed.
1895)).
157. 383 U.S. 1 (1966).
158. Graham v. John Deere Co., 383 U.S. 1, 17 (1966) (explaining that each of § 103's
requirements, including nonobviousness, lends itself to factual inquiries).
159. Id. (noting also secondary considerations of commercial success, long felt but unsolved needs, and failure of others).
160. Id.
161. 396 U.S. 57 (1969). In this case, the Court held that combining a radiant-heat
burner, a spreader, and a tamper and screed on one chassis in order to solve the problem of a
cold joint on "blacktop" paving did not constitute an invention. Anderson's-Black Rock, Inc.
v. Pavement Salvage Co,, 396 U.S. 57 (1969). Rather, the petitioner merely constructed
known elements in the prior art on a single chassis, thus adding nothing to the nature and
quality of the previously patented radiant burner. Id.
162. 425 U.S. 273 (1976). In Sakraida, the Court denied patent protection for a waterflush
system designed to remove cow manure from the floor of a barn on the grounds that it was
merely a combination of old elements. Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976).
163. Id. at 281-82 (concluding that invention simply arranges old elements with each performing previously known function).
164.
See id. at 282.
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THE AMERICAN UNIVERsITY LAW REVIEW [Vol. 38:1097
favor of the three-part analysis ofJohn Deere.1 65 For all practical purposes, the nonobvious standard is applied in patent cases to the exclusion of a separate invention requirement. This practice is
expected to continue at least until the Supreme Court elects to exercise its supervisory authority over the Federal Circuit.
Presuming that the nonobvious requirement is objective and recognizing that objectivity is desirable in any standard involving legal
and financial risk, the question becomes whether the requirement
discriminates between patent-induced and nonpatent-induced inventions. Clearly the nonobvious standard eliminates certain inventions that pass the novelty test. Therefore, some low benefit/cost
ratio inventions that are patent-induced would be eliminated by this
standard, particularly if the inventions are detail inventions trying to
find a market slot among competing inventions having almost identical utility.' 6 6 At the other extreme, it appears that revolutionary
inventions have no difficulty satisfying the nonobvious standard or,
67
for that matter, the invention standard of A & P or even Cuno.1
There is, however, a serious question of whether and to what degree the nonobvious standard eliminates nonpatent-induced inventions, especially those with high benefit/cost ratios. An objective
determination that an invention is not obvious may have little relevancy to the question of whether it would have been created but for
the patent system. The same marginal exclusionary effect also applies to certain nonpatent-induced inventions. Denial of patent protection to these inventions would result in some net benefit to
society unless they were suppressed. If that happens, raising the
standard to exclude a higher percentage of nonpatent-induced inventions would increase this benefit with no loss of patent-induced
inventions to society, except perhaps for certain low benefit/cost
patent-induced inventions that are unable to meet the higher standard. Indeed, following this line of reasoning, one concludes that
the standard should be raised to increase the ratio of patent-induced
revolutionary inventions to all inventions. Before proceeding to
that conclusion, however, a brief analysis of the secondary considerations of nonobviousness may shed light on whether these indicia
165. See Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 959 (Fed.
Cir. 1986) (stating that court has rejected traditional notion of viewing patent as combination
of prior inventions with synergism); Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1540
(Fed. Cir. 1983) (stating that synergism is relevant when present but cannot be used to evaluate evidence for obviousness).
166. See supra notes 106-08 and accompanying text (discussing low benefit/cost
inventions).
167. See supra notes 109-12 and accompanying text (discussing substantial impact made by
revolutionary products in society).
19891
INVENTION PROTECTION
1125
inherently discriminate between patent-induced and nonpatent-induced inventions.
In an apparent attempt to buttress the objectivity of section 103,
the Federal Circuit has insisted that the district courts consider the
secondary considerations of nonobviousness referred to in John
Deere. 168 The Supreme Court in John Deere rather ambiguously
stated that the secondary indicia are relevant to determine obviousness or nonobviousness.1 69 In Anderson's-Black Rock and Sakraida,
however, the Court stated that these indicia alone would not satisfy
70
patent requirements.1
An invention's principal nontechnical indicia of nonobviousness
are long felt but unresolved need, commercial success, commercial
acquiescence, and recognition by experts.' 7' If a need is so clearly
felt, the maxim "necessity is the mother of invention," rather than
the patent system, is the primary inducing factor for the invention.
Hence, these indicia support a relatively high percentage of nonpatent-induced inventions. In addition, the need for a revolutionary
invention may not be so clearly felt, and others may not be searching for it as compared to an invention that eliminates a serious
shortcoming in a state-of-the-art product. On the other hand, if the
magnitude and quality of the research and development leading to
168. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983) (stating
that evidence from secondary considerations must be considered in determining obviousness). The Federal Circuit has mandated consideration of these secondary factors, and
failure to do so constitutes reversible error. Id. at 1539. The Federal Circuit's predecessor
court also mandated such consideration. See In re Mageli, 470 F.2d 1380, 1383 (C.C.P.A.
1973) (holding that obviousness is established by evidence, which must always be considered
and accorded appropriate weight); see also Graham v. John Deere Co., 383 U.S. 1, 17 (1966)
(explaining that secondary considerations courts must analyze include commercial success,
long felt but unresolved need, and failure of others).
169. Graham v.John Deere Co., 383 U.S. 1, 18 (1966).
170. See Sakraida v. Ag Pro, Inc., 425 U.S. 273, 287 (1976) (concluding that making process more convenient, producing desired result in cheaper and faster way, and enjoying commercial success is not enough to warrant patent); Anderson's-Black Rock v. Pavement Salvage
Co., 396 U.S. 57, 61 (196,9) (noting that more than successful venture is needed for invention); see also Great Ad. & Pac. Tea Co. v. Supermarket Equip. Corp. (A & P), 340 U.S. 147,
153 (1950) (stating that although device fills need and has enjoyed commercial success, patentability is not met by commercial success alone, rather one must show that device is indeed
invention). Both Sakraida and Anderson's-Black Rock cite to A & P for support.
171. See supra notes 168-70 and accompanying text (discussing secondary considerations
employed in determining nonobviousness for patentability); 2 D. CHIsUM, supra note 120,
§ 5.05 (discussing additional secondary elements, such as copying-laudatory statement by an
infringer, progress through the Patent and Trademark Office, and near simultaneous invention (negative indicator)); see also Merges, supra note 88, at 838-42 (discussing economic analysis of various indicia, especially commercial success); Walker, Objective Evidence of
Nonobviousness: The Elusive Nexis Requirement, 69J. PAT. OFF. SOC'Y (pts. 1-2) 175, 229 (1987)
(discussing objective evidence needed to support nonobviousness); Note, A Critique of the Use
of Secondary Considerationsin Applying the Section 103 Nonobvious Test for Patentability, 28 B.C.L.
REV. 357, 364-74 (1987) (discussing use of nontechnical indicia in applying nonobviousness
test). In Windsurfing Int'l, Inc. v. AMF Inc., 782 F.2d 995, 1000 (Fed. Cir.), cert. denied, 477
U.S. 905 (1986), the court held that copying another's invention indicates nonobviousness.
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an invention are taken into account in evaluating nonobviousness, 17 2 such evidence of quality and quantity will discriminate revolutionary inventions from high benefit/cost inventions, particularly
those of the serendipitous variety.
. Commercial success favors conventional inventions (i.e., not revolutionary and either patent- or nonpatent-induced), which find
ready channels for production and marketing. On the other hand,
revolutionary inventions, at the time they are evaluated for obviousness, may not have achieved significant market acceptance. In
sum, revolutionary inventions take significantly longer to achieve
1 73
commercial success than conventional inventions.
Acquiescence by competitors regarding the validity of a patent
174 It
often involves as much economic evaluation as legal analysis.
may be cheaper to avoid the patent or to take a license rather than
to challenge the patent. With respect to patents on revolutionary
inventions, potential competitors may be less likely to take licenses
because commercially producing a revolutionary invention often requires a large investment in technical development, productive capability, and market development. Moreover, the introduction of a
172. Quantity and quality of research have been relied upon to prove nonobviousness.
See Walker, supra note 171, at 232-33 (discussing cases in which patentees made optimum use
of evidence to support claim); Note, Subtests of "Nonobviousness ":A Nontechnical Approach to Patent Validity, 112 U. PA. L. REV. 1169, 1173-74 (1964) (using secondary considerations as support for patentability); Railroad Dynamics, Inc. v. A. Stucki Co., 579 F. Supp. 353, 367 (E.D.
Pa. 1983) (explaining that considering substantial amount of time and money expended on
developing invention, failure to uphold validity of patent could discourage future commitment of resources to inventive activities), aft'd, 727 F.2d 1506 (Fed. Cir.), cert. denied, 469 U.S.
871 (1984). Kitch originally questioned drawing an inference of nonobviousness from commercial success. See Kitch, Graham v. John Deere Co.: New Standardsfor Patents, 1966 Sup. CT.
REV. 293, 331-32. Kitch, however, recognizes its relevance in his prospect theory. See Kitch,
supra note 20, at 283 (recognizing relevance of success on prospect theory and admitting that
commercial success has bearing on patentability). But see Merges, supra note 88, at 837-42,
859-62 (criticizing use of commercial success to indicate nonobviousness because it rewards
innovation or commercialization of invention rather than invention itself).
173. See F. SCHERER, supra note 19, at 448 (discussing reasons why revolutionary inventions take more time to achieve commercial success). The time period from an invention's
conception to its commercialization is a generalized problem in the United States. A study of
500 significant innovations between 1953 and 1973 found that the period from conception to
commercialization was significantly longer in the United States and the United Kingdom than
in Japan and the Federal Republic of Germany. S. GEE, supra note 2, at 65-69. Examples of
long time delays between invention and commercialization include: automatic transmission
(1904-1937); cotton picker (1850-1942); magnetic recording (1898-1939); penicillin (19281944); radar (1904-1935); silicone (1904-1948); television (1905-1940); and xerography
(1937-1950). Kitch,supra note 20, at 272. See generallyJ.JEwKES, D. SAWERS & R. STILLERMAN,
THE SOURCES OF INVENTIoN 263-409 (1959). A recent example is the facsimile machine
originating in 1842. See Fax: 140 Years in the Making, Chicago Tribune, Nov. 9, 1988, § 7, at
26, col. 3 (detailing long history of facsimile development).
174. See EWP Corp. v. Reliance Universal, Inc., 755 F.2d 898, 907-08 (Fed. Cir. 1985)
(stating that licensing agreements are fallible guides to patentability determination, because
there are other reasons unrelated to nonobviousness, such as cost or mutual benefit, why
parties prefer licensing agreement).
1989]
INVENTION PROTECTION
1127
revolutionary invention may disrupt already established production
or marketing channels. Recognition by experts would certainly appear to favor revolutionary inventions. It is unclear, however,
whether this consideration eliminates many nonpatent-induced
inventions. Indeed, the costly class of nonpatent-induced inventions-high benefit/cost
inventions-may
receive
wide
75
recognition.
These secondary considerations tend to objectify the issue of obviousness, but they have little value in discriminating patent-induced from nonpatent-induced inventions. A possible exception
might be if the quantitative and qualitative investment in research
and development can be relied upon, which would increase the
number of patent-induced revolutionary inventions while excluding
high benefit/cost nonpatent-induced inventions.
C. Impact of Present System on Revolutionary Inventions
If a high ratio of patent-induced to nonpatent-induced inventions
is necessary for the efficient functioning of the patent system, and
revolutionary inventions are the economically important type of patent-induced inventions, then one can conclude that the present patent system does not provide adequate incentives for revolutionary
inventions. In fact, the system discriminates against them. The current statutory class and utility requirements for patentability have an
adverse impact on revolutionary inventions as compared to conventional inventions, which fit within well established production and
consumer patterns and which easily satisfy existing statutory class
and utility standards. Although the novelty and nonobviousness requirements do not discourage revolutionary inventions, they do inhibit low benefit/cost patent-induced inventions. At the same time,
however, these statutory requirements do not discriminate against
high cost/benefit nonpatent-induced inventions.
Assuming the foregoing analysis is correct, providing special incentives for patent-induced inventions, particularly revolutionary in175. See United States v. Adams, 383 U.S. 39, 52 (1966) (stating that Court relied upon
recognition by experts to determine patentability). Indeed, the Court in Adams cited the fact
that experts, who originally expressed disbelief in the invention, later recognized its significance and even patented improvements on the same system. Id. Furthermore, Nobel Prizes
were awarded to Roentgen for the X-ray and Fleming for penicillin, both of which were discovered serendipitously. See G. SHAPIRO, supra note 113, at 22, 58. Interestingly, the founder
of the Nobel Prizes, Alfred Nobel, made one of his most famous inventions serendipitously.
While working one night, he cut his finger on a broken beaker and having a bottle of collodion nearby, he painted some on his finger. Later, being unable to sleep because of the pain
from the cut, Nobel realized that the clear plastic coating on his finger would serve as a safe,
waterproof binding material for nitroglycerin. See D. HALACY, JR., supra note 113, at 83-85
(discussing Nobel's discovery in detail).
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ventions, is justified. In the following section, the general
characteristics of a protection system that provides such special incentives are broadly outlined. It is beyond the scope of this article
to provide the procedural and substantive details of a complete protection system; the intent is only to present a conceptual
framework. 176
III.
PROPOSAL: REVOLUTIONARY PATENT
This article proposes the creation of a special title of protection
designed to induce revolutionary inventions. 177 For purposes of
discussion, this title of protection will be called the revolutionary
patent. 78 This grant would be a title independent from the present
utility patent.' 79 This article does not propose to modify the present utility patent system because, to the best of present knowledge,
the system operates in the public interest.' 8 0 Congress could create
the proposed title of protection under its constitutional power to
promote science and the "useful Arts."'' 1 Although a separate title
of protection is proposed, it is not suggested that a utility and a revolutionary patent be granted for the same invention. Rather, an in82
ventor must choose between these separate grants.'
176. The present patent system, however, may provide a substantial portion of the
needed procedural and substantive details. The present proposal is made with the existing
system in mind.
177. See supra notes 109-14 and accompanying text (providing examples of revolutionary
inventions).
178. Other possible names include "super patent" or "grand patent." Such names contrast with the "petty patent" or utility model granted in a number of countries. In the Federal
Republic of Germany, for instance, a petty patent, known as Gebrouchsmuster, is granted for a
term of six years from the application date. Japan grants a utility model for a term of 10 years
from publication or no more than 15 years from the application date. See 2J. BAXTER, supra
note 105, at 1-70-1-82.
179. See 35 U.S.C. § 101 (1982) (establishing statutory class and utility requirements for
utility patent); 35 U.S.C. §§ 151-155 (1982) (dealing with issuance of patents). Utility patents
should be distinguished from plant patents, design patents, and the proposed revolutionary
patent. See 35 U.S.C. §§ 161-164 (discussing plant patents); 35 U.S.C. §§ 171-173 (outlining
patents for designs). See generally supra notes 103-75 and accompanying text (providing overview of inventions within present system).
180. See supra note 19 and accompanying text (discussing public benefit derived from patent system).
181. U.S. CONsT. art. I, § 8, cl.8.
182. Thus, an applicant could file applications for both a utility and a revolutionary patent
and then select one prior to issuance. Alternatively, an applicant could file for a revolutionary
patent and convert it into a utility patent application if the invention failed to satisfy the
higher qualitative requirements of the revolutionary patent. An applicant could also convert a
utility patent application into a revolutionary patent application, provided the disclosure requirements of the latter are appropriately met. See generally 35 U.S.C. §§ 111-122 (1982) (detailing process of applying for patent under present system).
1989]
INVENTION PROTECTION
A.
1.
1129
Requirements for Protection
Statutory class/utility
For revolutionary patents, statutory class and utility requirements
should be liberalized to include all revolutionary inventions. The
"anything under the sun that is made by man" standard adopted in
Diamond v. Chakrabarty18 3 should be literally applied. Accordingly,
any items made by persons, such as computer programs, would be
protectable subject matter under the proposed standard.18 4 On the
other hand, the system would exclude laws of nature and other discoveriesfound by persons. 18 5
The standard for the utility of a revolutionary patent or its usefulness would also be expanded to permit protection if the invention
produces the intended result. This standard of usefulness is
broader than the standard currently applied to utility patents, which
was adopted by the Supreme Court in Brenner v. Manson.18 6 The
current standard for utility patents provides that the public must derive a specific benefit from the invention.18 7 At the same time, the
proposed formulation is broader than both the standard of useful183. 447 U.S. 303, 309 (1980) (quoting S. REP. No. 1979, 82d Cong., 2d Sess. 5 (1952);
H.R. REP. No. 1923, 82d Cong., 2d Sess. 6 (1952)).
184. Including the underlying algorithms and mathematical formulae contained within a
program would be more controversial. See Parker v. Flook, 437 U.S. 584 (1978) (holding that
mathematical formula used for updating alarm limits during catalytic conversion processes
are not patentable); Gottschalk v. Benson, 409 U.S. 63 (1972) (holding that method for converting binary-coded decimal numbers into pure binary numbers for use in programming
computers does not constitute patentable process). In these cases, the dividing line between a
law of nature and something made by a person becomes less clear. See Parker, 437 U.S. at 589
(recognizing lack of clarity of line between patentable process and unpatentable principle);
Gottschalk, 409 U.S. at 67 (distinguishing between phenomena of nature and invention arising
from law of nature).
Given the high qualitative standard proposed for the grant of a revolutionary invention, a
presumption in favor of protectable subject matter may be appropriate. See infra notes 194-22
(discussing qualitative standard of revolutionary inventions).
185. The revolutionary uses for such discoveries made by persons, however, would be protectable subject matter. See 35 U.S.C. § 100(b) (1982) (defining process to include new use of
known process, machine, manufacture, composition of matter, or material).
The Supreme Court has held that laws of nature, physical phenomena, and abstract ideas
are not patentable. See Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); see also Parker v.
Flook, 437 U.S. 584 (1978) (holding that mathematical formula used in alarm limits are not
patentable); Gottschalk v. Benson, 409 U.S. 63 (1972) (holding that series of mathematical
calculations are not patentable); Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127
(1948) (holding that certain cultures of bacteria are not valid for lack of invention). By stipulating that laws of nature are not patentable, all inventors can apply these foundations to
other useful ends. See Funk Bros. Seed Co., 333 U.S. at 130. For this reason, Einstein could not
patent his well-known formula that E=mc2 . See Diamond, 447 U.S. at 309.
186. 383 U.S. 519 (1966).
187. See Brenner v. Manson, 383 U.S. 519, 534-35 (1966) (discussing benefit and utility
needed for patents). In Brenner, the Court denied a patent for a chemical compound that had
no known use beyond scientific investigation. Id.
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ness enunciated by Justice Story in Lowell v. Lewis 188 and the standard used by the Court of Customs and Patent Appeals, which was
rejected by the Supreme Court in Brenner v. Manson.189 While the
proposed does-it-work standard does not ipso facto exclude mischievous or immoral inventions that worked, 190 such inventions,
nevertheless, could be barred from protection by specific identification of invention classes considered "detrimental to the public interest."' 19 1 Thus, as in the case of a utility patent, the revolutionary
patent applicant would be required to provide an enabling disclo19 2
sure demonstrating that the invention works as intended.
These liberalized standards for protected classes and utility are
not intended to expand protection for all inventions. Rather, they
are designed to reverse the negative impact that the present Patent
Act standards have on revolutionary inventions at the margin.1'3
An expansion of the statutory class and utility standards will not
likely result in a great variety of inventions previously not protected.
Even though an invention may easily satisfy the statutory class and
utility requirements, it must still meet the qualitative standard of a
revolutionary invention to be discussed in the next section.
188. 15 F. Cas. 1018, 1019 (C.C.D. Mass. 1817) (No. 8,568) (defining useful as contradistinction of mischievous or immoral).
189. See In re Manson, 333 F.2d 234, 238-39 (C.C.P.A. 1964) (defining standard of useful
as when intended result is produced and not detrimental to public interest), rev'd sub noma.
Brenner v. Manson, 383 U.S. 519 (1966).
190. See Lowell v. Lewis, 15 F. Gas. 1018, 1019 (C.C.D. Mass. 1817) (No. 8,568) (naming
inventions which poison people, promote debauchery, or facilitate private assassination as
examples of mischievous or immoral inventions).
191. In re Manson, 333 F.2d at 238-39. For example, inventions relating to atomic weapons might be classified as detrimental to the public interest. Like utility patents, these inventions would be excluded from the grant of revolutionary patents. See supra note 116
(providing basis for exclusion of patents dealing with atomic weapons).
192. The enabling standard for a utility patent would also apply to revolutionary patents.
The standard for a utility patent reads:
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as
to enable any person skilled in the art to which it pertains, or with which it !is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the
inventor of carrying out his invention.
35 U.S.C. § 112 (1982) (emphasis added). The standard proposes a specification for a person
skilled in the art to satisfy the enabling disclosure requirement rather than a standard of extraordinariness to an expert as proposed for the qualitative requirements for protection by a
revolutionary patent. See infra notes 196-207 and accompanying text (explaining reason for
extraordinary-to-an-expert standard). The government justifies the ordinary skill in the art
standard for disclosure of the invention by basing consideration for the grant partly on the
requirement that the invention will be published rather than kept secret. See Kewanee Oil Co.
v. Bicron Corp., 416 U.S. 470, 480-81 (1974) (explaining why patent law imposes disclosure
requirement on inventor in return for right of exclusion).
193. See supra notes 116-37 and accompanying text (explaining how Patent Act serves as
disincentive for investing in creation of revolutionary inventions).
1989]
2.
INVENTION PROTECTION
1131
Qualitativestandard
For the acquisition of a utility patent, the qualitative requirements
of novelty and nonobviousness do not discriminate between patentinduced and nonpatent-induced inventions. The requirements only
exclude inventions of both types at the margin.1 94 Thus, these requirements may exclude patent-induced inventions of the low benefit/cost variety on the basis of lack of novelty or obviousness to one
skilled in the art, while allowing nonpatent-induced inventions of
the high benefit/cost variety.1 9 5 This weakness suggests that the
qualitative standard proposed for revolutionary patents should be
designed primarily to induce a high yield of patent-induced inventions of the revolutionary type compared to nonpatent-induced
inventions.
To meet this objective, the qualitative standard for a revolutionary patent should be framed as follows: would the invention sought
to be protected as revolutionary be considered extraordinary to experts in the relevant fields?1 96 This standard of extraordinariness
would be evaluated in terms of the technical quality of the invention, 19 7 its commercial character,1 9 8 and the investment expended in
194. See supra notes 138-74 and accompanying text (discussing novelty and nonobviousness standards for utility patents).
195. See supra notes 138-68 and accompanying text (questioning discriminatory effects of
novelty and nonobviousness requirements).
196. This wording illustrates the standard in conceptual form rather than in statutory language. Statutory language defining the qualitative standard for a revolutionary patent, however, can be developed from the current section on nonobvious subject matter. See 35 U.S.C.
§ 103 (1982). The section could be changed to read:
A revolutionary patent may not be obtained though the invention is not identically
disclosed or described as set forth in section [defining novelty standard] of this title,
if the'differences between the subject matter sought to be patented and the technical,
commercial, and investment prior arts are such that the subject matter as a whole
would have been extraordinary at the time the invention was made to persons who
are experts in the respective technical, commercial, and investment arts to which said
subject matter pertains.
This section omits the second sentence of the first paragraph, which states that
"[p]atentability shall not be negatived by the manner in which the invention was made. Id§ 103 (1982). The Act included this provision in order to eliminate the flash of creative genius test enunciated in Cuno Eng'g Corp. v. Automatic Devices Corp., 314 U.S. 84, 91 (1941).
See supra notes 144-47 and accompanying text (discussing interpretation of test). The proposed language excludes this provision, because the proposal seeks to exclude certain inventions from revolutionary patent, in particular serendipitous inventions, on the basis of how
the invention was made. This proposal is not intended to resurrect the flash of creative genius test. See generally infra note 203 and accompanying text (addressing criticism of test
through novelty standard for revolutionary inventions).
197. See infra notes 201-07 and accompanying text (examining technical factor in extraordinariness of invention).
198. See infra notes 209-12 and accompanying text (framing commercial factor as whether
it evokes revolutionary change in production or consumer patterns).
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the development of the invention. 9 9 Thus, experts in those respective fields would determine the extraordinariness of an invention on
the basis of those three factors.
a.
Technicalfactor---extraordinaryadvance to expert
The proposed standard parallels the objective nonobvious standard of the Patent Act. 20 0 The proposed standard, however, is more
difficult to meet in two important respects. First, to qualify for protection as a revolutionary patent, the invention must be an extraordinary advance over prior art and not merely a nonobvious
advance. Second, the extraordinariness of the invention must be
judged from the standpoint of an expert in the relevant art rather
than by one of merely ordinary skill. These factors make the standard more difficult to satisfy, because a prospective patentee must
convince an expert rather than one who is merely ordinarily skilled
in the art that an invention is extraordinary or even nonobvious.
The tort analogy would be to elevate the professional standard of
ordinary care to one of extraordinary care. 20 '
Like the nonobvious standard, extraordinariness uses an objective
standard. This parallel construction would facilitate the role of both
the examining agency 20 2 and the courts, because these institutions
are familiar with such an objective formulation. In addition, they
have already gained experience in adjudicating nonobviousness,
which could be easily transferred to the augmented standard for the
revolutionary patent. At a minimum, this standard avoids the
problems associated with Cuno's subjective flash-of-creative-genius
test.
20 3
199.
tity and
200.
tive test
See infra notes 216-22 and accompanying text (explaining investment factor as quanquality expended in development of invention).
See supra notes 152-60 and accompanying text (summarizing development of objecfor nonobviousness).
201. See W. PROSSER & P. KEETON, ON ToRTs §§ 32-34 (5th ed. 1984) (outlining various
standards and applications).
202. Under the present system, the Patent and Trademark Office reviews applications for
patents. See 35 U.S.C. §§ 111-122 (1982) (reviewing procedure of patent applications). For
revolutionary patents, however, this article proposes either the creation of a separate agency
or the establishment of a separate unit within the Patent and Trademark Office. From the
standpoint of technical expertise and operational efficiency, the more logical solution for the
administration of the proposed title of protection is to rest responsibility with the PTO.
203. See supra notes 144-65 and accompanying text (comparing subjective and objective
standards of nonobviousness). The novelty requirement for revolutionary inventions could
also parallel those for utility patents under § 102. See generally 35 U.S.C. § 102 (1982) (listing
conditions for patentability).
Several proposals may be offered to ensure the technical quality of the invention. First, a
worldwide knowledge standard for prior art could be substituted for the present hybrid standard, which only recognizes foreign publications as prior art. The credibility of the foreign
use or knowledge evidence presented could be evaluated by the trier-of-fact rather than by
arbitrarily eliminating nonpublished prior art. Second, an opposition procedure could be es-
19891
INVENTION PROTECTION
1133
The proposed qualitative standard should enhance the yield of
patent-induced inventions in a number of ways. It would eliminate
those inventions, such as gadget 20 4 and detail 20 5 inventions, which
marginally satisfy the present nonobvious standard. The standard
may also exclude from protection a high percentage of patent-induced inventions of the low benefit/cost category, 20 6 which are of
debatable economic value. 20 7 Of greater economic importance, the
standard may also exclude low quality nonpatent-induced inventions. 208 Nevertheless, the possibility remains that a certain percentage of high benefit/cost nonpatent-induced inventions will meet
the augmented extraordinary technical standard. The test's commercial and investment factors are designed to address this
possibility.
b.
Commercialfactor--extraordinaryto an expert in revolutionizing
production or consumption patterns
The commercial factor requires an evaluation of whether the invention sought to be protected was a revolutionary invention. The
applicant must disclose how the invention has changed or will
change existing production or consumption patterns in comparison
to existing patterns. 20 9 Production or marketing experts in the field
of the invention then evaluate the commercial factor objectively on
tablished. The publication of the application for a revolutionary patent prior to the issuance
of the grant would enable interested parties to present evidence bearing upon the technical
requirement of extraordinariness to an expert. See 134 CONG. REC. 59909-11 (daily ed. July
26, 1988) (discussing Rockefeller amendment to H.R. 4782 onJapan's patent system). On the
other hand, such opposition procedures increase costs, delay the grant, and present problems
of interim protection and early disclosure, which may help competitors to develop improvement inventions. Id. at 59909 (statement of Sen. Rockefeller). United States enterprises complain about the Japanese practice of filing numerous improvement applications after an
application is published under the Japanese system. Id. at 59910 (statement of Sen. DeConcini). The Senate has proposed a provision requiring appropriate Federal officials to investigate and encourage the amendment of the Japanese patent law to eliminate this practice,
which is perceived to be detrimental to U.S. inventors. Id. at 59909 (statement of Sen.
Rockefeller).
204. See Great At. & Pac. Tea Co. v. Supermarket Equip. Corp. (A & P), 340 U.S. 147,
156-58 (1950) (listing various gadgets). See generally id. at 152 (criticizing judicial review of
gadget inventions).
205. See supra note 166 and accompanying text (discussing detail inventions).
206. See id. (showing impact of nonobvious standard on low benefit/cost inventions).
207. See supra notes 106-08 and accompanying text (explaining economic value of low
benefit/cost inventions).
208. See supra note 103 and accompanying text (comparing economic value of patent-induced inventions with nonpatent-induced inventions).
209. The commercial disclosure requirement may be analogized to the technical disclosure enabling standard, with the applicant required to set forth the present state of the art
relating to production and marketing in the field of the invention and describing how these
differ from that of the disclosed invention.
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an extraordinary basis. 210 This requirement compels the examining
agency to gain in-house expertise or develop procedures for experts
outside the agency to examine the commercial quality of the
21
invention. '
By requiring the applicant to prove extraordinariness in order to
satisfy the commercial factor, the proposal tends to eliminate from
protectability inventions that are natural outgrowths of existing productive facilities or product lines. Thus, the requirement would
tend to eliminate the protection improvement inventions. Moreover, the commercial factor would eliminate inventions that are
technically extraordinary but fall within a well established art and do
not revolutionize a particular industry. This drawback may be perceived as a shortcoming of the present proposal. Nevertheless, the
present patent system does provide adequate incentives for the creation of such inventions, which clearly satisfy the present utility pat2 12
ent requirements.
In any event, inventions that fall within existing product lines will
be created irrespective of any protection system. Because of the
competitive need to resolve problems in existing production facilities or product lines, a natural economic incentive exists to increase
the quality of a product and to lower its cost. 21 3 As a result, this
incentive will likely induce a relatively higher percentage of nonpatent-induced inventions compared to revolutionary inventions that
would fall outside existing channels of production or consumption.
The present proposal is intended to provide special incentives for
those inventions out of the mainstream that otherwise would not
receive adequate investment for their creation because of the uncertainty of their benefit/cost ratio. The revolutionary patent, in essence, is directed to those fundamental inventions that may create
entire new industries or significant departures from existing industries. Nonetheless, there may be certain high benefit/cost inven210. See infra notes 202-03 and accompanying text (describing use of objective standard
for extraordinariness).
211. For example, because the Patent and Trademark Office is within the Department of
Commerce, it may find certain expertise in the area of production and marketing within the
Department. See 35 U.S.C. § 1 (1982) (establishing Patent and Trademark Office within Department of Commerce); see also 15 U.S.C. § 1511 (1982) (listing Patent and Trademark Office
among bureaus under jurisdiction of Department of Commerce).
212. See supra notes 103-12 and accompanying text (reviewing economic importance of
patent-induced inventions within present system); see also supra note 137 and accompanying
text (summarizing slight effect that subject matter and utility requirements have on conventional inventions). Nevertheless, this proposal provides for the convertibility of a revolutionary patent application into a utility patent application. See supra note 182 and accompanying
text (outlining procedure in such circumstances).
213. See F. SCHERER, supra note 19, at 444-48 (explaining reasons why companies invest in
research, development, and technology).
1989]
INVENTION PROTECTION
1135
tions that would still objectively qualify as extraordinary under both
the technical and the commercial factors.
c.
Investment factor--extraordinaryquantity and quality of
investment to expert
The third factor is economic and combines quantitative and qualitative elements, which address the amount of capital and labor expended in the creation of the invention and the quality of the
undertaking. Because rewards naturally serve as effective inducements, 2 14 investment should be a factor when giving rewards if investment is expected to be induced. Consequently, to determine
whether an invention qualifies as extraordinary for protection as a
revolutionary invention, this proposal requires that an invention result from an extraordinary investment, viewed either in terms of its
quantitative or qualitative elements by an expert in the field of such
investments.
The primary objective of this factor is to exclude nonpatent-induced inventions of the high benefit/cost variety that result from
research and development directed toward other results. 2 15 To
meet this objective, the requirement compels the applicant to disclose the following: objective or desired result of the research and
development effort; manner in which the result was achieved; capital
and labor expenditures; and quality of the research and development, including the qualifications of the technical personnel and the
techniques employed. 21 6 Thus, only the investment in achieving the
particular objective of the invention in question would be includable
within the investment factor. If the claimed invention arose from a
development project directed toward achieving a different objective,
such as improving an existing product, then only the portion of the
investment spent in developing the serendipitous or spin-off invention would be appropriate for inclusion. As with the commercial
factor, the examining agency must either develop in-house expertise
214. See supra notes 21-53 and accompanying text (providing historical overview of incentives in patent system).
215. Such varieties include the serendipitous or spin-off inventions. See supra notes 11314 and accompanying text (listing examples of serendipitous and spin-off inventions).
216. Such extensive disclosure requirements would force enterprises to maintain detailed
accounting records of the project. This added burden could increase business costs. Moreover, for competitive reasons enterprises may not be willing to disclose their investments in
research and development. To accommodate the competitive disadvantage stemming from
financial data disclosure, the investment portion of the application would not be published as
part of the revolutionary patent document. Under the proposal, information would be maintained in secrecy unless the patent was challenged in court. If, however, fear of disclosure of
investment information led to under-utilization of the revolutionary patent system, failure to
meet the investment requirement could be eliminated as a ground for invalidation.
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to evaluate the extraordinariness of the investment or make arrangements for expert evaluation outside of the agency. 2 17
The principal problem with including an investment factor in
evaluating extraordinariness is its circuitous nature. It rewards for it
induces; thus, this factor may enable the rich to get richer. 218 Accordingly, large enterprises, which can invest more heavily than
small enterprises or individual inventors, will receive an undue advantage in the awarding of revolutionary patents. While this assertion may hold a great deal of validity, the present system also tends
to favor large enterprises in obtaining utility patents. 21 9
The primary goal of the revolutionary patent is to induce venture
capital in nonmainline inventions. The availability of revolutionary
patents should spur the entrepreneurial spirit that tends to reside
largely in individuals and small enterprises. 220 Large enterprises
would logically be more apt to devote their research and development efforts to maintaining and improving their product lines and
market shares. Moreover, the evaluation of whether the investment
was extraordinary should not be limited to the gross quantity of the
investment; it should consider the relative investment compared to
the resources of a particular enterprise or inventor. 22 1 In addition,
the quality of research and development is an important element in
determining an investment's extraordinariness. For instance, the
mere performance of a vast quantity of expensive experiments by
trial and error to achieve a particular result may indicate the quantity
but not necessarily the quality of investment. 22 2
217. See supra note 211 and accompanying text (recommending possibilities examining
agency could use for making commercial factor determination).
218. Cf.I J. MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION §§ 15:18-15:19, at 698700 (2d ed. 1984) (discussing trademark law in which evidence of amount expended on advertising is relevant toward proving secondary meaning of trademark). The logical result is that
the more money a seller spends on advertising, the greater the buyers' exposure to this symbol as a trademark. Id. § 15:19, at 699.
219. In 1988, 79% of U.S. patents were assigned to corporations, of which 38% went to
corporations in the United States and 41% were assigned to corporation in foreign countries.
Only 19% were assigned to individuals with 14% coming from the U.S. and 5% coming from
other countries. The remaining 2% were assigned to the U.S. government and foreign governments. SeeJ. MEYERS, supra note 8, at A3.
220. See F. SCHERER, supra note 19, at 450 (concluding that patent system does more to
stimulate invention and innovation by small entrepreneurs than by large corporations); J.
JEWKER, D. SAWERS & R. STILLERMAN, supra note 173, at 250-60 (1959) (discussing how patent
system helps individual inventors); Greer, supra note 19, at 225 (revealing that, in general,
individual inventors, unlike corporations, rely heavily on patent protection to sustain their
innovative efforts).
221. Imposing a qualitative standard would serve as an antidote to the "rich-get-richer"
problem.
222. See Picard v. United Aircraft Corp., 128 F.2d 632, 636 (2d Cir.), cert. denied, 317 U.S.
651 (1942) (explaining that search for improvement through trial and error should not be
mistaken for invention).
1989]
3.
INVENTION PROTECTION
1137
Summary of proposal
The qualitative protection standard of extraordinariness to experts takes into account three factors-technical, commercial, and
investment-in order to increase the yield of patent-induced revolutionary inventions. Each of the factors must evidence the extraordinariness of the invention from the respective viewpoints of
technical, commercial, and investment experts. This multi-factor
approach may be unduly complex and may increase transaction
costs. This approach may also discourage the use of a revolutionary
patent system, because it creates uncertainty in obtaining protection
in the first instance and in sustaining the validity of the grant in the
judicial system. Nevertheless, the proposed extraordinariness test
parallels the current nonobvious standard, which according to the
Court of Appeals for the Federal Circuit requires the trier of fact to
consider the nontechnical secondary considerations of nonobviousness. 2 23 Moreover, the examining agency should gradually develop
greater competency and efficiency in evaluating these factors, in
particular, the commercial and investment ones. The use of special
masters for expert opinion on the respective factors may also facilitate the adjudication of the extraordinary standard during litigation.
B.
Characteristicsof Protection
Given the high and relatively complex qualitative standard required for a revolutionary patent, the protection afforded under
such a grant should be concomitantly increased. Because the system offers exclusivity as the incentive for the creation of inventions,
the recipient will naturally value the length of the term of exclusivity. 224 Indeed, this generalization proffers that the longer the term
of exclusivity the greater the incentive. Conversely, the longer the
exclusivity, the greater the cost to society. 225 The difficulty focuses
on weighing the period of exclusivity needed to induce an adequate
number of revolutionary inventions and the cost of denying public
access to those inventions during that period. 22 6 Beyond these gen223. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983) (emphasizing that secondary considerations must be evaluated in determination of nonobviousness);
see also Graham v. John Deere Co., 383 U.S. 1, 17 (1966) (proclaiming importance of secondary considerations in nonobvious standard); supra notes 165-70 and accompanying text (discussing judicial review of secondary considerations in evaluating nonobviousness). See
generally 35 U.S.C. §§ 141-144 (1982) (explaining procedure for appeals to Court of Appeals
for the Federal Circuit).
224. See supra notes 70-71 and accompanying text (explaining incentives in creation of
invention).
225. See Turner, supra note 15, at 454-55 (discussing costs of patent system).
226. The optimal term for a patent has been studied. See W. NORDHAUS, INVErarON,
GROWTH AND WELFARE 76-82 (1969) (computing optimal life of patents); see also ECONOMIC
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eralizations, it is extremely difficult to give a definitive answer with
respect to the appropriate term for a utility or revolutionary patent,
22 7
except that the latter must be appropriately longer.
At the extreme, the greatest incentive would be perpetual exclusivity based on the use of the invention. The costs of a use-limited
period, however, would likely exceed the benefits of inducing a significantly greater number of inventions. Moreover, the commerce
clause, rather than article I, section 8, clause 8, which requires a
time limit on exclusivity, must serve as the federal basis for such
legislation. 2Z8 Legislation based on the commerce clause leaves
open the possibility of state protection of intrastate inventions and
may lead to the problem of parallel protection systems currently
2 29
plaguing trademark law.
Given the absence of an economically verifiable period of exclusivity adequate to induce the needed quantity of revolutionary inventions and noting that such period of time must be greater than
for utility patents, the use of analogies may be helpful in defining
the period of exclusivity for revolutionary patents. One useful analogy is the period of exclusivity for a copyright, which is life plus fifty
years or seventy-five years from publication of an institutional
work. 230 The rapid growth in technology expected to continue into
the twenty-first century, however, makes such time periods excessively long and hence excessively costly. A more palatable approach
may be to apply a multiple to the term granted under the present
Patent Act, which provides a term of seventeen years from the grant
of the utility patent. 23 1 For example, it may be desirable to double
this period, thereby instituting a term of thirty-four years from the
date of grant. An alternative might be to grant a somewhat longer
period of thirty-six to forty years from the filing date of the application. To provide an incentive for applicants to seek an early grant,
REVIEW, supra note 17, at 66-73 (illustrating effects of increase in duration of patents for term
of over 15 years). But see F. SCHERER, supra note 19, at 454-55 (questioning assumptions used
in determining impact of system on spectacularly novel and ambitious developments).
227. A longer term can be economically justified on the grounds that the higher yield of
revolutionary inventions induced by the proposed system should provide a net societal benefit, even though the public is denied access to the invention for a longer period.
228. In Trade-Mark Cases, the Court wrote that clause 8 of section 8 of article I of the
Constitution did not authorize federal trademark legislation. Trade-vlark Cases, 100 U.S. 82,
85-86 (1879). An act of Congress could be extended, however, to trademarks under the commerce clause. Id. at 85. Nevertheless, the Court declared that the Trade-Mark Act of 1870, as
amended, was unconstitutional. Id. at 97-99; see also 15 U.S.C. §§ 1051-1127 (1982) (establishing Trademark Act of 1946, popularly known as Lanham Act, based on commerce clause),
229. See 2J. MCCARTHY, TRADEMARKS AND UNFAIR COMPETITION §§ 22.1-22.5, at 23-39 (2d
ed. 1984) (discussing state registration of trademarks).
230.
See 17 U.S.C. § 302 (1982) (listing duration of copyright for works created on or after
January 1, 1978).
231.
See 35 U.S.C. § 154 (1982) (describing contents and term of patent).
1989]
INVENTION PROTECTION
1139
the system should offer either the period of thirty-four years from
grant or the longer period of thirty-six to forty years from the filing
23 2
date.
Full exclusivity during the entire term of the grant, with no compulsory licenses being obtainable during the period, would provide
the greatest incentive. This type of exclusivity is consistent with the
present United States patent system, which does not require statutory compulsory licenses for the nonworking or insufficiently working patented invention. 23 3 Nonetheless, the specter exists that an
owner may suppress or severely limit supply, thus creating a greater
problem the longer the term of protection.
In the case of revolutionary inventions, however, the problem of
nonworking or insufficiently working inventions seems unlikely.
The principal reason is that revolutionary inventions require a high
level of technical quality and a relatively large investment. 23 4 Moreover, because of the revolutionary invention's nature, it may take
longer to fully commercialize a given invention. 23 5 In cases of extreme abuse, such as the withholding from production of a lifesaving drug, the government may always assert its power of eminent
23 6
domain to ensure that the public interest is served.
The scope of protection afforded by a revolutionary patent is
analogous to that provided by a utility patent. 23 7 The flexibility of
the proposed system should provide applicants with the appropriate
232. See F. SCHERER, supra note 19, at 454 (asserting that although it is not administratively feasible,'ideal patent system would tailor life of patent to invention's peculiar circumstances). With experience, the term could be lengthened or reduced. While a useful
compromise would be to match the term with the invention's technical field, in order to optimize the incentive, the present state of knowledge appears to preclude such sophistication.
233. The position of the United States differs from that of the vast majority of countries
that grant compulsory licenses. See J. BAXTER, supra note 105, at 146-52 (summarizing how
various countries deal with compulsory licenses).
234. See supra notes 196-222 and accompanying text (describing factors satisfying proposed qualitative standard for revolutionary inventions).
235. See supra note 173 and accompanying text (examining period needed for revolutionary invention to attain commercial success).
236. The theory underlying compensation by the United States government for the infringement of a patent is that the infringement is a taking within the government's eminent
domain. See, e.g., Pitcairn v. United States, 547 F.2d 1106, 1114 (Ct. Cl. 1976) (holding use or
production of patented invention by or for government constitutes taking by eminent domain
of license in patent), cert. denied, 434 U.S. 1051 (1978); Calhoun v. United States, 453 F.2d
1385, 1391 (Ct. Cl. 1972) (holding that Gbovernment ipsofacto takes by eminent domain compulsory compensable license in patent when patented device or invention is made or used by
or for United States); N.V. Philips' Gloeilampenfabrieken v. Atomic Energy Comm'n, 316
F.2d 401, 407 (D.C. Cir. 1963) (upholding Government's use of eminent domain pursuant to
Atomic Energy Act revoking of all existing patents useful exclusively in production of fissionable material and prohibiting issuance of new patents for such purposes); see also Vitamin
Technologists, Inc. v. Wisconsin Alumni Research Found., 146 F.2d 941, 946 (9th Cir. 1944)
(explaining government's power of eminent domain by reference to patents that protect
health of large number of citizens).
237. In terms of patent applications, the second paragraph of 35 U.S.C. § 112 (1982)
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breadth of protection that their inventions warrant.23 8 Moreover, a
liberal application of the doctrine of equivalents 23 9 may be expected
in infringement litigation because of the fundamental nature of the
inventions involved.2 40
One of the disincentives for the investment in intellectual property, in general, and patents, in particular, is the possibility that
courts may later invalidate the title of protection.24 1 To encourage
investment in revolutionary inventions, any proposal must provide
assurances that such grants will not be easily invalidated by the
courts. One far-reaching suggestion would be to grant in rem protection with extraordinariness being incontestable once the grant is
issued; challenges to the revolutionary patent would be limited to
allegations that the system was abused, such as fraud in procurement, antitrust violations, or misuse of the patent.2 1 2 Given the posprovides that "specification shall conclude with one or more claims particularly pointing out
and distinctly claiming the subject matter which the applicant regards as his invention."
238. See 35 U.S.C. § 112 (1982) which provides:
An element in a claim for a combination may be expressed as a means or step for
performing a specified function without the recital of structure, material, or acts in
support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
See generally 2 D. CHisUM, PATENTS, supra note 120, § 8.04, at 8-42 to -65 (1987) (covering
functional language in claims).
239. The doctrine of equivalents is based on the theory that "if two devices do the same
work in substantially the same way, and accomplish substantially the same result, they are the
same, even though they differ in name, form or shape." Machine Co. v. Murphy, 97 U.S. 120,
125 (1877).
240. See Graver Tank & Mfg. Co. v. Linde Air Prod. Co., 339 U.S. 605, 608 (1950) (stating
when patentee may invoke doctrine of equivalents to proceed against one who produces substantially similar device). See generally 4 D. CHISUM, PATENTS, supra note 120, at 18-32.7 to -54
(1987) (discussing doctrine of equivalents).
241. History shows that courts have invalidated a relatively high percentage of patents. In
a 53-year study from 1921 through 1973, courts of appeals invalidated 65% of the patents,
while district courts invalidated 55%o. Baum, The Federal Circuits and Patent Validity: An Analysis
of the Record, 56J. PAT. OFF. Socv' 758, 760-61 (1974). In a 30-year study from 1948 through
1977 limited to the issue of nonobviousness, 52% of patents were held invalid by district
courts and 64% by the courts of appeals. See Cohen, Nonobviousness and the Circuit Courts of
Appeal-Twenty-Five Years in Review, in NONOBVIOUSNESS, supra note 142, at 3:14. In the first
three years of operation of the Court of Appeals for the Federal Circuit, with respect to appeals from district courts, the invalidation rate decreased to 46% on the nonobviousness issue
and 50% on section 102 issues. If section 112 issues are included, the overall percentage of
invalidity was 44%. Dunner, The Court of Appeals for the Federal Circuit-Its First Three Years:
Introduction, 13 AM. INTELL. PROP. L. Ass'N Q.J. 185, 186-88 (1985). Finally, PTO reexamina-
tion practice for 1986 reveals that 19 patents were cancelled out of 184 patents for an invalidation rate of 10.3%. See COMMISSIONER PAT. & TRADEMARKS, ANNUAL REPORT 24 (fiscal year
1986).
242. Two professors have proposed a dual patent system in which long-term patents
would be granted for 17 years and short-term patents for seven years. See Harris & Fay, Certain IncontestablePatentsAre Warranted, 60J. PAT. OFF. Soc'Y, 27-28 (1978). Under their proposal, after five years and one year respectively, patents would be incontestable, with
invalidation after the incontestability period limited to: (1) lack of novelty under 35 U.S.C.
§ 102(a) or (b) based on a printed publication not previously considered by the PTO; (2) the
patent owner's own public use or sale under 35 U.S.C. § 102(b); and (3) fraud in the procurement. Id. Antitrust and misuse defenses would also remain available. See generally Harris,
1989]
INVENTION PROTECTION
1141
sible discovery of prior art after the grant and the long period of
exclusivity awarded, a more satisfactory suggestion may be to provide a strong presumption of validity that is only rebuttable upon
clear and convincing evidence of newly discovered prior art or other
evidence of nonextraordinariness. As with utility patents, appeals to
the Court of Appeals for the Federal Circuit and the examining
agency's reexamination procedures would also tend to provide assurances of consistency on validity issues. 243
C.
Domestic and InternationalImplications
This proposal to protect revolutionary patents will have domestic
as well as international implications. Domestically, if the premises
underlying such a system are correct, there will be increased investment in research and development for revolutionary inventions.
Consequently, such inventions will be created and protected by revolutionary patents. In addition, inventions that result from the same
investment but that do not meet the high extraordinary standards
for revolutionary patents will be protected by conventional utility
patents. The commercialization of revolutionary and conventional
inventions will counteract, at least in part, any technological decline
in the United States and reinvigorate the economy by establishing
new and expanding industries. Moreover, even with the increased
term of exclusivity, society should receive a net benefit because a
large number of revolutionary inventions would not have been created but for the revolutionary patent incentive.
The system also should exploit the creativity and entrepreneurial
spirit of American inventors. In contrast to certain foreign counterparts, who are excellent adapters and improvers of inventions,
American inventors are among the most creative in the world. 24 4
Accordingly, United States entrepreneurs should invest heavily in
this native creativity to encourage the development of inventions
Reflections on Some Pending PatentLegislation (pts. 1-4), 56J. PAT. OFF. Soc'Y 316, 364, 462, 523,
524-29 (1974) (providing foundation for proposal).
243. See 35 U.S.C. §§ 301-307 (1982) (describing statutory provisions relating to reexamination of issued patents).
244. Between 1953 and 1973, 319 out of 500 major technological innovations were
originated in the United States as compared to 34 in Japan and 33 in West Germany. See S.
GEE, supra note 2, at 65-70 (noting also that while United States had greater number of technological innovations, Japan and West Germany provided protection in substantially less
time, suggesting more stimulating environment for technological advances). In chemistry,
physics, and physiology/medicine, during the period from 1961 to 1975, Nobel Prizes were
awarded to 92 recipients in the United States, compared to 20 in Japan and eight in West
Germany. From 1976 to 1986, 70 Nobel Prizes were awarded in the United States compared
to eight in Japan and three in West Germany. STATISTICAL ABSTRACT, supra note 5, at 561; see
also S. GEE, supra note 2, at 70 (referring to invention of video tape recorders and Americandesigned jet engines, both of which were invented in United States but marketed abroad).
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that might not otherwise be made because of the uncertainty in investing in ventures outside current patterns of production or consumption. If creativity and entrepreneurial spirit are outstanding
characteristics of individuals and enterprises in late twentieth century America, then rewarding these characteristics should produce
24 5
substantial domestic economic benefits.
At the same time, however, it must be remembered that the distinction between domestic and international markets is artificial. In
the era of the multinational corporations, investments are made in
areas where rewards are optimal. United States enterprises invest in
foreign industries, and, with increasing regularity and numbers, foreign enterprises invest in United States industries. 2 4 6 The United
States has also become a desirable venue for such investment for
various reasons. In addition to political and economic stability and
a large domestic market, the favorable exchange rate between the
dollar and many foreign currencies attracts large amounts of foreign
capital. Because the United States has maintained large foreign
trade deficits over the past decade, countries with trade surpluses,
such as Japan, have gained excess capital for domestic and international investment. 24 7 Additionally, the United States is now the
world's largest debtor nation, with mounting budget deficits that require large infusions of foreign credit. 248 The availability of revolutionary patents should provide an additional incentive for foreign
enterprises to invest in the United States. The increase in utility
patents issued to foreigners over the past ten years gives reason for
245. Some empirical support exists for the entrepreneurial spirit of individual Americans.
A recently released study commissioned by the Small Business Administration explained that
nine out often investments are in firms with less than 20 employees, that the flow of informal
equity is much larger than professional venture capital, that nine out of ten investors loan
money to firms in which they invest, and that investors would have invested 35% more if
acceptable opportunities existed. GASTON & BELL, THE INFORMAL SUPPLY OF CAPITAL 3
(1988); see G. GILDER, THE SPIRIT OF ENTERPRISE 217 (1984) (examining development of
semiconductor devices and concluding United States still dominates entrepreneurial arena).
See generally P. DRUCKER, INNOVATION AND ENTREPRENEURSHIP (1985) (scrutinizing entrepreneurship boom in American economy); C. KENT, THE ENVIRONMENT FOR ENTREPRENEURSHIP
(1984) (postulating that, while not dead, entrepreneurship in United States is stifled by excessive government regulation and short-term corporate goals); ENTREPRENEURSHIP AND THE
OUTLooK FOR AMERICA (J. Backman ed. 1983) (studying past and future of United States
entrepreneurship).
246. The United States international investment position has dropped from a positive balance of $141.1 billion in 1981 to a negative balance of $263.6 billion in 1986. STATISTICAL
ABSTRACT, supra note 5, at 258. In 1986, the United States had a negative investment balance
with Western Europe and Japan of $280.1 billion and $64.7 billion respectively. Id. The
number of United States businesses acquired by foreign direct investment also increased dramatically. Id. at 760.
247. The merchandise trade deficit between the United States and Japan increased from
$1.86 billion in 1975 to $55.03 billion in 1986. Id. at 772.
248.
See BUDGET OF THE UNITED STATES, supra note 6, at 16 (setting out Office of Manage-
ment and Budget's deficit figures).
1989]
INVENTION PROTECTION
1143
such optimism. The same should hold true for revolutionary patents. 24 9 Nevertheless, this analysis leads to the question of whether
restricting foreign access to a protection system for revolutionary
inventions is in the best interests of the United States.
To counteract the trade deficit, the United States has become increasingly protectionist, reversing its long-standing policy of freemarket competition. 250 While the dollar's decline against foreign
currencies has rendered American-made products more competitive, unless American products keep pace with technological advances the United States will not be able to overcome its trade
imbalances. 25 1 American consumers continue to show a voracious
appetite for foreign-made products, based not only on their cost but
also, evidently, on their technical quality compared to products
252
made in the United States.
In addition to quotas and the withdrawal of certain tariff privileges, inequities in intellectual property protection have been singled out for equalization. 2 53 For example, the Semiconductor Chip
Protection Act of 1984254 grants copyright-like protection to foreign
nationals only on a reciprocal basis. 25 5 Moreover, the Omnibus
249. See supra note 8 (identifying comparative utility patent figures).
250. See Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, 102 Stat.
1107 (1988) (amending Trade Act of 1974, 19 U.S.C. § 182 (1982) and illustrating most recent political compromise).
251. Despite a falling dollar, the trade deficit increased from $156 billion in 1986 to $171
billion in 1987. The deficit is predicted to drop only to $140-150 billion in 1988. See Farnsworth, supra note 4, at D1 (quoting from report of Congressional Joint Economic Committee
concluding that to remedy deterioration of high-tech trade requires more than realignment of
currency values).
252. United States exports of merchandise dropped from $220.6 billion in 1980 to $217.9
billion in 1986, while imports increased from $244.9 billion in 1980 to $370 billion in 1986.
STATISTICAL ABSTaAr, supra note 5, at 768. In 1987, exports increased to $254.1 billion;
imports, however, increased to $406.2 billion. U.S. DEP'T OF COMMERCE, 68 SURVEY OF CURRENT BUSINESS, 516 (1988). A recent New York Times/CBS News/Tokyo Broadcasting System
Poll showed that American consumers believe that Japan makes more technologically advanced consumer products than the United States by a 30% to 21% margin; Japanese consumers agreed by a 54% to 16% margin. The poll also indicated that Americans feel that
Japanese cars are a better value, dollar for dollar, than American cars by 43% to 30%, while
Japanese voted in an overwhelming margin of 84% to 4%. See Chira, Poll Blames U.S. and
Japan Trade, N.Y. Times, Aug. 13, 1988, at DI, col. 5.
253. See J. BARTON & B. FISHER, INTERNATIONAL TRADE AND INVESTMENT 234-45 (1986)
(explaining that beginning in 1982 Voluntary Restraint Agreement established limits onjapanese imports into United States); see also Pine, U.S. Officials Curb Duty-Free Trade Status, Wall St.
J., Jan 5, 1987, at 4, col. 1 (reporting that United States has withdrawn preferential tariff
treatment from Brazil, Mexico, South Korea, and Taiwan).
254. 17 U.S.C. §§ 901-914 (Supp. IV 1986). The Act protects mask works from reproduction for a period of 10 years. Id.
255. See Semiconductor Chip Protection Act of 1984, 17 U.S.C. § 902(a)(2) (Supp. IV
1986) (limiting available protection under Act to nationals and domiciles of foreign nations
that extend protection on substantially same basis to United States nationals and
domiciliaries).
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Trade and Competitiveness Act of 1988,256 provides trade sanctions
against any nation whose intellectual property laws do not adequately protect Americans. 257 These measures reflect a reversal of
the United States' long-standing international commitment to the
national treatment of foreigners' intellectual property. 2 58 With respect to intellectual property protection, national treatment requires countries to treat foreign nationals as they treat their own.
This principle dates back to the Paris Convention for the Protection
of Industrial Property, to which the United States has been a party
since 1893.259
Historically, however, the United States has not supported the national treatment principle. 26 0 A major reason is that it places the
United States at a disadvantage compared to small, industrialized
nations with limited markets 2 6 1 and to countries with protectionist
policies. 26 2 Moreover, as the United States protects a broad range
of statutory classes of inventions, it places itself at a disadvantage
compared to countries that deny protection to critical classes of in256. Pub. L. No. 100-418, 102 Stat. 1107 (1988) (codified at 19 U.S.C. § 2901).
257. The Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, § 1303,
102 Stat. 1179 (codified at 19 U.S.C. §§ 2241-2242) (requiring United States Trade Representative to identify foreign countries denying fair and effective protection to intellectual
property and to initiate investigation of those countries). If the Trade Representative finds
foreign countries denying adequate, effective protection of intellectual property rights, he
may recommend to the President that trade sanctions be imposed, including suspension of
trade agreement concessions, imposition of duties, or other import restrictions. Id. § 1301,
19 U.S.C. § 2411.
258. National treatment is required under the Paris Convention. See Paris Convention,
supra note 46, art. 2 (stating that nationals of contracting states enjoy same protections accorded by state to its own nationals); The Universal Copyright Convention, Sept. 6, 1952, 6
U.S.T. 2731, T.I.A.S. No. 3324, art. II (providing similar protection); Bern Convention for the
Protection of Literary and Artistic Works of 1886, 168 Paris T.S. 185, art. 3(1) (enacting legislation in 1887 so that United States may adhere to Convention).
259. Paris Convention, supra note 46. The convention provides that, "[niationals of each
of the countries of the union shall, as regards to the protection ofindustrial property, enjoy in
all the countries of the union the advantages that their respective laws now grant, or may
hereinafter grant, to nationals." Id. at art. 1(2). In addition, under the Convention, industrial
property applies not only to industry and commerce, but also to agriculture and manufactured
or natural products, such as wines, grain, tobacco leaf, fruit, cattle, minerals, mineral waters,
beer, flowers, and flour. Id. at art. 1(B). At the same time, the Convention defines patents as
those industrial patents recognized by members of the union, such as import patents and
patents of improvement. Id. at art. 1(4).
260. See 1 S. LADAS, supra note 43, § 55 (discussing United States attempt at 1925 Hague
Convention to amend Paris Convention to eliminate national treatment); E. PENROSE, supra
note 44, at 64-67 (discussing historical development and controversy over national treatment
in international agreements).
261. For example, Switzerland, with a population of 6.6 million, had a United States trade
merchandise surplus of $2.3 billion in 1986. Sweden, which has a population of 8.4 million,
enjoyed a United States merchandise trade surplus of $2.55 billion in 1986. STATISTiCAL AuSTRACT, supra note 5, at 771, 796.
262. Japan's nontariff barriers, such as import quotas and detailed product specifications,
are examples. See J. BARTON & B. FISHER, supra note 253, at 433-52 (considering various
nontariff barriers).
1989]
1145
INVENTION PROTECTION
ventions such as pharmaceuticals and food products. 26 3 Thus, reciprocal treatment rather than national treatment serve United
States interests. Accordingly, the United States should provide protection only to the foreign nationals of countries that provide reciprocal protection to United States nationals-a policy that underlies
the Semi Conductor Chip Protection Act. The United States has
also been highly successful in obtaining reciprocal compliance for
nations wishing to share in the benefits of the protection provided
under this statute. 264
It is tempting to follow the policies of the Semiconductor Chip
Protection and Omnibus Trade and Competitiveness Acts and to
propose that revolutionary patents be categorized as sui generis and
outside the purview of the Paris Convention. There are several advantages to this approach. If national treatment were afforded to all
members of the Paris Convention, the increased incentives of revolutionary patents would be available to all foreign inventors and enterprises. Thus, foreigners could obtain revolutionary patents on a
national treatment basis, and there would be an increasing percentage awarded to foreigners, as is the case for utility patents. On the
other hand, American inventors would not have similar protection
in foreign countries unless those countries enacted similar legislation. Therefore, the uneven playing field would become more uneven.2 65
By
conditioning
the
availability
of United
States
revolutionary patents on reciprocal protection to American inventors, foreign countries have an incentive to enact similar legislation.
American inventors would still have the ability to acquire foreign
utility patents on revolutionary inventions either by filing utility patent applications directly in those countries or by claiming priority
under a utility patent application filed in the United States, which
could be filed along with a revolutionary patent application. 266
263. Pharmaceuticals and food products are excluded from patent protection in 46 and 21
countries respectively. U.N. DEP'T OF ECONOMIC & SOCIAL AFFAIRS, UNCTAD SECRETARIAT
AND INT'L BUREAU OF THE WIPO, THE ROLE OF THE PATENT SYSTEM IN THE TRANSFER OF TECHNOLOGY TO DEVELOPING COUNTRIES, at 116, U.N. Doc. TD/B/AC.1 1/19 (1979).
264. See Semiconductor Chip Protection Act of 1984, 17 U.S.C. § 914 (1984) (granting
interim protection on showing that foreign nation is making good faith effort and progress
toward providing reciprocal protection). Eighteen countries have been granted interim protection, including the 12 members of the European Community, Australia, Canada, Finland,
Japan, and Sweden. See, e.g., DOD Revised Interim TechnicalData Rights Rule, 37 Pat. Trademark
& CopyrightJ. (BNA) at 26 (Nov. 3, 1988); PTO Notice On Establishment ofBiotechnology Institute,
37 Pat. Trademark & CopyrightJ. (BNA) at 440-41 (Mar. 2, 1989); Pat. Trademark & CopyrightJ. (BNA) at 556 (Mar. 23, 1989).
265. The increasing percentage of United States utility patents granted to foreigners exacerbates this problem. See S. GEE, supra note 2, at 60-61 (presenting statistical data).
266. Under the Paris Convention, a patent applicant in any country of the Union is entitled to a twelve month priority period to file in any other Union country and is entitled to the
original filing date. Paris Convention, supra note 46, at art. 4(1).
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While there appear to be advantages in conditioning foreign access to the revolutionary patent system on a reciprocal basis, this is
not proposed for a number of reasons. First, the origin of an invention does not determine its value to society. If a revolutionary invention is not made here or abroad but for the existence of the
United States revolutionary patent system, then whatever value it
imparts depends on the system and not the nationality of the inventor or the country where the invention was created. Second, in view
of its analogous characteristics to historical systems of invention
protection, it seems disingenuous to unilaterally assert that the revolutionary patent is not a form of industrial property. At least in the
case of mask works, as defined under the Semiconductor Chip Protection Act, they were not readily protectable under either the preexisting patent or copyright systems. 26 7 Thus, there is a basis for
the argument that the Act provided a sui generis form of protection.
Third, demanding reciprocity may disadvantage American industries if foreign nations react negatively and impose additional barriers to their markets. Fourth, denying foreign access to
revolutionary patents will not ipsofacto deny access to foreign investment in the United States for the development of revolutionary inventions.
Rather, American subsidiaries of foreign-owned
corporations will develop revolutionary inventions, and the economic benefits from such grants would be exported to the foreign
268
parent.
Fifth, the revolutionary patent owner's nationality will not determine where the invention is manufactured. 2 69 Enterprises, whether
domestic or foreign, will manufacture the product in a country
where returns are optimized by comparative advantage. Finally, the
Trade Act appears to provide a reasonable alternative to reciprocal
treatment by imposing trade sanctions on countries that fail to provide adequate intellectual property protection to American inventors and enterprises. These sanctions should provide the necessary
incentive for those countries to implement revolutionary patent
systems.
267. E. KITCH & H. PERLMAN, LEGAL REGULATION OF THE COMPETITIVE PROCEss 795-96
(3d ed. 1986) (concluding that employment of known design methods rendered chips unpatentable). Furthermore, the functional imperatives of the circuit components dictated its design. Id. Thus, the microchip was not copyrightable. Id. Congress legislated patentability in
order to protect the private incentive needed to design microchips. Id.
268. See supra note 246 and accompanying text (discussing magnitude of foreign acquisition of American industries).
269.
A domestic working requirement for revolutionary patents under the risk of compul-
sory licenses for failure would provide an incentive for domestic work, but this may be offset
by inefficiencies in such working and the disincentive of a compulsory licensing system. See
supra notes 233-36 and accompanying text (discussing grant of compulsory licenses).
1989]
INVENTION PROTECTION
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To conclude, full national treatment should be afforded to all revolutionary patents. The proposed patent system is designed to induce the creation of revolutionary inventions, regardless of their
origin. If abuses develop, sanctions could be imposed under the
Trade Act. In any event, if the premise is that a United States revolutionary patent system will energize our creative and entrepreneurial spirit, the proposed system should redound in a net
benefit to this country.
CONCLUSION
There have been two significant transformations of the American
economy in the twentieth century-first from an agricultural to a
manufacturing-based economy and then from a manufacturing to a
service-based economy.2 70 The latter transformation will continue
into the twenty-first century. Indeed, many anticipate that substantially all of the twenty-one millionjobs created before the end of the
century will be service jobs. 27 1 What has become increasingly apparent, however, is that a service economy's prosperity depends on
a viable industrial base, 2 72 and the validity of the industrial base depends on adequate investment and a state-of-the-art, technological
base.
The basic premise of this article is that the present patent system
does not provide adequate incentives for the creation of those inventions that will sustain and advance the United States economy in
the twenty-first century. At the same time, it is proffered that the
economically important class of inventions consists of those inventions that revolutionize existing patterns of production or consumption and that under-investment is most likely to occur in these
inventions because of the uncertainty of their benefit/cost ratio.
Accordingly, a conceptual framework has been offered in the form
of a revolutionary patent that provides additional incentives for investment in and creation of revolutionary inventions. The proposed
framework is designed to alleviate shortcomings in the present patent system and to exploit the creativity of inventors and the entrepreneurial spirit of investors.
270. In 1900, almost three-fourths of United States workers worked in agriculture or production industries. Today the situation is reversed-75% in services, 24% in production, and
3% in farming. BUSINEss ALMANAC, supra note 2, at 24-26, 199-200.
271. Id. at 24, 199.
272. SeeJ. KUR-ZMAN, supra note 2, ch. 2 (arguing that high-tech society cannot expand
without increased production in industrial sector); Berger, The False Paradiseof a Service Economy, Bus. WK., Mar. 3, 1986, at 78 (detailing lack of growth under service economy absent
expanding industrial base).
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The author wishes to close with a note of caution: The question
of whether the patent system provides a net social benefit has not
been empirically resolved. 2 73 There is, however, a widely held perception, founded on the experience of half a millennium, that it
does. It is in that context that the present proposal, with all its perceived and unperceived limitations, is made-with the belief that it
is a most propitious time for a re-evaluation of how best to achieve
27 4
the promise of article I, section 8, clause 8 of the Constitution.
273. Priest, supra note 89, at 19 (concluding that ratio of empirical demonstration to assumption is close to zero); see Merges, supra note 88, at 844 n.177 (arguing that Kitch's criticism is inapplicable to merit-based patent systems that are designed to advance development
of new technology).
Consensus on the goals involves underlying assumptions and serious definitional problems.
For example, the first goal of rewarding meritorious inventions is a consensus assumption,
but to define meritorious invention as one that is nonobvious belies the assumption that nonobvious inventions as a class provide a net societal benefit. This is Priest's objection to Kitch's
original position. Kitch explains that the nonobviousness standard under which patents are
granted in the United States is interpreted to grant patents only where social welfare is enhanced. Priest, supra note 89, at 20. The position taken here is that being nonobvious in itself
does not make an invention meritorious. Rather, the questions are whether the invention was
induced by the patent system and whether it satisfied a quality standard that "foster[s] the
diffusion of new technology." In other words, does the patent system disclose an invention
that would not otherwise be available to the public but for the patent system. Id.
274. U.S. CoNsT., art. I, § 8, cl.
8.