[Adam Mossoff, guest-blogging, May 6, 2009 at 11:56pm] Trackbacks
Patent Thickets, Bad Patents, and Costly Patent Litigation:

Some might conclude that "patent trolls" are a more serious problem today because of larger problems in patent litigation generally. We often hear reports of an explosion in patent litigation, problems with determining whether patents are valid, problems with determinig patent boundaries, and commercial products being held hostage to the threat of infringement litigation. Such complaints are particularly loud in the computer industry, as supported by academic commentators.

Here, we must be especially cautious in assuming that modern problems are necessarily different from those experienced in yesteryear. Of course, it goes without saying that there are differences between the 1850s and today; in fact, there are differences between 1995 and today. There are always differences between two distinct points in time. So it's important to always figure out if these are differences without a distinction, and, even more important, if there are any similarities.

In this respect, recall that many facets of the Sewing Machine War reflected many of the purportedly new problems with patent litigation today, such as massive and costly litigation and the threat of injunctions. And it's not just cases from the Sewing Machine War that reflected these and other so-called modern concerns. As someone who has been immersed in historical patent jurisprudence for much of his academic career, including having read, among other things, all patent decisions in the Federal Cases reporter (approximately 1,460), I often hear today the echoes of long-forgotten patent disputes.

In 1862, for instance, a judge expressed his frustration at inventors being "frightened off the course by threats of ruinous litigation," and that in the particular case before him, the "astute counsel and experts have been employed to surround this machine or invention ... with a fog of nebulous rhetoric, and to make this concrete machine appear a transcendental abstraction ...."

In 1855, in the midst of the Sewing Machine War, a judge instructed a jury in a patent trial unrelated to the swirling disputes over the sewing machine:

For the maintenance of his right [an inventor] is subjected to legal controversies, which, not infrequently involve him in an expenditure beyond the amount of his profits. Inventors and discoverers are proverbially poor. It is said that the man, by the operations of whose genius the streets of the city of London were first lighted, was a wanderer and a beggar in the streets.

In 1877, another judge complained in a patent decision that "litigation in regard to patents has been found so expensive and so wearisome to the courts." Such problems arose from how each "contest involves an immense sum in value, and where the question turns mainly upon opinions of experts, there is no difficulty in introducing any amount of them on either side and yet this class of cases is one in which there is value to be attached to experts." He further noted that it "is a sad thing to say that perhaps no class of cases coming before the courts have as much fraud, perjury, and wicked conduct, as patent cases. ... there is a large amount of false swearing and corruption in them."

If anyone has a tendency to commit the anachronism of thinking that the inventions of yesteryear were simple compared to today, they need look no further than an 1855 decision from Justice Grier, riding circuit, in which he observed:

It is no reflection on juries or trial by jury to say that many disputes about the originality and infringement of patents depending upon complex mathematical calculations, upon a knowledge of the principles of chemical science, and of mechanical philosophy, cannot be satisfactorily decided by the verdict of twelve men, a majority, if not all of whom, have no knowledge or experience on the subjects they are called to decide on.

And, in 1841, Justice Story, one of the principal architects of American patent law, observed how "Patents and copyrights approach nearer than any other class of cases ... to what may be called the metaphysics of law, where the distinctions are, or at least may be very subtle and refined, and sometimes, almost evanescent."

These are just a few of the many long-forgotten patent cases I have uncovered in my research (some of which I discuss in a previously published article) and which warn against several anachronisms in patent law today. These nineteenth-century complaints remind us that the inherent technical and legal problems in assessing complex innovation — such as distinguishing between different complementary contributions to a commercial product, determining imprecise contours of a patented invention, and litigating a case in a court system that moves at a plodding pace — are long-standing features of the American patent system.

The American patent system, as economist B. Zorina Khan has explained, was tremendously successful in the nineteenth century — as compared to older and more established patent systems in England, Germany, and France. As Professor Khan has shown, the American patent system excelled precisely because it did what none of these other patent systems would do: It secured inventions as property rights within an institutional framework governed by the rule of law.

It was within this framework that the first American patent thicket arose from the incremental invention of the sewing machine. It was this framework that also provided for the resolution of this patent thicket by the sewing machine patentees — exercising their rights of use and disposition in their property by contracting to their mutual benefit.

In my next (and final) post on the sewing machine patent thicket, I will raise an issue that is not yet discussed in my paper — antitrust. The impact of antitrust doctrine on how patent-owners contract with other patent-owners may create significant variances between the nineteenth century and today on how patent-owners may resolve patent thickets. I am still researching the relationship between patent pools and antitrust, and so I am especially keen on receiving feedback from the readers of this series.