The Angel is in the Big Picture: A Response to Lemley

An invention within close reach of multiple inventors differs from an invention within distant reach of a lone inventor. The differences between these two archetypes of invention - reinventables and singletons - remain unexploited under current U.S. law. Should we reform the law to exploit the differences? Mark Lemley and I agree that we should. To date, those economists who have closely examined the issue concur. What are the differences between reinventables and singletons? First, reinventables can be brought into existence with incentives of lower magnitude. This suggests that we can obtain reinventables at a lower price than we currently pay-i.e., with less monopoly loss than we incur today. Second, reinventables generate disproportionately more haste and redundancy, as the rival inventors race and duplicate each other\u27s efforts. This suggests that we already pay more, in rent dissipation and lost opportunity, for reinventables than for singletons (holding all other things equal). Third, reinventables generate disproportionately more litigation as the race winners, or the trolls to whom the winners transfer patents, eat up time and resources suing the inventors who finished a close second or third. This suggests that we already pay more in administrative costs for reinventables than for singletons. The angel is in the big picture in that there is consensus among those who have closely examined the issue that we should reform the law to exploit these differences. The devil is in the details of just how to reform it. Naturally, professional economists have elided the law-related details, focusing instead on their models-models that show an increase in social welfare if the law is reformed so that reinventables hold out the prospect of shared duopoly. Lemley and I, in contrast, take a stab at some of the details of how legal reform could take shape. My proposal is that we regard an independent inventor ( reinventor ) as exempt from the first inventor\u27s patent, provided that the reinventor completed the invention before receiving notice that the first inventor had already completed it. Lemley expresses three reservations about my proposed reinvention defense, and then offers four alternative proposals

Independent Invention as a Defense to Patent Infringement

Under current law, independent invention is no defense to patent infringement. This Article argues that independent invention should be a defense, provided the independent inventor creates the invention before receiving actual or constructive notice that someone else already created it. The defense reduces wasteful duplication of effort and enhances dissemination of inventions without lowering the incentive to invent below the necessary minimum. To be sure, the defense lowers the incentive for inventions that face significant odds of being invented by more than one inventor By enabling a second inventor to compete with a first inventor the defense essentially breaks up the first inventor\u27s patent monopoly into a duopoly. Monopoly profits exceed the collective profits of duopoly. Thus, from the perspective of inventors ex ante the defense reduces the expected profit for inventions that could be invented by more than one inventor This Article argues, however that the reduction in expected profit is moderate and that the reduced expected profit is generally sufficient. Per Bayes\u27 theorem, the fact that an invention could be invented by more than one inventor is itself evidence that a moderately reduced expected profit will still motivate at least one inventor to create the invention without inefficient delay

The Angel is in the Big Picture: A Response to Lemley

An invention within close reach of multiple inventors differs from an invention within distant reach of a lone inventor. The differences between these two archetypes of invention - reinventables and singletons - remain unexploited under current U.S. law. Should we reform the law to exploit the differences? Mark Lemley and I agree that we should. To date, those economists who have closely examined the issue concur. What are the differences between reinventables and singletons? First, reinventables can be brought into existence with incentives of lower magnitude. This suggests that we can obtain reinventables at a lower price than we currently pay-i.e., with less monopoly loss than we incur today. Second, reinventables generate disproportionately more haste and redundancy, as the rival inventors race and duplicate each other\u27s efforts. This suggests that we already pay more, in rent dissipation and lost opportunity, for reinventables than for singletons (holding all other things equal). Third, reinventables generate disproportionately more litigation as the race winners, or the trolls to whom the winners transfer patents, eat up time and resources suing the inventors who finished a close second or third. This suggests that we already pay more in administrative costs for reinventables than for singletons. The angel is in the big picture in that there is consensus among those who have closely examined the issue that we should reform the law to exploit these differences. The devil is in the details of just how to reform it. Naturally, professional economists have elided the law-related details, focusing instead on their models-models that show an increase in social welfare if the law is reformed so that reinventables hold out the prospect of shared duopoly. Lemley and I, in contrast, take a stab at some of the details of how legal reform could take shape. My proposal is that we regard an independent inventor ( reinventor ) as exempt from the first inventor\u27s patent, provided that the reinventor completed the invention before receiving notice that the first inventor had already completed it. Lemley expresses three reservations about my proposed reinvention defense, and then offers four alternative proposals

Taming the Doctrine of Equivalents in Light of Patent Failure

In their book Patent Failure , Jim Bessen and Michael Meurer show that patents outside the fields of chemistry and pharmaceuticals discourage innovation. One reason is that, outside these two fields, patents provide poor notice of what technology is owned and who owns it. Poor notice is due in part to the doctrine of equivalents (DOE). This essay argues against abolishing the DOE, and instead proposes two reforms to mitigate the DOE\u27s interference with notice. First, courts should always stay permanent injunctions against DOE infringement for a modest period of time, e.g., for one year from the date of final judgment. Second, courts should treat equivalents under 35 USC 112(6) the same as DOE equivalents. This essay also briefly reevaluates the doctrine of prosecution history estoppel in light of Patent Failure