The Constitutional Argument Against Prior User Rights
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: June 14, 2011 @ 4:21 pm
Lately there has been much made of the attempts to argue that patent reform efforts in the House of Representatives is unconstitutional due to the inclusion of first to file provisions, which would change U.S. patent law to give a patent to the first inventor to file rather than to one who is the first inventor in time. These specious arguments have been exposed here and elsewhere. See Does “Inventor” in the Constitution Mean “First Inventor”? and Did the Supreme Court Rule First to File is Unconstitutional?
As Patent Doc Kevin Noonan pointed out recently, what hasn’t been much discussed is the fact that prior user rights violate the intent of Article I, Section 8 of the U.S. Constitution. I have alluded to this in some articles, and have also alluded to the fact that first to file provisions are more in keeping with the purpose of the so-called Patent Clause to the U.S. Constitution. The very reason for granting Congress the power authorize the granting of patents is to promote the dissemination of information. That is how society benefits, and it is how progress is promoted. I will not go so far as to say that first to invent is unconstitutional, that would be nonsensical. Neither will I go so far as to say that prior user rights are unconstitutional. Nevertheless, what I will say is that first to invent and prior user rights embrace a philosophical choice that is antithetical to the very purpose of the Patent Clause.
Before proceeding it is probably worth defining the term “prior user rights.” Prior user rights is a defense to patent infringement that prevents those who have previously used the patented invention from being infringers. In many parts of the world there are strong prior user rights, which allow those who keep innovation as a trade secret hidden away from the public to later use those trade secrets as a defense to a patent infringement lawsuit. You can’t sue one who has prior user rights for patent infringement because they have been using that newly patented innovation as a trade secret. So the party that disseminates the information for the benefit of the public loses in favor of the party that kept the innovation a closely guarded secret.
For about a decade the United States has had a very limited prior user right defense applicable only to business method patents. Pursuant to 35 U.S.C. § 273, if a person or entity actually reduced a method of doing or conducting business to practice at least 1 year before the effective filing date of the patent, and commercially used the method before the effective filing date of the patent, the prior using party could not be found to be an infringer. This prior user right associated with business method patents actually made a lot of sense. Prior to the decision of the United States Court of Appeals for the Federal Circuit’s decision in State Street Bank it was widely accepted as universally true that business methods were not patentable in the United States, and in fact were not patented in the United States. The State Street decision changed all of that, making business methods patentable. So it would hardly seem fair to punish those as infringers if you kept your method of doing or conducting business secret and didn’t obtain a patent, because after all that was the only way you could protect your method because a patent wasn’t an option. See Kewanee v. Bicron, 416 U.S. 470 (1974)(“trade secret law protects items which would not be proper subjects for consideration for patent protection under 35 U. S. C. § 101.”)
What about those who could have obtained a patent and chose to keep the innovation hidden? Is there any strong policy or logical reason to provide a prior user rights defense to those who conceal and could have obtained a patent? Simply stated the answer is no, as was amply described by the United States Supreme Court in Kewanee.
The laws of the United States have never chosen to prefer the secret, non-informing use over the rights created by those who willingly disclose. The disclosure of information is what promotes the progress and why patent rights have always heretofore trumped trade secret rights, but prior user rights would for the first time in U.S. history exalt trade secrets over patents. All you need to do to see the nonsense involved in such a proposition is to ask yourself — what secret information not known to a scientist or inventor ever contributed in facilitating a new advance? Prior user rights are antithetical to the Constitutional purpose of Article I, Section 8 of the U.S. Constitution.
What follows is a sampling of descriptions of the preference for disclosure, described as the very purpose of a patent system by a variety of courts, including the United States Supreme Court. The cases I have located that most directly support the proposition are presented in chronological order, which emphasis added in some cases.
- In Pennock v. Dialogue, 27 U.S. 1 (1829), the Supreme Court explained that it would be reasonable for Congress to require that the public be put in possession of secret information in exchange for the granting of an exclusive right.
- In Kendall v. Winsor, 62 U.S. 322 (1858), the Supreme Court explained: “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.”
- In Mason v. Hepburn, 13 App. D.C. 86 (D.C. Cir., 1898): “the inventor, who, designedly, and with a 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…”
- In Brown v. Campbell, 41 App. D.C. 499, 501-502 (D.C. Cir., 1914): “The man who secretes his invention makes easier and plainer the path of no one. He contributes nothing to the public. Over and over has it been repeated that the object of the patent system is, through protection, to stimulate inventions, and inventors ought to understand that this is for the public good. Where an invention is made and hidden away, it might as well never have been made at all,–at least so far as the public is concerned. The law owes nothing to such an inventor, and to permit him to lie in wait, so to speak, for one who, independently and in good faith, proceeds to make and disclose to the public the same invention, would be both unjust and against the policy of the patent laws. In the eyes of the law he is not the prior inventor.”
- In Universal Oil Products Co. v. Globe Oil & Refining, 322 U.S. 471 (1944) Justice Reed explained: “As a reward for inventions and to encourage their disclosure, the United States offers a seventeen-year monopoly to an inventor who refrains from keeping his invention a trade secret.”
- In Graham v. John Deere Co., when discussing the view of Thomas Jefferson and the Constitutional underpinnings of Congressional power to grant patents, the Supreme Court explained: “The patent monopoly was not designed to secure to the inventor his natural right in his discoveries. Rather, it was a reward, an inducement, to bring forth new knowledge.”
- In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., 396 U.S. 57 (1969), the Supreme Court explained: “Innovation, advancement, and things which add to the sum of useful knowledge are inherent requisites in a patent system…”
- Horwath v. Lee, 564 F.2d 948 (CCPA, 1977): “[t]he man who secretes his invention makes easier and plainer the path of no one. He contributes nothing to the public… Where an invention is made and hidden away it might as well never have been made at all, at least so far as the public is concerned.”
The fact that prior user rights given to those who could have sought patent rights is antithetical to the purpose of Article I, Section 8 of the U.S. Constitution can hardly be denied.
It is also correct to observe that the fundamental underpinnings of first to invent can be called into question using the same rationale as provided to call into question the propriety of prior user rights. Nevertheless, the history of U.S. patent law is replete with illustration after illustration of courts on every level, and Congress too, embracing the first to invent principle. As a result, it is a fools errand to engage in a debate about whether first to invent is constitutional; it is now and always has been. It is not, however, without merit to ask whether the core purpose of the Patent Clause is promoted by first to invent.
First to invent has historically be viewed as a tremendous benefit for independent inventors and small businesses. As appealing and romantic the notion that first to invent benefits “the little guy” the reality is that it does not. While it seems as if first to invent should result in David prevailing over Goliath, in reality that virtually never happens. First to invent is also confusing because its name purports to say it all, but the requirements are extremely onerous, which is why it virtually never assists independent inventors or small businesses.
Given that what is required to demonstrate one is “first to invent” is almost universally misunderstood by those it was historically believed benefited from first to invent, and further given that first to invent helps virtually no independent inventors or small businesses in reality, it seems legitimate to question whether the continued clinging to first to invent is warranted. If first to invent frustrates the desire to most quickly disseminate knowledge and information that others can build upon, which promotes the progress, why should we continue to embrace it when the perceived functional benefits no longer exist? Is there a justification to ignore the Constitutional purpose of disseminating information and knowledge in favor of a legal construct that provides none of the romanticized benefits we have held so dear for so long?
Personally, I no longer see any reason to cling to first to invent when we already have a de facto first to file system anyway. There is no justification in my mind for subverting the Constitutional purpose for a benefit that has long since ceased to exist. There is, however, an enormous reason to fight and fight hard over prior user rights. That directly and unambiguously subverts the Constitutional purpose expressed in Article I, Section 8, and it would be an unmitigated disaster for independent inventors and small businesses.
Independent inventors and small businesses are missing the big picture as they fight the losing battle over first to file. It is time to wake up and stop making specious first to file arguments and fight the big bad wolf, the 800 pound gorilla and the elephant in the room all wrapped together. That three-headed monster is prior user rights.- - - - - - - - - -
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About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.