I had lunch the other day with an attorney who said that, when he was in law school, ol’ Learned Hand was the judge whose cases you were most often likely to read. I remember only one of Hand’s cases, United States v. Carroll Towing Co., 159 F.2d 169 (2d Cir. 1947), which involved determining whether a legal duty of care (i.e., the duty not to act negligently) had been breached. By the time I went to law school (in the early 2000s), Hand was out and Judge Richard Posner (and his law and economics theories) was in. Until recently, Judge Posner sat on the Seventh Circuit Court of Appeals. (He’s now helping pro se litigants.)
With Uber going public a few weeks ago, and in my quest to reach the end of the internet, I came across a decision (available here) by Judge Posner that discussed Uber.
In the decision, Judge Posner said the following (albeit in dictum) about what rights patents give their owners:
A patent confers an exclusive right to make and sell the patented product, but no right to prevent a competitor from inventing a noninfringing substitute product that erodes the patentee’s profits.
Judge Posner is certainly right that a patent does not prevent a competitor from inventing a non-infringing substitute product. And he’s wicked smart. But he’s dead wrong on a patent giving “an exclusive right to make and sell the patented product.”
A patent provides no right to make or sell anything. Instead, a patent (nominally) provides the right to exclude others from making or selling the patented invention:
Every patent shall contain . . . a grant to the patentee, his heirs or assigns, of the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States, and, if the invention is a process, of the right to exclude others from using, offering for sale or selling throughout the United States, or importing into the United States, products made by that process, referring to the specification for the particulars thereof.
35 U.S.C.A. § 154; see also TransCore, LP v. Elec. Transaction Consultants Corp., 563 F.3d 1271, 1275 (Fed. Cir. 2009) (“the grant of a patent does not provide the patentee with an affirmative right to practice the patent but merely the right to exclude”); Leatherman Tool Group Inc. v. Cooper Indus., Inc., 131 F.3d 1011, 1015 (Fed. Cir. 1997) (“In fact, the federal patent laws do not create any affirmative right to make, use, or sell anything.”)
So I can obtain a patent for (i) a vehicle with (ii) a new and improved windshield wiper, but my patent doesn’t give me the right to make anything, and certainly not the right to make a vehicle (even one with my windshield wiper) if someone else holds a patent on the vehicle. In that case, I can exclude others from making a vehicle with my windshield wiper, but I can’t make the product myself.
Additionally, despite Section 154’s language about patents granting “the right to exclude others” from making the patented product, to actually exclude someone from making your invention, you need to obtain an injunction. Stated differently, there’s no automatic right to exclude someone from infringing your patent. Instead, federal law:
- defines (direct) infringement of a patent as “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent”, 35 U.S.C. § 271(a);
- provides that “[a] patentee shall have remedy by civil action for infringement of his patent”, 35 U.S.C. § 281;
- requires the court to award “damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer,” 35 U.S.C. § 284; and
- allows, but does not require, courts to “grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.” 35 U.S.C. § 283.
And actually obtaining an injunction in a patent case is exceedingly rare, especially after the Supreme Court’s Ebay decision.