Dreyfuss: Classic Patent Scholarship

The next contribution to the Classic Patent Scholarship Project is from Professor Rochelle Dreyfuss (NYU), a giant in the field of intellectual property law. You can read her dazzling bio yourself, but more importantly, check out her scholarship. Her early work on the Federal Circuit is surely a classic in the institutional design literature, and she has revisited the court in later works that are also worth reading. She has also written insightful articles on topics ranging from business method patents to IP without IP, and I am currently enjoying her new book, A Neofederalist Vision of TRIPS (with Graeme Dinwoodie). She noted that many of the first classics that came to mind have already been mentioned, but she thinks these five works also belong on the list. Here are her additions, along with my own brief summaries:

Donald S. Chisum, Chisum on Patents (first published 1978, regularly updated on LexisNexis).

Chisum on Patents is currently the leading patent law treatise; it has been cited in about one thousand cases and two thousand law review articles. I'm not sure whether it has had the normative influence that some treatises have achieved, but it is probably the first place anyone looks when encountering an unfamiliar patent doctrine.

Paul Goldstein, The Competitive Mandate: From Sears to Lear, 59 Calif. L. Rev. 873 (1971).

This piece addresses the balance of power over innovation policy between the states and the federal government in light of then-recent Supreme Court cases—Sears (state may not use unfair competition to prohibit copying of unpatented object), Compco (same), Brulotte (no patent royalties post-expiration), and Lear (licensee may challenge patent validity). Goldstein argues that there is a federal mandate for a competitive economy, with "mixed origins in the Constitution's commerce, copyright, patent, and supremacy clauses interlarded with antitrust legislation and decision." The monopolies created by states through trade secret law, common law copyright, and unfair competition, like their federal counterparts, balance long- and short-range competitive interests, and "the legitimacy of a monopoly's balance can be gauged in terms of its capacity to advance the mandate." Thus, while the Sears outcome was likely correct, it failed by comparing the state law monopoly to federal patent law rather than to the federal competitive mandate—an approach that "necessarily repudiates a vast area of state doctrines." Three years later, when the Supreme Court held in Kewanee that state trade secret laws are not preempted, it followed roughly the approach advocated by Goldstein, and he approved of the overruling of the Sears approach through "benign neglect." For a more recent discussion by Dreyfuss of the importance of state trade secret law, see Dethroning Lear: Licensee Estoppel and the Incentive to Innovate.

Commission on Revision of the Federal Court Appellate System, Structure and Internal Procedures: Recommendations for Change, reprinted in 67 F.R.D. 195 (1975).

Dreyfuss explains the importance of this Commission, chaired by Senator Roman L. Hruska, in The Federal Circuit: A Case Study in Specialized Courts:

The CAFC partially owes its origin to proposals made by the Hruska Commission in the course of its study of the caseload crisis of the federal courts. Although the major recommendation of the Commission—the creation of an appellate court to handle cases referred by the Supreme Court—was rejected, Congress took note of a secondary finding that there was a special problem in patent law. Perhaps because of its own docket problems and its lack of expertise, the Supreme Court rarely reviewed the patent law decisions of the regional circuits. The resulting lack of national guidance created a microcosm of the difficulties identified by the Commission in the larger universe of the federal court system.

The report notes that "the perceived disparity in results in different circuits leads to widespread forum shopping" in patent cases and that the Supreme Court "should not be expected to perform a monitoring function on a continuing basis in this complex field."

Interestingly, the Commission specifically did not recommend a specialized court; it noted that "proposals for . . . a court of patent appeals have been raised periodically at least for the past twenty-five years" but that "on balance, specialized courts would not be a desirable solution" because the judges might develop "tunnel vision" and "impose their own views of policy."

Edmund W. Kitch, Graham v. John Deere Co.: New Standards for Patents, 1966 S. Ct. Rev. 293.

Kitch is most well known for the prospect theory of patents (his Nature and Function of the Patent System was on Madison's original list of classics and was mentioned by Risch and Lemley), but he also made an important contribution to the debate over nonobviousness in this piece. Merges's Commercial Success and Patent Standards article, discussed last week, described this as "a seminal article" that "argued that commercial success was an unreliable indicator of nonobviousness," and Kitch's work formed the basis for Merges's critique of commercial success (though Merges criticizes Kitch for having "since changed his position" in his prospect theory article). This piece is about far more than secondary considerations: Kitch walks through the historical development of the obviousness standard, showing that Graham "is simply misleading" in suggesting that § 103 simply codified a stable test for invention. He then discusses the problems courts will have to address in applying Graham, such how to define the pertinent art or what to do with inventions "where the solution was obvious but the existence of the problem was not."

The conclusion of Kitch's article grapples with broader themes and sounds much like many current debates over the patent system: he notes that the PTO grants many invalid patents due to the "heavy backlog of applications" and corresponding "pressure on examiners to dispose of them"; that even invalid patents can be used to extract settlements due to the high costs of litigation (estimated at the time to be a minimum of $50,000); that it might not make sense for the PTO to devote more resources to weeding out invalid patents because at that stage "it is difficult to predict whether the patent will ever be important or the subject of controversy" (similar to Lemley's Rational Ignorance at the Patent Office); and that courts thus have a responsibility to make adjudication of patentability more efficient.

John P. Walsh et al., Effects of Research Tool Patents and Licensing on Biomedical Innovation, in Patents in the Knowledge-Based Economy 285 (Wesley M. Cohen et al. eds., 2003).

This paper presents important empirical results on the extent to which patents impede follow-on research. The authors interviewed 70 IP attorneys, business managers, and scientists involved biomedical research and drug development in the United States. I described the results in a Note, Access to Bio-Knowledge: From Gene Patents to Biomedical Materials:

The interviewers summarized their findings: “We … find little evidence that university research has been impeded by concerns about patents on [biomedical] research tools.” (Their one exception is the case of genetic diagnostics . . . .) Their explanation was that researchers develop “working solutions” such as a “‘research exemption’ that is broader than the existing legal exemption and that is supported by norms of trust and exchange in the research community.” All nine university or government-lab interview respondents (as well as a third of the industrial respondents) admitted occasional patent infringement and said that infringement of research-tool patents was widespread. Interviewees from both academia and industry noted that suing universities for this infringement would be counterproductive, in that damages would be insignificant, opportunities for development of technology would be limited, and there would be a loss of goodwill in the biomedical community. As one university technology transfer officer said, “You will become an instant pariah if you sue a university.”

These interviews spurred more extensive surveys, and these empirical results caused Rebecca Eisenberg—whose work on anticommons problems in biomedical research and the experimental use exemption is already on the classics list—to rethink her earlier work. Dreyfuss notes, however, that more recent work by Heidi Williams (discussed earlier on this blog) and by Kenneth Huang and Fiona Murray has used different empirical methods to show that patented inputs can inhibit follow-on research.