Not All Property is Created Equal: Why Modern Courts Resist Applying the Takings Clause to Patents, and Why They are Right to Do So
32 Pages Posted: 9 Mar 2007 Last revised: 24 Nov 2009
Date Written: 2007
After a century of disregard, the question of whether patents are entitled to protection under the Fifth Amendment's Takings Clause has recently become a topic of scholarly and judicial debate. While one might have expected this issue to have been settled long before, it is only the recent burgeoning of patentholders' regulatory takings claims that has made this question one of pressing interest. Thus far scholarship on the issue has focused on whether or not patents have historically been characterized as property. Meanwhile, last year's rejection by the Federal Circuit of a patentholder's right to assert a Takings Clause claim led to both external criticism as well as a vocal dissent by an esteemed member of that court.
Considering the issue from a new angle, this article demonstrates that determination of patents' status as property is a relevant but incomplete analysis of the constitutional question. That is because the Supreme Court has already concluded that some property interests, particularly federal benefits, are entitled to Due Process Clause protection but are not entitled to Takings Clause protection. Patents are similar federal entitlements, offered only because they serve society, and thus they are not entitled to the full panoply of constitutional protections. Moreover, if patentholders could assert regulatory takings claims, the fear of costly claims could very well deter the government from making worthwhile policy changes. For instance, there is currently significant public concern about the high prices of pharmaceuticals resulting from drug companies' patent privileges. Refusing to grant patentholders the right to a Takings Clause remedy will prevent society from being stuck with earlier suboptimal patent policies. In sum, permitting patents to trigger takings claims is neither compelled by modern Supreme Court precedent nor wise as a policy matter.
Keywords: Takings clause, patents, Fifth Amendment, property, Zoltek
JEL Classification: K11, K20
Suggested Citation: Suggested Citation