A Patent Reformist Supreme Court and Its Unearthed Precedent

How is it that the Supreme Court, a generalist court, is leading a project of innovation reform in our times while the court of appeals established to encourage innovation is having its precedent stricken down time and again? This decade the Supreme Court has issued far more patent law decisions than in any decade since the passage of the Patent Act of 1952. In doing so, the Supreme Court has overruled the Federal Circuit in roughly threequarters of the patent cases in which the Supreme Court has issued opinions. In most of these cases, the Supreme Court has established rules that favor accused infringers over patent holders, and the result has been an era of patent litigation reform far more impactful than anything Congress has achieved. Scholars have observed that the Supreme Court tends to overrule Federal Circuit decisions that (1) impose rigid legal rules as opposed to flexible standards; (2) adopt special rules for patent law cases rather than applying general principles of law and equity applicable to all federal cases; and/or (3) fail to grant sufficient discretion to the district courts. This paper examines the twenty-eight Supreme Court opinions overruling the Federal Circuit since 2000 and quantifies their rationales to discover that, while these reasons are often invoked, the Supreme Court’s most common rationale is that the Federal Circuit has disregarded or cabined its older precedent from before the 1982 creation of the Federal Circuit, from before the 1952 Patent Act, and even from before the 20th Century. The Court has relied on this rationale in twenty-one of the twenty-eight cases. The paper then seeks to probe beneath the surface level patterns to discover the deeper roots of the discord between the Supreme Court and the Federal Circuit. Constitutional law scholars have observed that the Supreme Court’s policy preferences are the primary, unstated motivation behind its decisions. The Court writes opinions that rely on the flexible tools of precedent and stare decisis in order to implement its policy choices while maintaining its institutional reputation for neutrality. The Court does this by influencing precedent vitality; the Court selects which of its precedent to rely upon and augment and which of its precedent to distinguish and narrow. This process runs in direct conflict with the Federal Circuit, a court that was originally conceived and viewed by some of its members as a court intended to bring uniformity to patent law in a way that would reinvigorate patent rights. The Federal Circuit would implement the 1952 Patent Act in a way that would draw patent law out of the nineteenth century. But for the Supreme Court, the 1952 Act was a mere codification of patent law as developed by the courts for over a hundred years. Hence, the Federal Circuit seeks to influence precedent vitality at direct cross-purposes with the Supreme Court. The result of the Supreme Court’s project has been a new era of common law patent reform in favor of accused infringers, which is gaining momentum as the Supreme Court decides far more patent cases than it has since the passage of the Patent Act of 1952

Pluralism Applied: A Concordant Approach to Selecting Contract Rules

Contract rules can be justified by utilitarian theories (such as efficiency theory), which are concerned with promoting rules that enhance societal wealth and utility. Contract rules can also be justified by rights-based theories (such as promissory and reliance theories), which are concerned with protecting the contractual freedom and interests of the individual parties to the contract. Or, contract rules can be analyzed through the lenses of a host of other theories, including critical legal theory, bargain theory, and so on. Because no single, unitary theory can ever explain the complex body of laws and societal conventions surrounding contracts, the best rule to govern any particular situation is the one that can be justified by multiple normative theories. Such an approach would stand the best chance of achieving consensus, and would acknowledge the insight of pluralism theorists—that no single unified theory can explain the civil law. This Article applies a concordant approach to selecting contract rules to address the question of whether a parent company should be held liable in tort for directing the termination of a contract entered into by its subsidiary

The Pharmaceutical Industry’s Corrupt Price Discrimination System: A Single Solution?

The patent exhaustion doctrine generally provides that when a patent holder sells or authorizes the sale of a patented product, the patent rights in that item are exhausted. The patent holder cannot chase the item down the stream of commerce to impose restrictions on its use or resale. One issue that arises is whether a domestic sale is required to trigger patent exhaustion, or if sales overseas can also trigger patent exhaustion. The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) is agnostic on this question, providing that “nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.” As a result, some countries have adopted a “national exhaustion” regime, where only a domestic sale triggers exhaustion, but other countries have adopted an “international exhaustion” regime, where sales in foreign countries trigger exhaustion. The European Union (“E.U.”) opted for a regime of “regional exhaustion,” whereby the authorized sale of a patented product in any E.U. country exhausts patent rights throughout the E.U., but patent rights in the item survive to prevent resale outside of the E.U

A Patent Reformist Supreme Court and Its Unearthed Precedent

This paper examines the twenty-eight Supreme Court opinions overruling the Federal Circuit since 2000 and quantifies their rationales to discover that, while these reasons are often invoked, the Supreme Court’s most common rationale is that the Federal Circuit has disregarded or cabined its older precedent from before the 1982 creation of the Federal Circuit, from before the 1952 Patent Act, and even from before the 20th Century. The Court has relied on this rationale in twenty-one of the twenty-eight cases. The paper then seeks to probe beneath the surface level patterns to discover the deeper roots of the discord between the Supreme Court and the Federal Circuit. Constitutional law scholars have observed that the Supreme Court’s policy preferences are the primary, unstated motivation behind its decisions. The Court writes opinions that rely on the flexible tools of precedent and stare decisis in order to implement its policy choices while maintaining its institutional reputation for neutrality. The Court does this by influencing precedent vitality; the Court selects which of its precedent to rely upon and augment and which of its precedent to distinguish and narrow. This process runs in direct conflict with the Federal Circuit, a court that was originally conceived and viewed by some of its members as a court intended to bring uniformity to patent law in a way that would reinvigorate patent rights. The Federal Circuit would implement the 1952 Patent Act in a way that would draw patent law out of the nineteenth century. But for the Supreme Court, the 1952 Act was a mere codification of patent law as developed by the courts for over a hundred years. Hence, the Federal Circuit seeks to influence precedent vitality at direct cross-purposes with the Supreme Court. The result of the Supreme Court’s project has been a new era of common law patent reform in favor of accused infringers, which is gaining momentum as the Supreme Court decides far more patent cases than it has since the passage of the Patent Act of 1952

Protecting the Boundaries: Unclaimed Consideration in the Patentee\u27s Social Contract

This Article argues that the primary value society receives in the patentee social contract is not new inventions, but unclaimed consideration. Unclaimed consideration takes many forms: additional innovations to improve on the patented invention, additional innovations created through efforts to design around the patented invention, innovations created by losers in the patent race, innovations informed by the unclaimed technical information in patents, commercialization of the patented invention or these other innovations, and the signals that patents give to investors regarding the value of a company or research lab. While there are many schools of patent scholarship engaged in spirited debate regarding how patents serve (or fail to serve) society this Article is the first to recognize and map the growing consensus among modem patent theories that unclaimed consideration is of significant value and importance to society Indeed the majority of claimed inventions are never commercialized and so granting the patent monopoly in most cases can only be justified by society receiving some other form of consideratton. Courts should therefore guard the boundaries ofpatent claims to avoid the perverse result of allowing the thicket of claimed inventions to stifle the development of unclaimed consideration. This Article demonstrates this point through a case study of Siemens Medical Solutions v Saint-Gobain Ceramics & Plastics, in which the United States Court of Appeals for the Federal Circuit decided that a product can infringe on a patent even after it is declared by the United States Patent and Trademark Office (USPTO) to be separately patentable and non-obvious over the asserted patent.I The majority of a sharply divided court thereby allowed a broad doctrine of equivalents to ensnare unclaimed consideration, relying on reasoning myopically wed to the belief that the sole way in . 2 which the patent laws promote scientific progress is by incentivizing claimed inventions. Courts instead should protect unclaimed consideration, which modem patent theory recognizes is the substantial return society ought to receive in return for the patent grant

\u3ci\u3ePluralism Applied: A Concordant Approach to Selecting Contract Rules\u3c/i\u3e

Contract rules can be justified by utilitarian theories (such as efficiency theory), which are concerned with promoting rules that enhance societal wealth and utility. Contract rules can also be justified by rights-based theories (such as promissory and reliance theories), which are concerned with protecting the contractual freedom and interests ofthe individual parties to the contract. Or, contract rules can be analyzed through the lenses of a host of other theories, including critical legal theory, bargain theory, and so on. Because no single, unitary theory can ever explain the complex body of laws and societal conventions surrounding contracts, the best rule to govern any particular situation is the one that can be justified by multiple normative theories. Such an approach would stand the best chance of achieving consensus, and would acknowledge the insight of pluralism theorists—that no single unified theory can explain the civil law. This Article applies a concordant approach to selecting contract rules to address the question of whether a parent company should be held liable in tort for directing the termination of a contract entered into by its subsidiary. Under ordinary circumstances, a simple breach of contract does not give rise to tort liability and punitive damages; one cannot tortiously interfere with one’s own contract. But the courts around the country are deeply divided on the question of whether parent companies are immune from tort liability for inducing a subsidiary to breach a contract. Some courts hold that because the parent and subsidiary share common interests, the parent is completely immune from tort liability, just as though it were a party to the contract (Category 1). Some courts take the similarly formalistic approach that because the parent and subsidiary are technically separate entities, the parent enjoys no immunity from tort liability (Category 2). Some courts impose tort liability only if the parent acted against the business interests of the parent and subsidiary or committed an independent tort (Category 3). Some courts impose tort liability even if the breach of contract was in the business interest of the parent and subsidiary if the parent company’s actions were “wrongful,” which can be something less than tortious behavior (Category 4). This Article presents an exhaustive survey and categorization of these conflicting rules and then applies normative contract theory to determine which is the best approach. In particular, the two most dominant contract law theories of our time are applied to the issue: efficiency theory and rights-based theory. Applying efficiency theory to the problem at hand, this Article begins with the proposition that, in order to facilitate efficient breaches of contract, no tort liability should be imposed. However, once one takes into account the underlying false assumption of efficiency theory that commercial actors always act rationally, allowing for tort liability to be imposed in those situations where the parent does not act out of business judgment makes sense. When rights-based theory is applied to this issue, it raises questions as to whether breach should be penalized to honor the promise made to the nonbreaching party and to protect the non-breaching party’s reliance on that promise. However, rights-based theory would also argue for protecting the parent company’s autonomy by allowing it to reject a promise it never accepted and to decline to honor reliance it never induced—but only if the parent is acting out of rational business interest. Accordingly, the parent company should be afforded autonomy in choosing to terminate a contract it did not bargain for (so long as it pays compensatory damages). If the parent company’s actions are not taken for rational business reasons, but rather for reasons of spite, malice, or oppression, then the law should punish and deter such behavior

Trolls or Toll-Takers: Do Intellectual Property Non-practicing Entities Add Value to Society?

The 2015 Chapman Law Review Symposium will seek to advance the discussion of non-practicing entities in three ways: (1) by expanding on the scholarly debate surrounding patent trolls summarized above; (2) by expanding on the perspectives informing this debate beyond academia by inviting the views of practitioners from both sides of the patent troll divide; and (3) by expanding on the scope of this topic by considering the nature and possibility of copyright and trademark trolls

Total Patent Exhaustion!

The exhaustion doctrine generally provides that when a patent holder sells or authorizes another party to sell a patented item, the patent rights in that item are exhausted, and the patent holder cannot pursue that product down the stream of commerce to demand royalties from each party that subsequently acquires the item. Patent holders have often sought to evade patent exhaustion by drafting licensing agreements attending or authorizing the sale of their patented products that place restrictions on the use of the patented item or otherwise provide that no patent exhaustion has occurred. In Impression Products v. Lexmark, the Supreme Court held that such post-sale restrictions are ineffective to prevent patent exhaustion. This overruled Federal Circuit precedent holding that contractual restrictions to evade exhaustion were effective so long as they did not run afoul of antitrust laws or constitute patent misuse. This author has long argued that the Federal Circuit\u27s interpretation of Supreme Court precedent was incorrect-that post-sale restrictions could not prevent patent exhaustion, as set forth in cases dating from the 1917 case Motion Picture Patents v. Universal Film to the 2008 case Quanta Computer v. LG Electronics. A per se prohibition on contracting around exhaustion is justified by multiple policy principles, including (1) the policy against restraints on alienation of personal property; (2) the policy against compensation for patent holders above what is necessary to promote invention (commonly known as double-recovery ); (3) the need to protect the boundary between federal patent law and the common law of contracts and property; and (4) all of these policies in addition to judicial efficiency when parties attempt to evade exhaustion in drafting a patent license agreement to settle litigation. Some scholars argue that contracting around exhaustion allows for welfare gains such as increased output and vertical price discrimination. These scholars contend that the policy against restraints on alienation is a misunderstood and outdated relic of the common law; and that the policy against double-recovery has no empirical justification. To the contrary, total exhaustion protects modern consumers by preserving the used resale market, reducing the cost of goods, and protecting consumers from being locked into particular brands and secondary products. Arguments against total exhaustion for consumer goods fail to account for the inefficiencies of personal property servitudes, such as the uncertainty and research costs resulting from post-sale restrictions, hidden costs of products through tied secondary products, notice costs for licensed manufacturers, and the need for costly litigation to test the validity of contractual restrictions under rule of reason economic analysis-litigation that will rarely occur because it is beyond the reach of the great majority of consumers. In short, the Supreme Court was correct as a matter of its own precedent and of sound policy that contractual post-sale restrictions are wholly ineffective to prevent exhaustion, regardless of whether they run afoul of antitrust law or constitute patent misuse. Patent law is not the poor stepchild of antitrust law. It pursues separate policies. Moreover, to the extent contracting around exhaustion is economically desirable for high-end, non-consumer goods, the Court\u27s opinion does not result in absolute exhaustion in all circumstances. Pre-sale restrictions and leases may remain viable options for patent holders to evade exhaustion. For high-end, non-consumer products where there are lower transaction and notice costs relative to the price of the product, these avenues are practicable, and the concerns with servitudes and double recovery adhering in the consumer goods context are ameliorated

Indie hype cycle built for two, An: a case study of the Pitchfork album reviews of Arcade Fire and Clap Your Hands Say Yeah

2012 Spring.Includes bibliographical references.This thesis investigates the whims of critical reception in the indie rock world and its effects upon the hype cycle. I define the indie hype cycle as a naturalized communicative process governing the flow of critical favor within the indie music community and identify its four primary phases as entrance on to the scene, hype generation, backlash, and obscurity/visibility. To understand the interaction between the hype cycle and critical reception, the project focuses on Arcade Fire and Clap Your Hands Say Yeah (CYHSY) as two bands emblematic of the critical divergence possible after initial success. It compares the reviews of the bands' debut and sophomore albums by Pitchfork, a prominent indie music website, and identifies genre, elitism, and authenticity as key constructs in the way the site frames the bands as indie, and thus, worthy of praise. I argue that an economy of authenticity--featuring emotional, economic, and talent-based forms--affects the indie hype cycle in a variety of ways. The thesis concludes that the mechanics of indie music criticism have extensive influence upon the indie hype cycle. The initial framing of band authenticity that accompanies debut releases can have years-long ramifications on the way that band is received and covered in the indie press. To inform its analysis, the thesis draws upon a wide variety of scholars including Ryan Hibbet, Michael Albrecht, and Devon Powers, along with commentators from the popular music press including Carl Wilson and Nitsuh Abebe