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The Nature of New and Useful Things Font Size: 
Co-Authored by Thomas J. Van Gilder
By Michael Rosen : BIO| 10 Mar 2020
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As intellectual property (IP) attorneys, we read with interest the redoubtable Mr. Kling's recent column describing a modest proposal for reforming the U.S. patent system. His remarks demonstrate none of the self-described "amateur character," as he raises some important and interesting questions. Indeed, his remarks capture sentiments expressed by courts throughout this nation's history. Nonetheless, we think his proposal is off base and we wish to offer a competing vision of patent law and policy.

Our Constitution wisely but tersely established the fundamentals of intellectual property law in Article I, section 8, clause 8, giving Congress the authority 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." The dichotomy of "Authors" and their "Writings," on the one hand, and "Inventors" and their "Discoveries," on the other, delineates the major features of the IP landscape — copyright and patents, respectively. (We in no way mean to slight trademark law here, but the issues Kling raises touch primarily on copyright and patent law.) Both exist to secure rights in otherwise intangible property; both exist to protect the creators and to benefit the public — but they do so in distinct ways.

Patents exist to provide a limited property right in new and useful things. They vest in their owners the right to exclude others from making, using, or selling (among other activities) the patented material for a limited time. In exchange for that right, the patent owner must surrender to the public a detailed description of the new and useful thing sufficient to allow a knowledgeable person ("one of ordinary skill in the art," close cousin of the law's "reasonable person") to make or use the invention. The rationale for creating this right is to spur innovation by providing exclusive incentives to innovators. The right is limited both by the requirement that the patentee put the public in possession of his or her ideas and by the time-limited nature of the right.

Copyrights exist to reward artists, composers, and authors for their contribution to the public repository of creative works. The reward to the creator is the protection from unauthorized copying of their creative work. The rationale is to give incentives to creators to pull their works out of their desk drawers and put them on display. The trade-off is similar to patents in that the creator is granted a right to prevent others from reproducing, preparing derivative works, distributing copies, or performing the copyrighted material (among other activities). In exchange, in theory, the public has access to a wider array of creative works to view, appreciate, and learn from.

A further public benefit has evolved in copyright law that does not exist in patent law — at least, not in the same way. The doctrine of "fair use" is designed to allow educators, other artists, and the general public, for example, to use a limited amount of the copyrighted creation in limited ways. For example, use of small bits of a book allow researchers, critics, and teachers to provide support for their propositions. The copyright holder retains full control over the work but the public benefits from the further ability to "handle" the creation — in a way that does not distort the work or allow another to claim credit for it.

The patent system has not developed such a mechanism. This is so in part because patents tend to deal more with the physical implementation of ideas rather than their expression. Thus, to practice a patented method or to make a patented device is to exploit the central right granted by patents. Fair use of copyrighted material, on the other hand, does not implicate the central right granted by a copyright — the exclusive use and control of the copyrighted item — as the "fair user" has merely been given limited access to portions of the item.

Furthermore, patents — unlike copyrights — already put the public in possession of the ideas embodied in the patent or the patented item. The free availability and enrichment of the public idea stock is wholly accomplished by the patent system. Others are free to use those ideas to create other new, useful things — including by "designing around" the existing, patented item. Copyright requires the fair use outlet to put the public fully in possession of (and to benefit from) the copyrighted item.

Kling's proposal misunderstands the differences between copyright and patents. Furthermore, his proposal amounts to compulsory, free licensing for certain inventions that fail to meet certain criteria. Other countries have tried compulsory licensing and have learned the anti-innovative effects of such laws. Additionally, in the U.S., the Patent Office and courts already factor in most of what he proposes.

Moreover, as an economist, Kling surely appreciates the genius of the market for determining what is worthwhile — and he must also appreciate the unpredictability of the market. Many inventions create the market which they come to dominate. The BlackBerry might be a perfect example of that. The owners of the BlackBerry idea should not be penalized for being ahead of the market. (Indeed, the feuding parties finally came to agreement late last week).

Finally, Kling aims to wipe out the rights of "mere" holders of patents, lumping together malicious extortionists with start-ups and other hopeful inventors. What he neglects is that IP revolves around rewarding people's intangible ideas; thus, aiming the patent system against holders of mere rights in ideas seems to turn the patent system against itself. Furthermore, 'holders of patents with no products' fits the description of the many start-up companies, in biotechnology for example, that have been the engines of innovation in many industries. Unequipped to handle the relentless marketing and capital demands of the massive pharmaceutical industry, these biotech start-ups are liberated by the patent system from the exigencies of the "business world" in order to focus on their area of expertise — scientific exploration and discovery.

Indeed, it is crucial not to employ hindsight, especially in evaluating patents. Of course, once something has already been invented, it's easy to see its practical implications, its marketability, its appeal, its usefulness. It is the genius of the U.S. patent system that it rewards inventors without forcing them to be fortunetellers.

There is much to reform about our patent system. More examiners, different incentives, and clearer rules would be a start. Another set of proposals comes from the experience with the human genome project. There, the balance of public and private interest and benefit — of proprietary research and academic inquiry — might offer some answers to patent reform, a current hot topic in the Congress. But in the end, we must be careful not to scrap the fundamental structure of our inventive system, the foundations supporting the most innovative society in the history of mankind.

Thomas J. Van Gilder, M.D., and Michael M. Rosen practice intellectual property law in San Diego.

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