The America Invents Act’s Repeal of Secret Commercial Use Bar is Constitutionally Infirm
|Written by Ron Katznelson, Ph.D.
President, Bi-Level Technologies
Posted: May 31, 2011 @ 7:01 pm
The “America Invents Act,” H.R. 1249, contains several provisions that raise substantial questions of constitutionality. Discussed in this article is an important aspect of the “first-inventor-to-file” provision that received no prior public attention because its drafters have concealed its meaning ever since its introduction in previous sessions of Congress. A day after the Senate voted to pass the bill (S. 23), a “clarification” for this poorly drafted section was entered into the Congressional Record as a fabricated “colloquy” that never actually took place on the Senate floor. The colloquy substantially changes the ordinary meaning of the bill to a meaning that had never been discussed publically – Senators had no opportunity to either learn of the “intended” construction or to debate it. While it is uncertain whether the courts would actually interpret the new statute as the colloquy intends, this paper analyzes H.R. 1249 under a construction which the bill’s drafters and the colloquy purport to achieve.
In an effort to “harmonize” U.S. priority laws with what the Europeans call “absolute novelty” laws of foreign countries, H.R. 1249 would enable companies to extend their commercial monopoly indefinitely by exploiting and profiting secretly from certain technologies for years and then taking out patents on these technologies. It would delay disclosure and retard the progress of the useful arts. If enacted, H.R. 1249 would abolish an essential pillar of the patent bargain established under the U.S. Constitution.
To begin, the Constitution empowers Congress with the authority to grant patents on inventions, but that authority is bounded, by Article I, Section 8, Clause 8:
The Congress shall have power … 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.
That is, Congress may not amend the patent laws to retard the progress of the useful arts and may not secure exclusive rights that are not of “limited times.” As shown below, features of H.R. 1249 violate these Constitutional limits on Congress’ power.
The repeal of the “forfeiture” bar violates the “limited times” and “progress” limits on Congress’ authority
Under current law, an inventor has one year from any public or commercial use to file an application, else the right to patent is forfeited. Over nearly two centuries of American jurisprudence, the terms “public use” and “on sale,” now incorporated in 35 U.S.C. 102(b)’s bar, have gained well-defined meanings, which were developed to address virtually all imaginable pertinent fact patterns with more than 640 key precedential court decisions. Under current law, a company cannot use an invention in secret for more than a year, and when commercial circumstances change, or when a leak of its secret is imminent reconsider and seek a delayed patent right to sue competitors. The foremost purpose of this bar is to prevent an inventor from exploiting the commercial value of an invention, while delaying unduly the beginning of the patent term and thereby prolonging the exclusive period.
The “forfeiture” rule of current law is Constitutionally mandated
This limit on the time to file a patent application after its first commercial exploitation is grounded in the Constitution. From the Patent Act of 1790 to the present day, any sale or public use of an article, if not closely followed by filing a patent application, has acted as a forfeiture of patent protection for any idea embodied in the article or its manufacture. The U.S. Supreme Court recognized that Art. I, Sec. 8, Cl. 8 of the Constitution vests in Congress authority, “unlike the power often exercised in the sixteenth and seventeenth centuries by the English Crown… It was written against the backdrop of the practices … of the Crown in granting monopolies to court favorites in goods or businesses which had long before been enjoyed by the public.” Graham v. John Deere Co., 383 U.S. 1, 5 (1966) (emphasis added). The Court articulated these principles and the grounds for the “public use” and “on sale” bar 180 years ago in Pennock v. Dialogue 27 U.S. 1 (1829):
“As long as an inventor keeps to himself the subject of his discovery, the public cannot be injured: and even if it be made public, but accompanied by an assertion of the inventor’s claim to the discovery, those who should make or use the subject of the invention would at least be put upon their guard. But if the public, with the knowledge and the tacit consent of the inventor, is permitted to use the invention without opposition, it is a fraud upon the public afterwards to take out a patent.”
27 U.S. at 4 (emphasis added). The Pennock decision was anchored to constitutional grounds as follows:
“If an inventor should be permitted to hold back from the knowledge of the public the secrets of his invention; if he should for a long period of years retain the monopoly, and make, and sell his invention publicly, and thus gather the whole profits of it, … and then .. he should be allowed to take out a patent, and thus exclude the public from any farther use than what should be derived under it during [the patent term,] it would materially retard the progress of science and the useful arts, and give a premium to those who should be least prompt to communicate their discoveries.”
27 U.S. at 19 (emphasis added).
Nearly 30 years after the Pennock decision, the Supreme Court reiterated the constitutional grounds to the “public use” and “on sale” bar in Kendall v. Winsor, 62 U.S. 322 (1858):
“The true policy and ends of the patent laws enacted under this government are disclosed in that article of the Constitution, the source of all these laws, viz., “to promote the progress of science and the useful arts,” contemplating and necessarily implying their extension, and increasing adaptation to the uses of society. By correct induction from these truths, it follows that the inventor who designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public comes not within the policy or objects of the Constitution or acts of Congress. He does not promote, and, if aided in his design, would impede, the progress of science and the useful arts.”
62 U. S. at 328 (citing U.S. Constitution, Art. I, Sec. 8, Clause 8; emphasis added).
H.R. 1249 violates the Constitution by giving inventors an indefinite right to use an invention before seeking a patent
H.R. 1249 would repeal the meaning of the terms “public use” and “on sale” as set forth in more than 640 federal cases and enable companies to extend their commercial monopoly indefinitely by exclusively exploiting and profiting from certain technologies for years and then taking out patents on these technologies. It would delay disclosure and retard the progress of the useful arts. By its nature, this provision is retroactive; upon enactment it would also permit established incumbent companies to immediately “evergreen” old secret technologies into a windfall of patents on subject matter for which patent protection had been previously forfeited. H.R. 1249 proposes in pertinent part the following (emphasis added):
102 (a) NOVELTY; PRIOR ART.—
A person shall be entitled to a patent unless—
(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention;”
To be sure, the reader who cannot discern in this language an exemption for secret commercial exploitation and for products that are in “public use” or offered for sale but that do not readily reveal the invention for “reverse engineering” is by no means alone. It is the ambiguity in this language, the meaning of the new statutory term “or otherwise available to the public” and the resultant redefinition of the terms “public use” and “on sale” that led to a clarifying Senate “colloquy.” Senator Leahy explained in the “colloquy” that the legislation does intend to “do away with current law,” so that secret commercial use and non-disclosing public uses and sales more than one year before filing an application would no longer be a bar to obtaining a patent. 157 Cong. Rec. S1496 (March 9, 2011).
With the clarification of this Senate colloquy and the House Judiciary Committee effort to incorporate it by attempting to amend the proposed provision quoted above, it becomes clear that the proposed statute exceeds the authority granted to Congress under the Constitution. Any attempt to allow inventors to commercially exploit an invention for an indefinite time, and to then seek a patent and the right to sue others for infringement years later, exceeds the congressional authority for “securing for limited times to … inventors the exclusive right to their … discoveries” and retards “the progress of science and the useful arts” set in Art. I, Sec. 8, Cl. 8 of the U.S. Constitution.
The effort to shoehorn foreign patent priority concepts and torture a well-developed 200 year-old American patent system that has a proven record as the best in the world into foreign structures that are inconsistent with the American Constitution and its laws is a futile effort that would likely be met with successful challenge on constitutional grounds. The illusory “harmonization” goal with no demonstrated tangible benefits compared to the existing system does not justify embarking on a risky legal adventure that will destabilize the American patent system and will doom it to decades of economically taxing legal uncertainty.
See http://bit.ly/Absolute-Novelty for the text of the full paper including an appendix listing 640 cases that define the current meaning of the terms “public use” and “on sale.”