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Tag: Patent Law

Washington and Lee Law Review - Patent Law

Article

eBay, Permanent Injunctions, and Trade Secrets

by Elizabeth A. Rowe

This Article presents the first qualitative empirical review of permanent injunctions in trade secret cases. In addition, it explores the extent to which the Supreme Court’s patent decision in eBay v. MercExchange has influenced the analysis of equitable principles in federal trade secret litigation. Among the more notable findings are that while equitable principles are generally applied in determining whether to grant a permanent injunction to a prevailing party after trial, the courts are not necessarily strictly applying the four factors from eBay. The award of monetary relief does not preclude equitable injunctive relief, and courts can find irreparable harm even where the loss has been compensated monetarily. Moreover, where injunctions are requested but denied, the lack of irreparable harm seemed to have been the factor most often articulated as the reason for the denial.

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Article

Disguised Patent Policymaking

by Saurabh Vishnubhakat

Patent Office power has grown immensely in this decade, and the agency is wielding its power in predictably troubling ways. Like other agencies, it injects politics into its decisions while relying on technocratic justifications. It also reads grants of authority expansively to aggrandize its power, especially to the detriment of judicial checks on agency action. However, this story of Patent Office ascendancy differs from that of other agencies in two important respects. One is that the U.S. patent system still remains primarily a means for allocating property rights, not a comprehensive regime of industrial regulation. Thus, the Patent Office cannot yet claim broad autonomy to make substantive political judgments. Indeed, the agency until now has wielded its power mostly in disguise. The other difference is that the era of broad Patent Office power is still in relative infancy. Recent years have seen important analytical and empirical studies of the agency’s dramatic changes, but its new and controversial practices are not yet entrenched. Meaningful reform is still possible, and it is desirable. Patent Office power has grown so much so quickly in part because the political valence of that power has been obscured by a blinkered focus on technological expertise. Understanding the agency’s pernicious structural choices—such as commingling separately delegated powers in order to evade judicial review and stacking adjudicatory panels to reach desired outcomes—in terms of politicization reveals significant risks of injury upon the agency’s ability to make credible commitments, and also illuminates potential solutions.

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Article

Demystifying Patent Holdup

by Thomas F. Cotter, Erik Hovenkamp, and Norman Siebrasse

Patent holdup can arise when circumstances enable a patent owner to extract a larger royalty ex post than it could have obtained in an arms length transaction ex ante. While the concept of patent holdup is familiar to scholars and practitioners—particularly in the context of standard-essential patent (SEP) disputes—the economic details are frequently misunderstood. For example, the popular assumption that switching costs (those required to switch from the infringing technology to an alternative) necessarily contribute to holdup is false in general, and will tend to overstate the potential for extracting excessive royalties. On the other hand, some commentaries mistakenly presume that large fixed costs are an essential ingredient of patent holdup, which understates the scope of the problem.

In this Article, we clarify and distinguish the most basic economic factors that contribute to patent holdup. This casts light on various points of confusion arising in many commentaries on the subject. Path dependence—which can act to inflate the value of a technology simply because it was adopted first—is a useful concept for understanding the problem. In particular, patent holdup can be viewed as opportunistic exploitation of path dependence effects serving to inflate the value of a patented technology (relative to the alternatives) after it is adopted. This clarifies that factors contributing to holdup are not static, but rather consist in changes in economic circumstances over time. By breaking down the problem into its most basic parts, our analysis provides a useful blueprint for applying patent holdup theory in complex cases.

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Article

Patents as Credentials

by Jason Rantanen & Sarah E. Jack

The conventional explanation for why people seek patents draws on a simple economic rationale. Patents, the usual story goes, provide a financial reward: the ability to engage in supracompetitive pricing by excluding others from practicing the claimed technology. People are drawn to file for patents because that is how these economic rewards are secured. While scholars have proposed variations on the basic exclusionary mechanism, and there is a general acknowledgement that patents can affect a firm’s reputation, the actual mechanisms of patents’ effect on individuals—human beings—remains relatively uncharted. In this Article we offer a concrete theory and framework for understanding the relationship between patents and individuals in terms other than the lure of supracompetitive pricing. Our framework focuses on the idea of patents as credentials: formal abstractions of a person’s inventive nature. By acting as boundaries and identifiable indicators, patents serve purposes beyond the strictly exclusionary. One purpose is to satisfy social or self-worth needs. The formalization of invention through a patent allows those human beings who want to be recognized by society as inventors to be so recognized, thus fulfilling an innate human desire. A second purpose is economic—but not because of the power to exclude. Instead, as the literature has recognized on the firm level, viewing patents as credentials acknowledges their role as economic signals, indicating particular characteristics possessed by the recipient. Considered in these terms, patents serving as credentials are all around us, from resumes and curriculum vitae to framed patents in offices. But these examples only scratch the surface of the role of patents as credentials in our society. By using the formal lens of patents as credentials, we demonstrate that there are reasons why individuals seek patents beyond the lure of supracompetitive pricing.

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