Four Questionable Rationales for the Patent Misuse Doctrine

Abstract

When a patent infringement defendant succeeds in proving that the patent owner has misused its patent, the patent is rendered unenforceable unless and until the misuse is purged. Case law has never clearly articulated precise criteria for determining the boundaries of the misuse doctrine, however. Although the misuse doctrine overlaps to some extent with substantive antitrust law, for example, under current law not every instance of misuse is necessarily an antitrust violation, and not every patent-related antitrust violation necessarily constitutes misuse. In this paper, I identify four possible justifications for the patent misuse doctrine that, in theory, could provide guidance in identifying conduct that constitutes patent misuse. These four rationales include: (1) the optimal deterrence of substantive antitrust violations (the “optimal antitrust deterrence” rationale); (2) a broader social welfare maximization rationale (the “social welfare” rationale); (3) a narrower rationale that focuses principally on the optimal deterrence of anticompetitive conduct that lies beyond the reach of antitrust (the “beyond antitrust” rationale); and (4) a rationale that targets spurious assertions of patent rights that may not otherwise violate antitrust or unfair competition law (the “public domain” rationale). I argue that the optimal antitrust deterrence and public domain rationales provide at best only weak support for a patent misuse doctrine due to corresponding overdeterrence risks. The social welfare and beyond antitrust rationales may support a patent misuse doctrine in some discrete instances where “false negatives” risk undermining future innovation or other goals of the patent system, and the cost of “false negatives” is likely to be small; overall, however, I argue that courts should exercise caution in applying either rationale to patentee conduct that is otherwise lawful. At the end of the day, an antitrust policy that is appropriately sensitive to innovation harms, along with a more vigorous experimental use defense to infringement claims, likely would be preferable to a reinvigorated patent misuse doctrine.

Keywords: patents, misuse, antitrust, innovation