Federalism, First Amendment & Patents: The Fraud Fallacy
60 Pages Posted: 11 Jun 2015 Last revised: 18 Feb 2016
Date Written: 2015
Few arguments echo as strongly throughout United States constitutional history as those related to the role of the states in the federal union. Shifting across time, the role of the states in general has moved from a model of dualism — characterized by a strict separation of federal and state dominion — to a model of overlapping and concurrent powers. In the modern context of overlapping powers, the preemption doctrine manages the intricate areas of overlap, with topics ranging from antitrust to immigration.
Yet the concept of federalism, as applied by the circuit courts in relation to patents, has traveled far from its roots. Using weak foundational logic, the courts have taken concepts intended to protect citizens from the chilling effects of antitrust law and stretched them to conclude that states may not pass laws related to behavior with patents, unless that behavior relates to remediation of fraud. If allowed to flourish, this fraud fallacy would prevent state laws from affecting a wide range of behavior, from transparency, to disclosure, to protection against pressure sales.
Most important, the theory applied to patent preemption questions threatens to bleed into a wide range of preemption issues, as well as to issues related to corporate speech. From this perspective, the fraud fallacy, and its wide-ranging language, threaten to have a lasting effect on the ability of state law to reflect and respond to local democratic demands, as well as even the federal government ability to legislate effectively.
Keywords: preemption, patent assertion, federalism, antitrust, First Amendment, fraud
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