Abstract: ABSTRACT INTRODUCTION I. THE UNDERLYING ASSUMPTIONS A. Limiting Patentable Subject Matter to Concrete and Tangible Inventions Limits Both Blockage of Future Research and Innovation and Uncertainty in Patent Protection B. Innovation Is a Process, Not an Event, and Rational Patent Law Must Recognize That Fact C. When in Doubt, Lower Transaction Costs and Decrease Uncertainty II. A SUGGESTED PATENT STATUTE A. Section 100. Subject Matter B. Section 101. Utility C. Section 102. Novelty D. Section 103. Economic Requirements E. Section 104. Reduction to Practice F. Section 105. Disclosure and Claims G. Section 106. Claims and Their Construction CONCLUSION Introduction In four articles over five years, (1) I have criticized today's patent law as economically irrational in important respects. I am not alone. The chorus of critics is loud and reached a crescendo some time ago. (2) But it is one thing to be a critic and another to suggest improvements. The standard response to a vocal critic is to ask, if current law is so bad, how could we make it better? This Article is my attempt to answer that question. The Article is short for two reasons. First, much of the substance of my criticism appears in earlier writing and need not be repeated here. (3) Second, and more important, the statutory text that I propose here is the centerpiece of this Article. For reasons explained below, I have tried to keep it short. This Article covers only the substantive guts of the patent statute--the provisions governing what is patentable and how it must be disclosed. Issues like infringement and remedies, which are more difficult both conceptually and politically, as well as procedural aspects, I leave to later work. So this Article has only three parts. The first explains the principles on which I based the suggested statute and what kinds of provisions I left out. The second contains the suggested statutory language, with copious annotations explaining changes and correspondences with current law. The conclusion reiterates what is left out and suggests where we might go from here. I. THE UNDERLYING ASSUMPTIONS Readers of my earlier critiques (4) will notice a consistent theme: although patent law is quintessentially economic law, our current law ignores economic reality, current economic theory, and relevant economic variables. Thirty years ago, I published an article (5) arguing that patent law has minimal effect on individual incentives for innovation because most individual inventors work under contracts that assign all their work to their employers. Young and idealistic, I had suggested some rather impractical ways to restore individual incentives. Yet, in the last three decades, real life has moved decisively in the opposite direction. It is now abundantly clear--despite cries and protests from diehards--that virtually all important innovation in our country occurs in a corporate setting in which patents provide little or no direct economic incentive to individuals, (6) although they do provide bragging rights and some indirect rewards. (7) So the primary economic function of patents today is now abundantly clear. They attract investment of risk capital, including venture capital, to technologically risky projects. (8) The paradigm, of course, is pharmaceutical development, whose cost (in the billion dollar range) (9) no one would float without the protection from free riders that patents afford. (10) Unfortunately, current patent law not only fails to recognize that central function; it does not even mention investment or risk. Moreover, in many ways the four-century history of Anglo-American patent law is a tale of a fall from grace. Unlike current law, the old English Statute of Monopolies, adopted in 1623, explicitly recognized the economic character of patents. …
Publication Year: 2010
Publication Date: 2010-01-01
Language: en
Type: article
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