The most tweeted segment of the Republican debate in New Hampshire Saturday evening was the tête-à-tête between Jeb Bush and Donald Trump on the topic of eminent domain. Twitter’s head of politics commented to ABC Digital 538 (that’s Nate Silver’s convergence of big data, broadcast politics and sports) that the eminent domain fracas enjoyed the most traffic especially with regard to the boos Trump received from the audience.
Trump argued at the New Hampshire debate that our nation’s infrastructure would not happen without eminent domain. That’s legal talk for the government stepping in and taking someone’s private property and paying compensation. A forced sale that usurps property rights. The intellectual property analog may be a compulsory license.
Trump bragged that if one is smart they could do very well by eminent domain, making 3 to 4 times fair market value. It is unclear whether patent owners see the world through the same rose-colored glasses when it comes to the usurpation of exclusive rights. Infringers take patent property and use the courts and the United States Patent and Trademark Office (USPTO) to delay payment, attack the patent’s validity and or diminish the value of the patent and reputation of the owner and or sector of technology. The usurpation of property rights has not lead to a three-fold increase in fair market value for patent owners. Quite the opposite has happened in fact.
Bush attacked Trump for taking the property of a grandmother in Atlantic City to build a parking lot for limos. Surprisingly Trump did not counter that Bush’s brother, President George W. Bush, used eminent domain to build a new baseball park for the Texas Rangers years before he entered into politics. Perhaps Trump was not ready with opposition research during the debate. The day after the debate while appearing on ABC’s This Week, Trump did point out that George W. Bush had used eminent domain for the Texas Rangers stadium project.
Eminent domain is something that Congress violently booed and in a virulently bi-partisan manner. You don’t see Congress this energized unless the country to going to war, yet Congress directed their anger at the US Supreme Court after their 5-4 City of New London v. Kelo decision in 2005 where the Court sided with the City of New London, Connecticut and their economic development plan that complied with the guidelines set out by the State of Connecticut against Ms. Susette Kelo, a single woman that had restored a dilapidated home, painted it pink, and supported herself as a first responder (EMT turned nurse).
Kelo’s lawyers at the non-profit Institute for Justice and their amicus supporters pointed out that the City of New London wanted to redevelop an area gone long in the tooth due to a closed US Navy base and replace Ms. Kelo’s home with a corporate office park for Pfizer and a Ritz-Carlton hotel. Imagine if this happened today.
It might not be able to happen with respect to real property today, because after all the Supreme Court does keep a closer eye on shifting public sentiment than they would likely admit, but this type of taking of property rights for the benefit of one private entity over another is certainly happening in the patent world. This may well be why proponents of a weaker patent system and eroding patent rights openly question whether patents are really property rights. Never mind the long line of Supreme Court cases that equates patents to real property and that statue that says patents are property.
“Economic development” as a reason for eminent domain has been one of the weaker reasons for government taking of private property because it can be exploited for racial, class or crony purposes. Justice Sandra Day O’Connor wrote the split decision with some regret finding that the state’s rights sense of justice should prevail. That is if the State of Connecticut wanted to run the property rights a certain way and the City of New London followed that state plan then an individual could see their private property transferred to another private interest. Bear in mind that this new private interest could improve the look and feel of a dilapidated place, perhaps also increase tax revenue, and or provide some other activities to benefit the public (e.g. a park, paving roads, installing sewers, lighting etc.). Such eminent domain has been criticized for using the excuse of “blight” to move one kind of people out of an area to let another kind in and on the cheap.
While economic development as a justification for eminent domain has been severely criticized, there does not seem to be a similar criticism associated with stripping property rights from patent owners in order to allow technology adopting infringers to distribute what they did not themselves innovate without paying the property owner for the privilege. Senator Ted Cruz (R-TX) promised in an earlier Republican debate to defend constitutional principles wherever they were under assault, but as yet he has been relatively noncommittal on patent matters despite patents being specifically authorized within the Constitution itself. Cruz, a member of the Senate Judiciary Committee, in 2015 did vote against S.1137, The PATENT Act, in Committee. Cruz voted against this patent reform bill but with the caveat that he may later support it if certain changes were made.
When the Supreme Court decided City of New London v. Kelo, African-American Democrats from urban areas locked arms on the steps of the US Capitol with white Republicans from rural communities in strenuous protest against this Court decision. Congress tried to reduce the impact of this Court decision by floating legislation restricting how the federal government could use eminent domain and how states could use federal funds for same. President George W. Bush in 2006 issued an executive order along the same lines – restricting the use of eminent domain for real public benefit and not private gain.
So far little serious effort has been made in Congress to turn the tide, which has overwhelming been against patent owners over the last decade. Senator Chris Coons (D-DE) and Senator Dick Durbin (D-IL) have submitted alternative, bi-partisan legislation (supported by Republican Senators Vitter and Cotton) that charts a very different course, but the power base on both sides of the aisle are lined up behind further reforms that would continue to weaken patent rights and the patent system.
Trump’s uncle, John G. Trump, was an inventor and patent owner recognized by President Truman for his creative work on radar and later regarded for his work while at MIT on cancer lasers. Trump has made much money from his own self-made brand (think Kardashian) as well as enforcing trademarks on aromatic products bearing names like Park Avenue. This may lead the intellectual property community to believe that a President Trump would be good for rights owners. But Trump’s view of the use of eminent domain to strip real property rights from property owners should be a red flag for intellectual property owners, particularly patent owners. If he holds this view relative to real property what will his views be with respect to patents? Can the U.S. patent system withstand a President that views it as desirable to take property rights away in the name of private sector commercial gain?