40 Pages Posted: 18 Oct 2012 Last revised: 27 Nov 2012
Date Written: October 16, 2012
In Continental Paper Bag Co. v. Eastern Paper Bag Co., the Supreme Court, held (among other things) (1) that patent owners have an absolute right not to practice their patent and (2) that even these non practicing patent owners are entitled to the liberal use of injunctive relief against infringers. Both of these holdings have been very important to the viability of patent assertion entities, or so-called "patent trolls." In eBay Inc. v. MercExchange, LLC, the Supreme Court softened the injunction rule. In this essay, we argue that Congress or the Court should also reconsider Continental Paper Bag’s endorsement of a robust right not to use, not because patents are not property but because the considerations at work within both property and patent law do not support recognizing such an absolute right not to use patents. The Court's endorsement in Continental Paper Bag of a robust right not to use patents was based on an overly simplistic analogy to tangible property, which the Court characterized as recognizing "the privilege of any owner of property to use or not use it, without question of motive." The Court's reasoning was flawed in two respects. First, the law of tangible property distinguishes among nonusers, penalizing owners whose derelict nonuse interferes with other owners’ use of their own property or induces others to waste time or effort appropriating the unused property. With respect to these derelict nonusers, the law employs numerous doctrines, such as nuisance, abandonment, adverse possession, and permissive waste, to ensure that owners' decision not to use their property does not inflict harm on others. Second, beyond its poor understanding of the law of nonuse as it relates to tangible property, the Court in Continental Paper Bag failed to consider the ways in which the reasons for recognizing a right not to use might differ in the contexts of patent and tangible property. Although the same basic considerations are at play in both contexts -- efficiency, autonomy, and personhood -- the implications of nonuse differ in the patent context because of information's nonrivalrous nature and because of the particularly powerful way that patent law constrains the freedom of nonowners. Taking these factors into account suggests that the normative case for recognizing a robust right not to use a patent is weaker than in the domain of tangible property. This is especially true when nonusing owners attempt to enforce their patents against independent inventors. As a consequence, in cases brought against independent inventors, we suggest making patent remedies contingent on a patent owner’s efforts to disseminate their inventions. Recognition of such an obligation to use in patents would significantly reduce the threats posed by so-called patent trolls and the high tech patent wars.
Keywords: Property, patent, intellectual property, nonuse, patent trolls, remedies
Suggested Citation: Suggested Citation
Liivak, Oskar and Penalver, Eduardo M., The Right Not to Use in Property and Patent Law (October 16, 2012). Cornell Legal Studies Research Paper No. 12-62. Available at SSRN: https://ssrn.com/abstract=2162667 or http://dx.doi.org/10.2139/ssrn.2162667