The Economic Irrationality of the Patent Misuse Doctrine

Abstract:     
This Comment evaluates the economic effects of the patent misuse doctrine. The patent misuse doctrine is an equitable remedy analogous to the “unclean hands” doctrine in tort law. It bars infringement suits by patentees who have “misused” their patent grant, either by using the patent to violate the antitrust laws or by extending their patent monopoly in some other way. The author first describes the nature and scope of antitrust protection in the patent area, and contrasts the antitrust laws with the patent misuse doctrine. Next, the author argues that the patent misuse doctrine is irrational from an economic standpoint for three reasons: the level of sanction is unrelated to the injury caused; the sanction duplicates antitrust remedies, leading to excessive recoveries; and the sanction is awarded as a windfall to the patent infringer even if that party was not injured by the misuse. These effects combine to make the patent misuse doctrine indefensible from the standpoint either of proportionality or of deterrence. Finally, the author reviews recent legislative efforts to reform the patent misuse doctrine and argues that they are misguided because they fail to deal with the fundamental problems described herein. The author concludes that the patent misuse doctrine ought to be abolished, and that the antitrust laws can serve the same purposes that the patent misuse doctrine was designed to serve.

Number of Pages in PDF File: 34

Accepted Paper Series