While reading patent article submissions for the Yale Law Journal, I was delighted to come across The Inducement Standard of Patentability by Professors Michael Abramowicz and John Duffy (both at GW Law). This article will be published in YLJ this spring (making two patent articles in one volume!), and a draft is available on SSRN.
Abramowicz and Duffy make two novel contributions to the old economic idea that patents should only be granted for inventions that would not be created and disclosed absent the inducement of a patent. First, they argue that this "inducement standard," which was mentioned by the Supreme Court in Graham, can and should be read into an economic (rather than cognitive) definition of nonobviousness. Although they are probably stretching the Graham quote beyond its original intent, the authors explain that "'obvious' can mean not merely 'easily understood' but also 'easily discovered.'" Because this reading is both plausible and normatively desirable (for minimizing deadweight losses), the article argues that the Supreme Court should update § 103 (which was enacted to codify the common law of nonobviousness), just as it read economic analysis into the Sherman Act.
Providing a legal justification for the inducement standard is already a significant achievement, but Abramowicz and Duffy make a second contribution by refining the inducement standard to consider the dynamism of innovation and the prospect theory of patents (Part II) and by exploring how the standard could be administered (Part III). Their economic analysis is more sophisticated than previous treatments of the topic, and I hope it will rejuvenate the lines of scholarship about this theory. My biggest question about the article is whether the inducement standard really is administrable. It seems no less administrable than the current nonobviousness standard, but I fear that this concern will deter any courts from experimenting with this theory. Still, the article is one of the most interesting contributions to the patent literature that I have read in the past year; I highly recommend it.