The Patent Paradox: Governmental Restrictions on the Competitive Use of Patented Intellectual Properties.

• Author: Fitzpatrick, William M.

INTRODUCTION

Patents represent one of the foundational cornerstones of the United States. In the Federalist Papers, James Madison (writing as Publius) proposed that one of the duties of government was to (a) secure ownership rights of intellectual properties (IPs) to their inventors; and (b) ascertain that inventors should have the right to control and harness their invention (Publius, 1788). This political sentiment was echoed one year later in the construction of Article 1 (Section 8) of the Unites States Constitution (1789). This founding document recognized the importance of patents to societal growth and evolution by authorizing Congress

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 (U.S. Constitution, 1789: Article 1, Section 8). Over the next 160 years, the statutory evolution of patent law by Congress served to define both the requirements for obtaining patents and the duration of competitive rights that would be afforded to inventors (U.S. Patent Law, 1952 as amended). Currently, U.S. patent law recognizes and authorizes the United States Patent and Trademark Office (USPTO) to issue three types of patents to inventors. These patent categories include (1) utility patents; (2) plant patents; and (3) design patents (USPTO, 2016). Utility patents are issued to inventions characterized by new/useful business processes, machines, specialized tools, software and even altered life forms (Justia, 2018; USPTO, 2016). Traditionally, about 98% of patents issued by the USPTO represent utility patents (USPTO, 2016). Plant patents are granted by the USPTO for inventions related to the creation of asexually reproduced plants. Plant patents can be awarded to inventors for the creation of new/distinct cultivated sports, mutants, hybrids, and other botanicals found in an uncultivated state (USPTO, 2016; Justica, 2018). Both utility and plant patents are granted for a period of 20 years from the date of the patent application. Design patents are awarded to inventions which craft new/original and ornamental designs that are included as part of other manufactured products. Design patents are awarded to inventors for a period of 15 years from the date of the patent grant (USPTO, 2016).

During the term of each of these patent grants, the patent will "permit its owner to exclude others from making, using, or selling the invention" (USPTO, 2016:1). This governmentally sanctioned right to exclude or eliminate competitors from commercializing similar IPs has sometimes been referred to as a patent monopoly. In Westerngeco LLC v. Ion Geophysical Corp., Judge Gorsuch noted that a "U.S. patent provides a lawful monopoly over the manufacture, use, and sale of an invention within this country" (Westerngeco LLC v. Ion Geophysical Corp., 2018: 2139). The U.S. Supreme Court has recognized that lawful monopolies evolving from patents can have positive benefits for both inventors and society (Festo Corp. v Shoketsu Kinzoku Kogyo Kabushiki, Ltd. et al., 2002).

The patent laws "promote the Progress of Science and useful Arts" by rewarding innovation with a temporary monopoly. U.S. Const., Art. I, [section] 8, cl. 8. The monopoly is a property right; and like any property right, its boundaries should be clear. This clarity is essential to promote progress, because it enables efficient investment in innovation. A patent holder should know what he owns, and the public should know what he does not. For this reason, the patent laws require inventors to describe their work in "full, clear, concise, and exact terms," 35 U. S. C. [section] 112, as part of the delicate balance the law attempts to maintain between inventors, who rely on the promise of the law to bring the invention forth, and the public, which should be encouraged to pursue innovations, creations, and new ideas beyond the inventor's exclusive rights. (Festo Corp. v Shoketsu Kinzoku Kogyo Kabushiki, Ltd. et al., 2002:730-731) When defining the patent monopoly as a property right, the courts have frequently reinforced the privileges of patent owners to have exclusive enjoyment/rights to commercially exploit their patented IPs for specific periods of time. In United States v. Bell Telephone Company of America, (1887), the Supreme Court addressed the dual issues of (a) Congressional intent in creating patent monopolies; and (b) governmental ownership rights over patented IPs. The Bell Telephone court reasoned that Congressional legislation had historically reinforced the exclusive ownership/property rights that an inventor had in their patented IPs and that "the purpose of the patent is to protect him in this monopoly" (United States v. Bell Telephone Company of America, 1887: 167). Additionally, this court also inferred that a patent "does not convey that which...the government could use or dispose of as it sees fit" (United States v. Bell Telephone Company of America, 1887: 167). Therefore, it would appear that late 19th century jurisprudence sought to permit inventors to exploit their patent monopolies while simultaneously limiting government control or interference with the property rights conveyed to inventors by patent grants (Waltersheid, 1995).

However, in the 20th and 21st centuries, both case/statutory law and the administrative practices of government agencies have significantly eroded both patent monopolies and the property rights of inventors to commercially exploit their patented IPs (Invention Secrecy Act, 1952; Lee, 1997; Taub, 2006; Fitzpatrick & Dilullo, 2007; Zoltek v. United States, 2006; 2012; 2016). This paper seeks to document these restrictions on the ownership, competitive and compensatory rights of patent holders through use of the S.E.A. paradigm.

S: SECURITY, SECRECY AND RELEVANCE TO NATIONAL SECURITY

The first component of the S.E.A. paradigm documents the recognition by the U.S. government that the dissemination and competitive exploitation of IPs by inventors can create threats to national security during both wartime and more peaceful time periods (Lee, 1997; Quist, 2002; Schultz, 2013). In response to these perceived threats, governmental agencies have attempted to curtail the disclosure and use of these IPs in order to permit the nation to both (a) maintain technological advantages over foreign nations/adversaries; and (b) prevent potential adversaries from using the IPs of U.S. inventors to threaten U.S. national interests (Quist, 2002).

ORIGINS OF GOVERNMENTAL POLICIES ON THE SECRECY OF INVENTIONS AND TECHNOLOGY

19th Century Secrecy Restrictions

Prior to the American Civil War, the United States Government exhibited little concern over the necessity for crafting and enforcing security precautions which restricted the public dissemination of civilian inventions (Quist, 2002; Patterson, 1980). This ambivalent attitude among government officials toward crafting invention security policies largely evolved from their belief that the scientific and technological advancements discovered by private inventors had limited impact on the conduct of military activities and warcraft (Patterson, 1980). However, this attitude began to shift in the mid-19th century when civilian inventions containing advancements in metallurgy, propulsion systems and explosives served as the basis for new army/naval weapons developments during the Civil War (Quist, 2002). After this conflict, government officials noted that foreign nations had begun to harvest militarily-relevant technologies from American inventors. This led to a realization among these officials that the federal government should undertake actions to safeguard inventions having potential military applications (Patterson, 1980; Quist, 2002).

Pursuant to this aforementioned objective, initial attempts to safeguard inventions/technologies having military value were undertaken by the Armed Services themselves (Quist, 2002). This effort was exemplified by the (a) development of information security classifications associated with military technologies (Patterson, 1980; Adjutant Generals Office Headquarters of the Army, 1869; 1897; War Department, 1907); (b) restricting access to classified information to military or governmental personnel having a legitimate need to access technologies incorporated into military assets (Adjutant Generals Office Headquarters of the Army (1897a; 1897b; War Department, 1907; Navy Department, 1909); and (c) prohibiting the unauthorized copying or duplication of technologies included in classified military assets (Adjutant Generals Office Headquarters of the Army (1897a; Relyea, 1974; 1981).

World War I

When the United States entered the First World War, the federal government concluded that an extension of invention/technological security policies to the civilian population was appropriate (Lee, 1997). Pursuant to this objective, Congress enacted legislation to create the Act of Oct. 6, 1917 (1917). As stated by the Act,

...whenever during a time when the United States is at war, the publication of an invention by the granting of a patent might, in the opinion of the Commissioner of Patents, be detrimental to the public safety or defense or might assist the enemy or endanger the successful prosecution of the war he may order that the invention be kept secret and withhold the grant of a patent until the termination of the war....(Act of October 6, 1917: 394) Upon issuance of the secrecy order, inventors were required to "tender" their invention to the federal government for use in supporting governmental purposes/activities. Thus, this legislation implicitly appears to sanction the U.S. government's ability to enforce a compulsory license of an inventor's IPs (Taub, 2006). At the conclusion of hostilities, the Act permitted inventor IPs to be evaluated and potentially awarded a patent. Contingent on their IPs being awarded a patent during the post-war...