Rethinking the Concept of Exclusion in Patent Law

Patent law's broad exclusionary rule is one of its defining features. It is unique within intellectual property because it prohibits acts of independent creation. Even if a second inventor had no connection or aid from an initial inventor, patent law allows the first inventor to stop the second. Though a number of pressing problems can be traced to this rule, it remains untouchable; it is thought to be essential for incentivizing invention. But is it really our only choice? And why is it so different from our otherwise widespread reliance on free entry and competition in markets? The current rule and its anti-competitive stance are defended as being economically necessary as well as being administratively manageable. This Article questions both of these justifications. As an alternative, the Article explores a narrower type of exclusion suggested by Learned Hand some fifty years ago. The Article finds that his reform ideally could provide for the same set of inventive projects (if not more) as the current rule does but could avoid many of the pitfalls bedeviling the current system. Learned Hand's suggested rule models itself on copyright where infringement extends only to copyists and thus allows generally free entry and competition by independent inventors. Interestingly, despite the competitive pressures and their reduction in the magnitude of the reward to the initial inventor, this "free entry system" can provide for the same set of inventive projects as the current rule, and because of the competitive pressures, it can do so with improved social welfare. Furthermore, as to administration, though there are surely difficulties in both monitoring and adjudicating such a copying-based patent rule, there are important unappreciated self-enforcement benefits. Though far from supporting an immediate doctrinal change, these results suggest at least a conceptual reorientation wherein prevention of copying and its resulting economic undercutting and not the per se prevention of competition become the goals of the patent system. Rather than being a necessary economic feature, patent law's broad conceptualization of exclusion may be an administrative artifact that we would jettison if only we could.