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The Constitutional Argument Against Prior User Rights


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: June 14, 2011 @ 4:21 pm
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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

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.

 

49 comments
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  1. Gene,

    Well put.

    But don’t forget the words “secure”, “exclusive” and “dis-covery” as used in the Constitution:

    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.

    One who originally finds something but does not dis-close (a.k.a. dis-cover) does not have a respective “Discovery”.

    On the other hand, when another independently finds something and does “dis-cover” it for benefit of society, that other person does not receive “secured” exclusive rights if Congress gives superior rights (prior user rights) to he who hides and refuses to un-cover.

    Therefore, a stronger case exists for arguing that prior user rights are unconstitutional.

  2. I don’t see the constitutional issue here either unless you read in a negative-Intellectual Property clause.

    Art. I. Sec. 8 cl. 8 says: “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;”

    In other words, Congress is constitutionally empowered to give “inventors” an exclusive right. Congress has decided that that right goes to those inventors who choose disclose. As been said, it is well within Congress’s constitutional authority to elect among inventors. Moreover, by arguing by analogy to how the copyright laws have played out, one could see how Congress could even arrive at two “inventors” under some independent invention doctrine like the independent creation doctrine in copyright law.

    Prior user rights make a relevant assumption: it was previously “invented” BEFORE the filing. Put another way, “prior users” are also inventors. Congress is making a judgment about how to treat another inventor just like copyright law treats independent creators not as infringers but as authors. This is far different than Congress exempting non-inventors from liability which would likely violate the requirement that Congress secure “exclusive rights” to Inventors.

    The only way to find prior user rights as unconstitutional is to read some other obligation into the Intellectual Property Clause a sort of negative intellectual property clause.

    I don’t think the public policy arguments matter here. Congress is tasked with the balancing of the public policy requirements. One can see that giving a second inventor (i.e., the non-prior user) a patent promotes the progress, but their right is narrowed against those that might in fact be prior inventors.

  3. Following up from my earlier comment, I think that if Congress decided that an inventor is not entitled to a patent because of secret, hidden, trade secret uses/art (or more likely permitted a patent to be invalidated over such art) then there is an argument that that would violate the “Promote the Progress” prong.

    But I see prior user rights quite differently.

  4. So Step,

    Just to play Devil’s Advocate, are you saying that the Congress led changes that made prior user rights for business method patents are unconstitutional?

    After all, that law passed by Congress has the very same “violations” of “secure”, “exclusive” and “dis-covery.”

  5. The answer to your question, Dogma, is NO.

    Expansion of the Prior User Rights in § 273 to all process patents under HR 1249 deviates from the narrow original congressional purpose of addressing the inability of many prior users of business methods to protect themselves via the patent system because those were not considered patentable. The business method defense of § 273 was enacted on November 29, 1999, a little over a year after the Federal Circuit decided State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed.Cir.1998). In 1998, the Federal Circuit’s State Street decision put to rest formally and finally the notion that “methods of doing business” were not patentable. The State Street decision eased the test for patent eligibility by holding that an invention that involves an abstract idea can still obtain patent protection so long as that invention includes some practical application of the idea. State Street, 149 F.3d at 1374–75. Following State Street, a wave of businesses began seeking patent protection for techniques used in their businesses that they previously believed unpatentable. [See H.R. Conf. Rep. No. 106–464, at 122 (Nov. 9, 1999) (“In the wake of State Street, thousands of methods and processes used internally are now being patented. In the past, many businesses that developed and used such methods and processes thought secrecy was the only protection available. Under established law, any of these inventions which have been in commercial use – public or secret – for more than one year cannot now be the subject of a valid U.S. patent.”)].

    With this transition of subject matter eligible for patenting, new risks emerged for users of existing business methods technologies who previously could not be called “inventors.” Indeed, note that nowhere in § 273 the term “inventor” or “reduction to practice” is used in reference to prior users and their commercial use. Congress recognized, in passing § 273, that “[i]t would be administratively and economically impossible to expect any inventor to apply for a patent on all methods and processes now deemed patentable.” H.R. Conf. Rep. No. 106–464, at 122.

    It appears from the legislative history that the clear purpose of Congress’ enactment of § 273 was to protect both the business method patent owner, as well as the numerous businesses that may have long used the patented method or process prior to the method being patented. This is a totally different situation than that contemplated in HR 1249, where there is no subject-matter-justification for extending prior user rights to those who could otherwise patent their inventions but chose to keep them as trade secrets. Gene’s point on prior user rights is not weakened a single bit by the fact that § 273 existed for over ten years.

  6. Is the prior user right in the Bill very different from the onme in the European Patent Convention? I ask because the one in the EPC is i) very narrow in the protection it confers on prior users and ii) the necesary counterpart to Europe’s definition (everything already “made available” to “the public”) of the “state of the art” for purposes of novelty and obviousness. Secret prior use does not invalidate. No on sale bar.

    Does anybody know of a case, in Europe since the EPC started in 1978, where the prior user provisions made a difference? If so, does that case vindicate Gene’s concerns?

  7. Ron,

    The answer is “Yes,” and you have shown no reason why the violation is allowed for a certain class of patents (in the consitutional sense). You gloss over the subtle point of the constitutional/unconstitutional issue (the issue of what defines the unconstitutional aspect).

    It matters not whether Congress had a “narrow original purpose” if what makes the idea unconsitutional lies at the heart of that purpose. In a gross analogy, it would be like passing a law allowing the murder of a very select set of people – there could be a “narrow original purpose,” but such avails not in a constitutional correctness question.

    I get that people woke up one day and thought – “we did not think these patentable before.” Convenience is not an excuse for unconstitutionality – is it? If you want to make a law that goes agains tthe constiuttion, there are appropriate legal avenues – think constitutional amendments – otherwise, all laws must follow the consitution – even oops we are surprised laws. The white elephant is that § 273 has existed for over ten years, and the legal mechanism (not the rationale) is exactly the same. It is that very same legal mechanism that now draws constitutional fire.

    That is, after all, the entire point of my question.

    Hint: The proper answer for the advent of business method patents (which do actually date to the earliest of our patent system) would have been to deny any such patents for failing to meet the legal requirements of novelty and nonobviouosness if those patents were already being practiced – not to make an unconstitutional (or is it?) law that has the very same “violations” of “secure”, “exclusive” and “dis-covery.” that gird the constitutional question of the pending legislation.

  8. And if the prior user just assumed his “invention” was the obvious solution to a problem until he suddenly received a cease and desist order from somebody else trying to patent it?

  9. As an innovator but non-lawyer I’m resonating with what I understand to be Mike’s comment. One man’s common sense problem solving all too often becomes another man’s invention. Prior use rights seem a practical way to respect those, in the real world, somewhat overlapping concepts.

  10. Is it not possible that under the present statute, if someone (A) invents but does not patent and a second someone (B) invents and tries to patent, that neither will obtain a patent? Under 102(a), one may not get a patent if the invention was “was known or used by others in this country . . . before the invention thereof by the applicant for patent”.

    To go further, A invented on January 1. B invented on February 1. B files July 1. A files October 1. Can it be said that A neglected or delayed? Yet under the notion of FITF, A will be denied a patent. Assume, next, that A has a group of co-workers who worked on the invention. (This is to get around the use of the plurals in 102(a).) This group uses the invention. Even though B is FITF, B should not get a patent, either.

    Or am I totally misunderstanding what the plain language of 102 (a) means?

  11. OT, but too good to pass up:

    http://news.yahoo.com/s/afp/20110614/ts_afp/usspacesun

    I am guessing that somehow we will find a way to blame mankind for perturbing the sun’s behavior.

  12. I understand and agree with Gene’s viewpoint about trade secrets and the ‘deliberate’ withholding of an invention from the public. However, I have concerns as to how far a good lawyer could expand the interpretation of “withholding of an invention from the public” to effectively include all prior usage where the inventor did not explicitly make it available as prior art (eg. publish a paper about their invention, make a patent application, or release the invention under a public/open source license), thereby making prior use an infringement of a subsequently issued patent.

    Why is this a concern?
    Looking through some of the patents being cited by Microsoft as being infringed by Linux/Andriod, it is obvious to me that many of the IT systems I’ve designed and built over the years contain many components that could of been patented, but were not for all the normal reasons: focus was on project delivery to time and budget, company not setup to capture and re-use/exploit the fine grained IP it was creating, invention seen to be of limited application, etc, etc. So these systems and products contain inventions that whilst not explicitly disclosed haven’t been deliberately hidden in the trade secret sense…

    Secondly looking at bio-tech, we have seem examples of companies attempting to patent crops that are effectively exact replica’s of native crop species and thereby attempt to prevent the community that has used and maintained that (native) crop from exploiting it…

  13. Good points Gene, but please also note that:
    1. U.S. present and proposed “prior user rights” neither obtain any patent or invalidate any patent, they merely provide a limited personal [individual] defense for someone who has previously invented and previously commercially used an idea to make a commerical product.
    2. No one has ever even sucessfully used the present prior users statute!
    3. A major concern was and is software and/or business methods that the original inventors did not patent because they did not think it was validily patenable. But if someone else later gets a patent on it [by not citing prior art to the PTO and/or getting an easy examiner] even it would not be ultimately held valid they could get threatend with a very expensive patent suit.
    4. Without a prior user defense, under the proposed first to file system which also eliminates the present 102(g) DEFENSE, any “grace period” or other filing delays becomes much more dangerous to rely on, because someone else could file a “paper” patent application that ultimately [with cat-bird-seat targeted late-claiming changes, like Lemelson's] covers real product developments on which one has already spent millions in R&D, even if only filed one day earlier. This has nothing to do with deliberately concealing anything.

  14. Roland,

    Not to diminish your concerns (which I agree are very real), I would point out to you that the proper avenue to take would be to not grant a patent on something that is already in the public domain – such needs no new law (only application of existing law), and avoids the constitutional/unconstitutional dilemma of ‘prior user rights” entirely.

    Yes, this does raise a different (but not constitutional) dilemma of how to provide such undocumented knowledge to those who must make the decisions on granting patents – and I would further note that such a dilemma is universal to all categories of patents.

    And Yes, this does run smack into the very reason for having patents – to promote the dissemination of knowledge.

    I sympathize with the real world constraints of individuals and companies operating to do what they do (and that dissemination simply may not be a part of that), but on the flip side – the founding fathers made the decision to grant Congress the power to grant the exclusive right – even over those who use in secret (and yes, “in secret” does include unpurposeful secret use – i.e. unpublished (for whatever reason) use. So yes, people are busy and yes, people choose not to disseminate their knowledge, but to put it bluntly, the founding fathers said “too bad” (or at least gave Congress the authority to say that.

    Motivation for dissemination comes in two forms – the carrot and the stick. The carrot is the patent right. The stick is having to abide by someone else taking the time (and money) to obtain that patent right. This is simply human nature, and the nature of politics, at work.

  15. @Roland

    I agree with the points you’ve made and want to just add:

    That Prior User Rights are only a problem for the patent community because they, allow independent development that by no law is such development required to be disclosed. Disclosure is a patent matter for those engaged to some extent with the PTO– and such law doesn’t reach into the private work of even a patent holder as a Corp. If the law gos on the side of the patent system on this, means that copyright as well any idea, notion or even what someone is thinking must be made known to the patent community because they wish to avoid stepping on a land-mine on the way to the PTO.

    Its creepy 1984’ish , big brother wants to know what you’re thinking as well working on. Note Prior User Rights also supports prior art as protection for all work not patented as well that which is. While a great deal that remains un-patented and the remember the added word “process” that opened doors to that which was never patented then –so, no Prior User Rights will open even more doors. Imho.

    It remains just questions about Prior User Rights as no case yet has gone before the SCOTUS, to settle the matter once and for all. To try and build off MS v i4i for answers will continue what is nothing more then what it is right now–questions. Let us see if *we* could get the SCOTUS to settle this question of Prior User Rights, because I welcome to hear the high Court say with my own ears: That no development can be a private one. That patent law is the law of the land and applies to all — individual or otherwise.

    Never going to happen !

  16. typo:

    was to read:

    [...] which is. While a great deal that remains un-patented and [ to remember the added word ] [...]

  17. tifoso-

    I think you are understanding 102(a) properly. The only thing I would point out is that if A invents and keeps the invention as a trade secret then that would not qualify as prior art against B.

    -Gene

  18. Paul & 4Mark-

    The prior user rights in the bill is quite different from the European version of the concept and is not narrow at all, which is particularly problematic. As I understand the European view of prior user rights, the prior user is locked into the type and scope of use previously being made at the time the patent was awarded. In this sense it would be akin to the way the US treats a prior user of an unregistered trademark. If I am using MARK without a federal registration and someone else receives a federal trademark registration on MARK they cannot prevent me from using MARK in the geographical area I was located at the time of the federal registration. I also cannot otherwise expand the scope of use of MARK.

    Under the prior user rights defense in the bill there is no such limitation. If someone were using in secret prior to a patent being obtained by another they could continue their use and would not be limited to the scope and kind of use in place at the time of the patent. While that might make sense in the business method situation where business methods were not patentable prior to State Street, a blanket and unlimited prior user right defense across the board without any limitations would be quite different than elsewhere in the world.

    I think it is also important to constantly remind ourselves that we are, indeed, talking about trade secrets with prior user rights. If it were not a trade secret then the use would be prior art, or not, under 102(a) or 102(b).

    -Gene

  19. Gene, in response to your fundamendal question: “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?”

    You assume or conclude that the answer is no, but in fact there is at least one policy reason why there should be prior user rights: COMPETITION.

    The public should grant a limited monopoly, and only so much monopoly as it needs to grant, to get the disclosure and the right to use the invention at a later date. But if someone is already using the invention (and admittedly didn’t disclose it), the competition between the prior user and the disclosing inventor is beneficial to the public. And on the flip side, to remove that competitor would be harmful to the public.

    Furthermore, the prior user rights don’t significantly diminish the incentive to disclose and get the patent. The disclosing inventor doesn’t even know that there is a prior user, so he is not reasonably inhibited from filing and securing the patent. The only potential reward of not disclosing is having a period of sole use that extends beyond what would be the life of the patent; but this comes at the risk that others will arrive at the invention and competition would occur earlier. That’s the age-old tension between filing for a patent or keeping an innovation as a trade secret.

    Supposedly the Coke formulation was released awhile back. But let’s say Coca-Cola also had a proprietary process for making the stuff, and never disclosed. If someone took the now-disclosed formula and then arrived at the method, and then filed a patent on the method, should they be able to shut Coca-Cola down for the life of the patent? That would be anti-competitive and would be a bad result for the public. Rather, the person should get the patent, but Coca-Cola should be allowed to continue to practice based on prior user rights.

  20. Re your comment #18 Gene, I see in the Smith Manager’s Amendment to Section 5 the following:

    (e) Limitations and Exceptions.

    Within that I see:

    1. Personal Defence;

    1 (C) Restriction on Sites; and

    3. Not a General License and the words “only to the specific subject matter for which it has been established….”

    These provisions strike me as inspired by the European model. Would you like to comment on them?

  21. Sean-

    You say: ” prior user rights don’t significantly diminish the incentive to disclose and get the patent.”

    Please provide proof. I doubt you will be able to because the statement is erroneous, but I would still love to see what it is that you believe supports the proposition.

    Your Coke hypothetical is flawed on many levels. The primary flaw is in the erroneous believe that someone could patent the Coke formula. No such patent could be obtained because the product has been on sale for more than 1 year in the United States. According to 35 U.S.C. 102(b) that means no patent can be obtained. So it is wholly inappropriate to create a parade of horribles argument, as you are trying to do, based upon an impossibility.

  22. 4Mark-

    I do think those very recent offered amendments narrow the extraordinary and rather boundless definition of prior user rights in the original House bill. I have never been a fan of prior user rights though, and even with these changes I would never support the U.S. adopting prior user rights across the board. It seems pretty clear to me that prior user rights frustrates what we have always believed to be the focus of Article I, Section 8; namely the promotion of progress through the dissemination of information. We want to encourage people to disclose, not give them a reprieve if they choose secrecy.

    Cheers.

    -Gene

  23. Gene, with all due respect, please re-read the Coke example. I didn’t state that the later inventor got a patent on the formula, but on a method of making the product. The method would not be unpatentable due to Coca-Cola’s prior use; as you point out, the formula would be unpatentable. Without prior user rights, presumably the new patentee could stop Coca-Cola from practicing the method.

    How do I know prior user rights don’t significantly diminish the incentive to file patents? Empirically, I know that tens or hundreds of thousands of patent applications are filed each year, even where prior user rights can come into play. So there’s that.

    And as one who makes decisions about whether to file applications or not, it would seem to me that the only inventions where the effect of prior user rights would come into play are the ones that are borderline obvious (i.e., subject to independent invention by another). Otherwise I can be confident that no one else has come up with the same invention, and I can decide to file, or not, using the traditional criteria. If on the other hand the invention is borderline obvious, then maybe there are dozens of prior users out there who haven’t filed, but who could continue to practice even if I get a patent. So that’s where the value of obtaining a patent is diminished, but so too is the value of the disclosure to the public. (And in that regard, maybe prior user rights acts as a check to keep people from filing borderline inventions, so the quality of the whole system goes up.)

    The idea of prior user rights is this: there’s a benefit to the inventor in playing the patent game (i.e., disclosing and getting a patent), but if he doesn’t, there’s no penalty. Your version is: the inventor better play the patent game, or someone else will beat him to it and can shut him down. You seem to be wedded to the idea that the Constitution dictates the latter statement, where I am saying that I think the Constitution permits the former statement.

  24. Sean-

    With all due respect right back at you… you said: “If someone took the now-disclosed formula and then arrived at the method, and then filed a patent on the method, should they be able to shut Coca-Cola down for the life of the patent?”

    The fact remains that your hypothetical is an impossibility, and the formula would be unpatentable because the product was on sale in the U.S. for more than 12 months. What you need to do is READ 35 U.S.C. 102(b). You also need to familiarize yourself with what is a trade secret. Whether Coke wanted to believe the formula was a trade secret, it most certainly was not a trade secret. It could have been reverse engineered, and no doubt was reverse engineered many times.

    You also say: “How do I know prior user rights don’t significantly diminish the incentive to file patents? Empirically, I know that tens or hundreds of thousands of patent applications are filed each year, even where prior user rights can come into play. So there’s that.”

    Again you are wrong. Except for the business method scenario, there are no prior user rights in the U.S. In fact, there has never been a case on the business method prior user rights scenario. So you have absolutely no proof relative to hundreds of thousands of patent applications even where prior user rights come into play. “So there’s that,” to quote you.

    You say: “The idea of prior user rights is this: there’s a benefit to the inventor in playing the patent game (i.e., disclosing and getting a patent), but if he doesn’t, there’s no penalty. Your version is: the inventor better play the patent game, or someone else will beat him to it and can shut him down. You seem to be wedded to the idea that the Constitution dictates the latter statement, where I am saying that I think the Constitution permits the former statement.”

    You can provide absolutely no support for your position that the Constitution supports your position, while I on the other hand have demonstrated there is an abundance of support for my position. So overwhelming evidence (i.e. for my position) versus absolutely no evidence (i.e., for your position) really settles the matter.

    Finally, I will just say that my big problem with what you are writing is you are making provably false, grandiose statements without any care to provide any citation. So all you offer is your opinion. While you are entitled to have whatever opinion you prefer, I am entitled to point out that you have nothing to support your opinion. In fact, if you allowed facts to matter as you form your opinion you would conclude what I am saying is correct.

    -Gene

  25. Gene thanks for the reminder/clarification on what we are talking about (comment #18).

    I would tend to support the adoption of the European view of prior user rights, partly for reasons of international consistency but also because it would seem to keep things relatively straight-forward.

    However, I wonder if an intent of having boundless prior user rights was to put more onus on inventors to be more thorough in their prior art searches, thereby enabling the USPTO to become more passive in the examination of patent applications.

  26. Gene,
    Since the patent system only has the strength that Congress decides it will have, I don’t see a reason why allowing exceptions for prior use wouldn’t be Constitutional. Sean says that the Constitution ‘permits’ prior use, not that it ‘requires’ it. If we hold that the Constitution permits either case (which seems to be Sean’s position), then which case we ought to go with is dependent upon with what works better practically.

    One fairly important issue here is the reliability of trade secrets. Let’s say that for a certain field, a trade secret will last on average about 2 years, after which it will be known to at least a large share of those in that field. In such a case, the role of disclosure in the patent system isn’t very important, as the knowledge in question will disseminate quickly anyway. As the reliability of trade secrets increases, so does the importance of the disclosure element, and some independent research on this matter would likely be fruitful in shaping our policy, particularly regarding the extent of prior user rights, if any, that we would have.

    However, a lot of concern here seems to be businesses that don’t consider patenting a certain process worthwhile or don’t have the resources to patent fairly trivial innovations, so they would likely be among the weakest trade secrets, and on the obvious end of patents anyway (thus having the lowest social value). Furthermore, the businesses in question that aren’t patenting would likely be the small innovators that drive progress, as large companies seem intent on patenting most every little advance they make.

  27. Gene, again, re-read the hypothetical. The patent is to the METHOD of making (and the hypothetical assumes that the later inventor arrived at the same method Coca-Cola uses) which would be patentable because it was suppressed/concealed by Coca-Cola. I am well acquainted with 102 and all other relevant sections of the patent law, and with any relevant considerations in the realm of trade secrets.

    And as a matter of fact, no one is believed to have ever successfully reverse engineered the formula for Coke. Pepsi isn’t the same as Coke, and generic colas aren’t the same as Coke. Just because something is “out there” doesn’t mean that it is reverse-engineerable. A perfect example is the drug product PREMARIN, which has been on the market for decades and has never been genericized, because no one can figure out the exact method of making it. PREMARIN and Coke are examples of complex compositions that are not easy to reproduce. Sometimes it’s simpler to describe certain compositions in the way they are made, rather than what they are — which is why we have product-by-process claims.

  28. As to prior-user rights and the empirical evidence of patent applications that were filed, I was referring to OTHER jurisdictions (“In many parts of the world there are strong prior user rights…”). (If I were counting the US, it would be hundreds of thousands per year, not tens.) Counting apps that by PCT or Paris can/are filed in the jurisdictions that have “strong prior user rights,” surely there are tens of thousands filed in such jurisdictions.

  29. And finally, as to what is constitutional and what is not, see Bobby’s comment. What your quotes/citations demonstrate is not the proposition you put forth, but rather that a later inventor can get a patent even if he is not the “first” inventor. That is an entirely different matter than “prior user rights are unconstitutional.” THAT is the broad, absolute, grandiose statement that has no proof. That’s why your article is titled “argument” and not “proof.”

    You tell me I am wrong, but I assure you, it’s been a long time since I was flat-out wrong about something related to IP. What I was wrong about, however, is that I thought you were opening this up for a policy discussion on whether prior user rights are or are not relevant/appropriate/desirable/constitutional.

    At the end of the day, although you tell me on every front that I am wrong, you haven’t even attempted to address the fundamental point that I made — eliminating prior user rights is detrimental to COMPETITION. (This is irrefutable, so don’t bother telling me I’m wrong.) So as a policy matter, then it comes down to balancing between competition and innovation + disclosure, both of which are to the public benefit.

    So if you want to continue with the tunnel-vision argument about whether innovation + disclosure is incompatible with the “promote the progress” verse of the Constitution, be my guest. But it would seem to me that the logical conclusion to the argument is that we shouldn’t even respect trade secret rights, because we should force everyone to disclose their innovations; otherwise progress isn’t promoted.

    While I’m on it, there’s a false premise embedded in your argument and in some of the revered quotations you cite. Just because a secret innovation doesn’t immediately “promote the progress” doesn’t mean it’s not to the public good. See: PREMARIN. If these secrets weren’t to the public good, then the innovators wouldn’t be able to exploit the secrets to create value.

  30. Sean-

    You say: “Just because something is “out there” doesn’t mean that it is reverse-engineerable.”

    So it is your considered opinion that the Coke formula is too complicated for reverse-engineering?

    With respect to the hundreds of thousands of applications filed in jurisdictions that have prior user rights — you do realize none of those jurisdictions have the ridiculously broad prior user rights language in the bill, correct? There is no freezing in with respect to the scope and kind of prior use. So if you want to compare apples with apples then let’s do that. How many applications are filed every year in a jurisdiction with blanket, unrestricted prior user rights that can expand without check? The answer is zero.

    You also seem to want to say that I say that prior user rights are unconstitutional. It is the last refuge of someone losing the debate to lie about his opponent and his opponent’s position. If you ACTUALLY read the article rather than just the title you would see that I specifically stated I was not making the argument that prior user rights are unconstitutional. The argument I made was that they are antithetical to the purpose behind Article I, Section 8 as we have always understood it. So if you want to debate fine, but let’s actually keep the debate factual and stop using straw-man arguments to discredit me.

    Finally, as to your statement about the method in your hypothetical, perhaps you should do some more research. I am sorry to prove that you are wrong for the first time in a long time on an IP issue, but the method you mention would clearly be unpatentable under 102(b). See:

    Enzo Biochem v. Gen-Probe, Inc., 424 F.3d 1276, 1285 (CAFC 2005)(“the offer to sell the compositions invalidates [method] claims 5 and 6 based on those same probes.”)

    In re King, 801 F.2d 1324, 1326 (CAFC 1986)(“Appellant first argues that it is absurd to reject method claims on the ground that they are anticipated by a disclosed article of manufacture. However absurd it may seem to appellant, the law is, and long has been, that “if a previously patented device, in its normal and usual operation, will perform the function which an appellant claims in a subsequent application for process patent, then such application for process patent will be considered to have been anticipated by the former patented device.”)(numerous citations supporting the proposition omitted).

    You see, no matter how absurd it might seem to you, it is the law. You simply cannot sell a product for more than a year and then seek a patent on the same process for making the same product and receive a patent. Thus, I was correct to point out that your hypothetical is an impossibility.

    -Gene

  31. At issue in Enzo were composition claims, starting with the words “A composition of matter…” and are, in fact, product-by-process claims. Then there are claims 5 and 6, which are JEPSON claims to a method, specifically written to emphasize the point of novelty of using the composition of the earlier claims.

    So while it would be easy to say Enzo stands for the proposition you want it to stand for, it doesn’t. The composition claims are invalid because the composition was on sale; the Jepson claims are invalid because the point of novelty, the composition, was not in fact novel because it was on sale.

    The King case is inapposite, as (per the quotation) it was a patented machine, not a secret machine.

    More appropriate is this quote from the Fed Cir (Chief Judge Markey) : “Where a method is kept secret, and remains secret after a sale of the product of the method, that sale will not, of course, bar another inventor from the grant of a patent on that method.” D.L. AULD COMPANY v. CHROMA GRAPHICS CORP, 714 F.2d 1144. But hey, that wasn’t the main holding of the case, nor have I sheppardized it, so I won’t cite it as if it were the gospel. It is, however, illuminative.

  32. There you go Sean. That’s put you in your place hasn’t it? I wonder though, does it remind you of Alice in Wonderland and all those impossible things before breakfast? Not only can you use stuff that nobody knew about (unpublished pending apps at the USPTO) at the date of invention to prove that that invention on that date was obvious, but you can also use the fact of sales of Coke to destroy the patentable novelty of a deep deep trade secret, the method of making that product. This is the present law of patents in the USA, which the Bill leaves untouched.

    Gene, when you write “ridiculously broad” that’s not the most recent amendment, is it?

  33. Gene, I will leave all your other points alone, but here’s how this went down:

    You: Prior user rights are antithetical to the Constitution

    Me: There are other public benefits to prior user rights; namely, competition. And the Constitution would permit Congress to take a variety of approaches, including embracing prior user rights.

    You: You’re wrong!

    So that’s where the debate actually is…you haven’t addressed my point, but you keep telling me I’m wrong and you’re right and you’ve won the debate. And yet I wasn’t trying to win any debate, but merely trying to contribute to a policy discussion. I’ll take my contributions (and business) elsewhere.

  34. Sean-

    Yes, your case is illuminating, and the cases I cited are illuminating as well. The cases I cited are also of more recent vintage.

    You can try and distinguish all you want, but the language is quite clear. If you think you can patent a method that has been used to produce a product for over 100 years good luck to you.

  35. Vintage doesn’t mean anything…none of the cases you cite actually stands for the proposition you put forth. The holding from Enzo is right, it’s just not the holding that you think it is. The only clear language is the language from Markey — that is EXACTLY the hypothetical I put out there. So until there’s an on-point case that holds the exact opposite, I am confident that a patent would hold up to SUPPRESSED AND CONCEALED prior art.

    The irony of course is that the rule of law you hope to be true would be a disincentive to file patents and therefore would be…wait for it…antithetical to the very purposes of the Constitution that you are trying to protect!!

  36. Sean says: “Vintage doesn’t mean anything…”

    Do you actually follow the Federal Circuit? It is impossible to say vintage means nothing at the Federal Circuit, and you either know I am correct on that point or you should know it to be correct.

    Sean says: “none of the cases you cite actually stands for the proposition you put forth.”

    We will have to agree to disagree on that point.

    Sean says: “The only clear language is the language from Markey — that is EXACTLY the hypothetical I put out there.”

    Look, the fact that your hypothetical is an impossibility isn’t my fault. All I have done is point it out.

    Sean says: “I am confident that a patent would hold up to SUPPRESSED AND CONCEALED prior art.”

    If you think you can patent an unchanged method that has been used for 125 years to product a product then good for you. Go for it. Just be sure and disclose that fact to the USPTO. Once you do we both know what will happen, don’t we?

  37. Gene, really, you don’t understand the hypothetical? If I am filing for a patent on a method that my client invented, but incidentally someone else has suppressed & concealed the same method, how in the world can I disclose that to the patent office???? I don’t know of its existence!!

    Vintage doesn’t matter when there is no case on point. If there were a case on point, great, but remember that a more recent CAFC case has to be EN BANC to overrule an older case. So in that regard, an older case is better than a newer case, even if the newer case is seemingly on point.

  38. Sean-

    You keep pretending vintage doesn’t matter if you want. If you were knowledgeable about the CAFC you would know you are incorrect.

    As for the hypothetical, I do understand. You just happened to pick a hypothetical that is an impossibility. You continue to try and save it with assumptions that don’t fit the Coca Cola example. I will not assume the things counterfactual. So choose a better hypothetical if you want, but the counterfactual twists you require for the Coca Cola hypothetical get you no where.

  39. Gene,
    “The argument I made was that they are antithetical to the purpose behind Article I, Section 8 as we have always understood it.”
    For it to be antithetical, allowing prior use rights would have to impede promotion of progress in the state of the art. This would equate to less money spent on research or less information making it to the public. I don’t think you’ve shown that having prior use rights would be a hindrance to either.

    Your quotes do back up the idea that those that opt for trade secrets should not be eligible for patents on the subject of their trade secret. On that matter, I completely agree. However, not allowing them to get a patent and allowing a patentee to disturb them in something they’ve already been doing simply because they didn’t disclose are two very different things.

    Also, if you wish to opt away from secrecy, I would see weakening of trade secret laws as a more direct method, although it would primarily fall up the states to do so.

  40. Bobby says “For it to be antithetical, allowing prior use rights would have to impede promotion of progress in the state of the art.”

    You are right. It would have to prevent progress. Of course, it does, as the cases cited clearly explain.

  41. Gene,
    What is clearly explained is that secrets don’t result in any progress while they are secrets. Not helping progress is not the same as preventing progress. Also, the ‘while they are secrets’ part is quite important. Many trade secrets get exposed and become public knowledge, which does result in progress.

  42. Bobby,

    The introductory part of Art.1,8,8 (“To promote progress”) is merely aspirational. It is an intended purpose but not a mandatory part of the enumerated power.

    On the other hand, the part that say “by securing” and “EXCLUSIVE rights”, that is not aspirational. Either you secure exclusive rights or you don’t. It’s not a gray zone of possibilities.

  43. step back,
    “The introductory part of Art.1,8,8 (“To promote progress”) is merely aspirational. It is an intended purpose but not a mandatory part of the enumerated power.”
    It is a mandatory part, and is actually the enumerated power itself. Congress has the power TO promote the progress, and patents and copyright are the means BY which Congress can do so. It is binding language, although a certain degree of faith is put in Congress in respect to accomplishing the goal.

    “On the other hand, the part that say “by securing” and “EXCLUSIVE rights”, that is not aspirational. Either you secure exclusive rights or you don’t. It’s not a gray zone of possibilities.”
    Securing of rights need not be absolute, and if ‘gray’ bothers you too much, you can look at it as a policy in which we secure exclusive rights in some areas and don’t secure them in others. Prior user rights could fall within an area we decide we won’t secure. Copyright is secured in the same clause, but Congress has wisely chosen to have compulsory licensing in certain cases and allow many exceptions to copyright. Likewise, Congress could decide to have exceptions for patents in a similar vein.

  44. As odd as it feels to be in accord with Bobby (in even some minor way), I will continure for the nonce and play the Devil’s Advocate just a little more.

    Step,

    once again you refer to a seeming all-or-nothing stance in the constitutional mandate: “Either you secure exclusive rights or you don’t. It’s not a gray zone of possibilities.

    Please refere to my posts #4 and #7 above. It appears that Gene and Ron would agree that expediency and common patch-work laws by Congress do not have to follow the constitution (I would note that there have been laws on the books longer than ten years that were later found to be unconstitutional).

    And note that it really is the same mechanism in play (and further note that as recently as Bilski the Supreme Court refused to distinguish inventions of the “business method” type as any different than other inventions (there is no business method exception to patenting). In a seemingly odd twist for a Court that does not like brightline rules, the Court seems to be in accord with your no-gray zone – and yet, we do have a patent law in place that lies unequivically in that very same gray zone.

    As I have posted, the oops-we-didn’t-think-that-was-patentable excuse cannot overcome a constitutional barrier. This is one very white elephant in an otherwise black room.

  45. Gene, I get it…you don’t like my hypothetical. (And again, it’s not about the hypothetical.) So I invite you to write your own hypothetical where prior user rights come into play.

    But while we’re at it, let’s discuss the patentability element. You keep telling me that the later inventor can’t get a patent. So let’s change mine in terms of one fact — instead of “Coke” let’s change it to “teflon tape.”

    What? The Federal Circuit had that case? And the later inventor can get a patent?? Yes, it’s Gore v. Garlock (721 F2d 1540). Again, Chief Judge Markey: “Assuming, arguendo, that Budd sold tape produced on the Cropper machine before October 1969, and that that tape was made by a process set forth in a claim of the ‘566 patent, the issue under 102(b) is whether that sale would defeat Dr. Gore’s right to a patent on the process inventions set forth in the claims.

    “If Budd offered and sold anything, it was only tape, not whatever process was used in producing it. Neither party contends, and there was no evidence, that the public could learn the claimed process by examining the tape. If Budd and Cropper commercialized the tape, that could result in a forfeiture of a patent granted them for their process on an application filed by them more than a year later. D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, slip op. at 5-6 (Fed. Cir. 1983); See Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 68 USPQ 54 (2d Cir. 1946). There is no reason or statutory basis, however, on which Budd’s and Cropper’s secret commercialization of a process, if established, could be held a bar to the grant of a patent to Gore on that process.

    “Early public disclosure is a linchpin of the patent system. As between a prior inventor who benefits from a process by selling its product but suppresses, conceals, or otherwise keeps the process from the public, and a later inventor who promptly files a patent application from which the public will gain a disclosure of the process, the law favors the latter. See Horwath v. Lee, 564 F.2d 948, 195 USPQ 701 (CCPA 1977). The district court therefore erred as a matter of law in applying the statute and in its determination that Budd’s secret use of the Cropper machine and sale of tape rendered all process claims of the ‘566 patent invalid under 102(b).

    So you can continue to obstinately tell me how wrong I am or how impossible the hypothetical is, or you can just learn something and admit that there’s nuance here…not all problems are best addressed by a hammer. Some require finer tools.

  46. And while you say I lack knowledge of the CAFC, I find it odd that out of one side of your mouth you say Enzo resolves the matter, while out of the other side you imply the CAFC is whimsical and doesn’t stand by its precedents and newer “vintage” cases are more important than older. So I take the view that Enzo doesn’t stand for the proposition that you say it does; but even if I agreed with your reading, I could equally well take my chances with the whimsical CAFC and get them to find the opposite next time.

  47. Sean-

    You say: “I could equally well take my chances with the whimsical CAFC and get them to find the opposite next time.”

    Yes, you can take your chances with the next CAFC panel, but we both know what will happen when you let the Patent Examiner know that the unchanged method has been the source of a product on sale for more than 1 year.

    -Gene

  48. Sean-

    Yes, the extremely uncommon fact patter in Gore would allow for a patent to be obtained.

    I wonder how many cases like Gore you can point to? Wait… I know… exactly 1. Why is that? Because it is virtually unheard of to have a secret process for making a known product. Gore is the exception, not the rule. So you can pretend all you want that the secret non-conforming use is common-place, but we both know it isn’t.

    -Gene

  49. [...] position on prior user rights has been made clear here, here and here. They are a bad idea and it is only a matter of time before large tech companies [...]