Patent Alienability and Its Discontents
54 Pages Posted: 15 Sep 2014 Last revised: 27 Mar 2015
Date Written: September 10, 2014
This article analyzes the Innovation Act, which passed the U.S. House of Representatives on a promise to deal with the problem of "patent trolls" or non-practicing entities (NPEs). The article surveys the NPE controversy from a variety of perspectives, including the history and theory of transactions in real property. Part II raises several economic issues relevant to the proposed NPE legislation, including the need for owners to alienate the legally-enforceable rights they acquire, and the dynamic benefits of property alienability notwithstanding short-term administrative costs. Part III describes a decade of reforms that led up to the Innovation Act, with a particular focus on critiques of patent enforcement in general and NPEs in particular. Part IV responds to these concerns by surveying legal doctrines that may blunt the allegedly adverse effects of patent litigation. The article concludes that current efforts may not be as beneficial to innovation as has been advertised. Recent interpretations of the Patent Act of 1952, including CLS Bank and KSR in particular, provide adequate tools with which the courts may address the alleged abuses by NPEs.
Keywords: patents, patent reform, Innovation Act, NPEs, non-practicing entities, PTO, America Invents Act, AIA, economics of property rights, economics of licensing, economics of R&D, research and development
JEL Classification: O34, K11, K14
Suggested Citation: Suggested Citation