Protecting the Boundaries: Unclaimed Consideration in the Patentee's Social Contract

Abstract

This article argues that the primary value society receives in the patentee’s 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. This unclaimed consideration is not necessarily a positive externality or “spillover,” because the inventor herself may well capture the value of the unclaimed consideration. And 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 modern patent theories that this unclaimed consideration is of primary value and importance to society. Indeed the majority of claimed inventions are never commercialized or licensed, and so granting the patent monopoly in most cases can only be justified by society receiving some other form of consideration. The courts should therefore guard the boundaries of patent claims to avoid the perverse result of allowing the thicket of claimed inventions to stifle the development of unclaimed consideration. The article demonstrates this point through a case study of Siemens Medical Solutions v. Saint-Gobain Ceramics & Plastics, in which the Federal Circuit decided that an accused product can equivalently infringe a patent even after it is declared by the Patent and Trademark Office to be separately patentable and non-obvious over the asserted patent. 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 which the patent laws promote progress is by incentivizing claimed inventions. The courts should instead lean on the side of protecting unclaimed consideration, which modern patent theory recognizes is the substantial return society ought to receive in return for the patent grant.

Keywords: patent law, patents, intellectual property, patent litigation, intellectual property litigation, jurisprudence