Independent Invention as a Defense to Patent Infringement
University of Miami - School of Law; Charlotte School of Law
Michigan Law Review, Vol. 105, No. 3, pp. 475-504, December 2006
George Mason Law & Economics Research Paper No. 06-27
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's 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' 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.
Number of Pages in PDF File: 25
Keywords: patent, invention, intellectual property, prior user, innovation, rent dissipation, rent seeking, monopoly loss
JEL Classification: O31, O34, D42, L12
Date posted: May 23, 2006
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