Harmonization through condemnation: is New London the key to world patent harmony?

• Author: Oppenheimer, Max Stul

ABSTRACT

Since 1790, when two U.S. patent applicants have claimed the same invention, the patent has been awarded to the first inventor. Today, the United States stands alone in the industrialized world, and many argue that the United States should, in the interest of world patent harmony, change its system so as to award a contested patent to the first applicant. Of the arguments advanced to justify the change, the only ones that withstand scrutiny are that "all the other countries are doing it" and the hope that some concessions in other aspects of intellectual property or trade might be obtained in exchange. There are compelling reasons to resist the change, principally that (unless other fundamental aspects of U.S. patent law are changed as well) U.S. inventors will be disadvantaged.

Even if the arguments favoring the change are found to outweigh the arguments favoring the status quo, the power to grant U.S. patents derives from Article I, Section 8, Clause 8 (the Intellectual Property Clause) of the Constitution, which authorizes granting exclusive rights to authors and inventors. Other countries are not so constrained. An historical analysis of the Intellectual Property Clause and review of the types of evidence used by the Supreme Court in constitutional analysis lead to the conclusion that the Intellectual Property Clause does not permit granting patents to the first applicant in preference to the first inventor.

Alternate sources of Congressional power have been suggested (principally the Commerce Clause and the Treaty Power), but the Supreme Court has never found either sufficient to overcome a specific constitutional limitation of power. The only power which seems sufficient to accomplish the objective of harmonization within constitutional limits is eminent domain.

TABLE OF CONTENTS I. THE PROPOSAL TO HARMONIZE PATENT LAWS A. Patent Theory and the First-to-File Movement B. Early History and Overview of Current U.S. Patent Priority Law C. Overview of Non-U.S. Patent Priority Law D. The Economic and Political Arguments Regarding First-to-File 1. Arguments for Change 2. Arguments for the Status Quo II. THE CONSTITUTIONAL PROBLEM A. Article I, Section Eight: History and Interpretation 1. Pre-Constitutional History 2. The Drafting Debates, Ratification Debates, and Early Public Reactions 3. Early Judicial Precedent 4. Early Congressional Precedent B. Does Article I, Section 8 Constrain Patent Enactments? 1. Is the Preamble a Limitation? 2. Does Article I Limit Patents to the First-to-Invent? C. Can Congress Overcome Section Eight Limitations Through Other Clauses? 1. Can the Commerce Clause Overcome Section Eight Limitations? 2. Can the Treaty Power Overcome Section Eight Limitations? D. The Exclusivity Problem E. The Constitutionality of First-to-File III. CONSTITUTIONAL SOLUTIONS A. Eminent Domain and its Applicability to Patents B. The Challenges of Public Use and Just Compensation C. Reconciling Condemnation with Harmonization I. THE PROPOSAL TO HARMONIZE PATENT LAWS

Harmonization is usually good (1) if the result is that everyone does things your way. Harmonization is more complicated if it requires conforming behavior to someone else's norms. This latter case requires two analyses: one of the costs and benefits of the proposed change, and one of whether the proposed change violates some fundamental principle that overrides an otherwise favorable cost/benefit analysis. A recurrent proposal to harmonize world patent laws presents both questions for the United States.

1. Patent Theory and the First-to-File Movement

   Patents are limited monopolies granted by most countries to encourage innovation. (2) In the United States, patents are contrary to general principles favoring competition and therefore are granted only if they meet statutory requirements designed to assure that the public receives a valuable contribution in return:

   The monopoly privileges that Congress may authorize are neither unlimited nor primarily designed to provide a special private benefit.... [They are] intended to motivate the creative activity of authors and inventors ... and to allow the public access to the products of their genius after the limited period of exclusive control has expired. (3) Once such access has been achieved through one disclosure, there is no need to provide incentives for a second disclosure. (4) Although the Constitution does not explicitly limit the grant to one patent per invention, the Supreme Court has held that a patent may not withdraw technology from the public domain. (5) It follows that in the United States it would be unconstitutional (and even absent the constitutional constraint, undesirable) to grant more than one patent per invention. (6)

   In the great majority of U.S. cases, this principle of no more than one patent per invention is applied in the context of deciding patentability. If the claimed invention already appears in the prior art, (7) or is an obvious extension of the prior art, (8) there is no need to grant the patent because the public already has access to the information. Occasionally, however, there are circumstances in which the claimed invention is not in the prior art, but there are multiple claimants to the patent. (9) For example, if the prior art is interpreted to include only the domestic technology base, then a traveler who observes someone else's invention in a foreign country and is the first to bring news of the invention back home would be adding to the technology base. If several travelers each brought the same technology home, it would be logical and fair to award a patent to the first to file an application. (10) In this case, the contribution to the public is not the invention of the technology but its local dissemination. If the actual (foreign) inventor were then to travel to the domestic country and file a patent application, a different problem would arise: there would be a conflict between the first filer and the true inventor. Early patent systems and cases must be viewed in the context of the communications and transportation systems of the times, and care must be taken in applying them to modern day circumstances. (11)

   Derivation is another circumstance in which there might be multiple claimants. The true inventor might choose not to file a patent application. (12) Another individual might learn of the invention from the actual inventor and file a patent application. If the true inventor then filed a patent application, a conflict similar to the "patent of importation" scenario arises. However, here the result might logically depend on the motives of the "true" inventor. Sound policy might deny a government-sanctioned monopoly to a true inventor who had no intention of placing the technology in the public domain until after someone else had done so. (13)

   The final scenario in which there might be multiple claimants to a patent on the same invention is multiple independent invention by individuals who, unaware of the others' work, independently make the same invention. Here, each might be considered an "inventor" in the sense that the technological advance was made in ignorance of its previous discovery by another "inventor." To maintain the principle that only one patent may be granted for each invention, a choice must be made between individuals, each of whom is acting in good faith and following exactly the path the patent system wants: filing a patent application and surrendering a trade secret.

   It is this last scenario that poses the problem for those who seek international harmonization of patent laws. Two systems would logically further the goal of granting only one patent per invention: a first-to-invent system of awarding patents to the first inventor, thereby rewarding innovation, or a first-to-file system awarding patents to the first person to disclose the invention to the government by filing a patent application, thereby rewarding promptly putting the invention in the domain of public knowledge. (14) In the vast majority of cases, the choice of system does not matter; it is rare for a subsequent applicant to challenge the right of the first applicant to the patent. (15) The United States has always had a first-to-invent system. (16) When two applications claim the same invention, the right to the patent (17) is resolved by determining the first inventor in a proceeding in the U.S. Patent and Trademark Office (PTO or Patent Office), known as an "interference." (18) is The first patent statute conferred jurisdiction on the district courts to resolve competing claims of inventorship. (19) The modern administrative interference system was created in 1836, when the revised patent statute (20) shifted the responsibility for resolving interfering claims to the Commissioner of Patents. (21)

   Two consequences flow from the decision to adopt a first-to-invent system: (1) if two parties claim the same invention, the patent is awarded to the first to reduce the invention to practice (not the first to reach the patent office with news of the event); and (2) even if there is only one claimant, a defendant in an infringement action may invalidate the patent by showing that the patentee was not the first inventor. (22) It is possible for this to occur because the true first inventor may simply have chosen not to seek patent protection. In this case, no interference arises, and the patent will (unless the examiner finds a statutory bar) issue to the subsequent inventor.

   Other countries have first-to-file systems, awarding patents to the first applicant for a patent, (23) even if there is a prior inventor who also files an application for a patent. In the past, patents were awarded to individuals who, while not inventors, were the first to bring an invention within national borders and even to individuals who simply were in favor with the government. (24) Some countries began as first-to-invent countries but switched to first-to-file...