THE MYSTERY OF SECTION 253(b).

Author:Gagnier, Matthew
 
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INTRODUCTION I. WHAT DOES IT MEAN TO DEDICATE TO THE PUBLIC? A. The Language and History of Section 253(b) B. Antitrust II. ANTITRUST SHIELD OR ANTITRUST REMEDY III. CONCLUSION INTRODUCTION

In 2014, Elon Musk, the renowned and socially-minded CEO of Tesla Motors, Inc., posted a blog on Tesla's website that stated the company would be freeing up many of its patents involved in the creation of the company's electric cars to any interested party. (1) Yet again, Musk astounded the public by choosing the betterment of society over corporate profits--stirring up a more positive image than any other corporate personality. But there are numerous questions that Musk's positive PR have drowned out: Where can you access the patents?; How did freeing up the patents get past the other executive officers and the shareholders?; and Why even free up the patents in the first place? The last question has the easiest answer on its face: for the betterment of mankind. However, such an answer is doubtful to have swayed an entire board of directors as well as any shareholder, and Tesla is not well known for turning a profit. (2) Tesla giving up its patents does not appear to be a reasonable business decision, unless there was an ulterior motive for doing so; say, it would be reasonable if Tesla did so to protect itself from something else.

Indeed, by freeing up its patents, Tesla is able to avoid liability for possible antitrust accusations down the line. How it manages to do this is not entirely [clear and may end up causing Tesla more headaches down the road, (3) but one avenue to this current situation, known as a "dedication] to the public," is found within the Patent Act. (4) Located within the current section 253(b), dedications to the public allow a patent-holder to relinquish their rights in a patent in order to allow any third-party to utilize said patent and to avoid any potential liability from having rights in the same. (5) Doing so grants protections to both patentees and patent-holders and may be considered to expand the prior art for the betterment of all, dependent on your point of view. Regardless, section 253(b) is one possible avenue that Tesla may have taken to give up its patents under the guise of benevolence.

Again, there are the problems with gaining the votes of the board of directors and keeping shareholders happy. In comes section 253(b), which, instead of being used simply out of the goodness of a patent-holder's heart, may be used as a defense against antitrust prosecution. How a dedication to the public can be used to prevent antitrust adjudication is not immediately clear from the language of the statute, and unfortunately, there is no case law that outlines how section 253(b) can be used to protect a patent-holder. (6) Instead, legislative intent is the lens through which we can determine the true purpose of section 253(b) and dedication to the public at its inception. Additionally, with the incredible expansion of many companies and embrace of vertical integration tactics, a discussion of the shift from section 253(b)'s shift from being an antitrust shield to an antitrust weapon for the benefit of a plaintiff is relevant to show how dedication to the public should become more relevant moving forward.

This comment will discuss these topics, beginning with an examination of the language of the subsection as well as its changes through an examination of legislative history. Part I will also include the historical relevance of the antitrust discussion going on during the section's birth. Next, Part II will discuss how section 253(b) is used as an antitrust shield and whether it should shift to become an antitrust remedy for plaintiffs instead. In that vein, Part II will also discuss the current state of patent monopolies and the context of contemporary society in determining the necessities of a legal shift.

  1. WHAT DOES IT MEAN TO DEDICATE TO THE PUBLIC?

    1. The Language and History of Section 253(b)

      The current language of section 253(b) reads as follows:

      In the manner set forth in subsection (a), any patentee or applicant may disclaim or dedicate to the public the entire term, or any terminal part of the term, of the patent granted or to be granted. (7) The key language here is the portion related to dedication to the public. unfortunately, case law on this subject is very scarce and provides little assistance in defining what this language means. (8) Because of this scarcity, defining section 253(b) requires an examination of the legislative history of the statute and the few discussions left behind by politicians.

      The dedication to the public language first originated in the House Bills working up to the Patent Act of 1952. (9) Specifically, in 1951 House Bill 3760, section 203, relegated the language to a second paragraph (instead of a subsection) that stated as follows: "In like manner any patentee or applicant may disclaim or dedicate to the public the entire term, or any terminal part of the term, of the patent granted or to be granted." (10) Again, "[i]n like manner" references the paragraph above, which is related to the irrelevant terminal disclaimer language. (11) From this point forward, the language would remain unchanged--the only alterations being the statute shifting from section 203 to section 253 over the course of the statute's creation and into the statute's life. (12) However, prior to the language's initial inclusion in House Bill 3760, there was one prior House Bill that did not include the dedication to the public language--House Bill 9133. (13) House Bill 9133 does include section 203, but the second paragraph that included the relevant language was absent. (14) What caused the change is outlined in the Report from the Committee on the Judiciary House of Representatives that accompanied House Bill 7794, which stated the following:

      There is now a provision in the statute under which an invalid claim must be disclaimed without unreasonable delay in order to save the rest of the patent. [I]f one claim of a patent is invalid, the patentee may take it out. He may sue on the remaining claims which have whatever validity they may have on their own merits. (15) It appears the drafters desired to leave an option for patent-holders to drop a portion of their patent in haste should the holder expect a challenge to a portion of the patent's validity. Litigation can be costly, and to have an easy out to avoid a court challenge could feasibly promote greater interest in patenting. P.J. Frederico gave the following commentary on why this section was added:

      No specific reason for this provision appears in the printed record, but its proponents contemplated that it might be effective in some instances, in combatting a defense of double patenting, to permit the patentee to cut back the term of a later issued patent so as to expire at the same time as the earlier issued patent and thus eliminate any charge of extension of monopoly. (16) Extending the monopoly would mean that, if an earlier patent existed as a part of a newer patent--thus continuing the limited monopoly right--the patent-holder would hold monopoly rights over the older patent past the expiration date. This problem is known as double patenting and would be an issue in these scenarios, as it would mean the newer patent would essentially cover both the greater invention and any lesser parts that had been previously patented. (17) Therefore, the intent of including the language for dedication to the public would assumedly...

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