The Hamiltonian Origins of the U.S. Patent System, and Why They Matter Today

• Author: Robert P. Merges
• Position: Wilson Sonsini Goodrich and Rosati Professor of Law and Technology, U.C. Berkeley Law School
• Pages: 2559-2590

2559

The Hamiltonian Origins of the U.S.

Patent System, and Why They Matter

Today

Robert P. Merges*

ABSTRACT: I revisit one of the earliest administrative functions of the

United States government, the granting of patents, to show why the U.S.

Patent Office fits so poorly with the contemporary model of an Executive

Branch agency in the modern Administrative State. In parallel with other

early “proto-agencies” the Patent Office participated in the most important job

of the new national government: economic development. Because of the

importance of this policy, and the limited power of the new federal

government, Congress, courts, and the executive branch emphasized concerted

action rather than separation of powers.

The Patent Office had been performing its basic function for nearly one

hundred years when the modern “administrative revolution” began its sweep

though the federal government. The modern administrative state was created

to counterbalance the emergent power of large, concentrated industries; it had

little relationship to the original Patent Office mandate from Hamiltonian

times. As a consequence, contemporary administrative law is a poor fit for the

Patent Office. Administrative law, especially the Administrative Procedure

Act (“APA”), governs power relations between federal agencies and the

industries they regulate, with courts often acting as referee. But the Patent

Office grants government-sanctioned property rights to dispersed inventors in

an extremely wide variety of industries, and lets private investment,

transactions, and enforcement take over. Since its founding, the Patent Office

has been charged not with regulating concentrated industry, but with

handing out a small dollop of state power to dispersed parties in the form of

individual property rights. Although some features of the modern

administrative apparatus surely apply to the Patent Office it is overall best

left to the looser-fitting understandings of the Hamiltonian economic

development state.

*

Wilson Sonsini Goodrich and Rosati Professor of Law and Technology, U.C. Berkeley

Law School. My thanks to the Symposium participants and the Iowa Law Review editors for very

helpful comments. Any remaining errors would be a shock after all this insightful help, but if

there are any they are due not to these generous colleagues but to my stubborn character defects.

2560 IOWA LAW REVIEW [Vol. 104:2559

I.INTRODUCTION ........................................................................... 2560

II.SOME HISTORY ............................................................................ 2562

A.HAMILTON’S INFLUENCE ON PATENTS .................................... 2562

B.THE EARLY PATENT OFFICE: A PROTO-ADMINISTRATIVE

AGENCY ................................................................................ 2567

C.THE GENERAL LAND OFFICE .................................................. 2572

D.INVENTIONS AND LAND: THE PROPERTY STRATEGY ................. 2576

1.Instrumental (Not Reified) Property ......................... 2577

III.SO WHAT? A BIT OF PATENT EXCEPTIONALISM .......................... 2578

A.FEWER RULES, MORE CASES ................................................... 2578

B. SKIDMORE, CHEVRON LESS .................................................. 2582

1.Validity Determinations and the Overall System

of Patent Quality Assurance ....................................... 2583

2.Patent Law is a Seamless Web; Or At Least, A

Tightly Intertwined Body of Rules ............................. 2585

IV.FINAL THOUGHTS ....................................................................... 2589

I. INTRODUCTION

I revisit one of the earliest administrative functions of the United States

government, the granting of patents,1 to show why the U.S. Patent Office fits

so poorly with the contemporary model of an Executive Branch agency in the

modern Administrative State. The Patent Office participated in the most

important job of the new national government: building the institutional

infrastructure to support and promote economic activity. It did this job in

parallel with other “proto-agencies,” such as the Post Office; the General Land

Office (succeeding a division of the Treasury Department), which surveyed

land and issued title to settlers; the Customs Service; and the Treasury

Department’s Coastal Trade Office. In these early years, the overriding policy

of rapidly building out a robust national economy provided a unifying force

that blurred the lines between legislature, courts, and the executive function,

and even (at times) between citizen and state.2

1. Cf. Jerry L. Mashaw, Recovering American Administrative Law: Federalist Foundations, 1787

–1801, 115 YALE L.J. 1256, 1260 (2006) (“[T]he first independent agency at the national level

was not the ICC [Interstate Commerce Commission, created in 1887], but the Patent Office,

created ninety-seven years earlier.”).

2. Cf. id. at 1277 (“[In its earliest years,] the national govern ment’s primary attentions

were directed to defense and development. Land grants, protection of intellectual property, the

creation of post offices and post roads, and the promotion of the carriage of goods by sea were

all crucial to the creation of the new national market.”).

2019] HAMILTONIAN ORIGINS OF THE U.S. PATENT SYSTEM 2561

The Patent Office had been performing its basic function for nearly one-

hundred years when the modern “administrative revolution” began in the

federal government. This revolution, dating from the 1870s, was a response

to the accumulation of private power and the complex problems brought on

by rapid industrialization. The powerful federal agencies created during this

era—beginning with the Interstate Commerce Commission, continuing with

the Food and Drug Administration, and then later the “alphabet soup” of

agencies from the 1920s to the 1940s—had much to do with

counterbalancing the emergent power of large, concentrated industries and

very little to do with the original Patent Office mandate from Hamiltonian

times. As a consequence, contemporary administrative law is a poor fit for the

Patent Office. Administrative law, and in particular its formalized

instantiation in the Administrative Procedure Act (“APA”), is the culmination

of legal oversight of the Regulatory State. It governs power relations between

federal agencies and the industries they regulate, with courts often acting as

referee. But the Patent Office grants government-sanctioned property rights

to dispersed inventors in an extremely wide variety of industries, and then gets

out of the way while private investment, transactions, and enforcement take

over. As one of the original proto-agencies, the Patent Office is a creature of

its time, charged not with regulating concentrated power but with handing

out a small dollop of state power to dispersed parties in the form of individual

property rights. Although some features of the modern administrative

apparatus surely apply to the Patent Office (e.g., hiring practices and

collective bargaining), the historical and “organic” interrelations between the

Office and other branches of government are generally best left to the looser-

fitting understandings of the pre-APA world.

In practical terms, I am arguing in support of two propositions. First, we

should not push for Chevron deference to Patent Office interpretations of the

Patent Act. Second, we should respect the traditional role of Article III courts

in the patent system by (a) continuing the practice of court review of

individual Patent Office decisions (except when prohibited by statute), by

(b) respecting the courts’ ultimate authority in interpreting the Patent Act

(i.e., bypassing the Chevron station), and by (c) supporting judicial

innovations designed to adapt to changing conditions. Examples of adaptive

innovations include the creation of the “invention” (later, obviousness) test

in the 1850s, the calling into existence of the double patenting doctrine in

the later 19th century, and other judicial innovations discussed later in this

paper.

In my decidedly minority view, probably the best way to ensure that the

Patent Office continues to promote economic activity under rapidly changing

conditions is to honor the legacy of its original mission and its cooperative,

interactive relationship with the other branches of government. We don’t

need so much to invent a modern administrative law for patents, in other

words, as to breathe continuous life into the pre-APA common law style of