PATENTS AND U.S. PATENT OFFICE

PATENTS AND U.S. PATENT OFFICE. Some system for encouraging invention and industrial growth by granting monopolies has existed since the colonial period; the early system ultimately evolved into the twentieth century's patent system. The valuable patent monopoly has always been subject to detailed requirements to ensure that the privilege was granted only in appropriate instances and endured only for a limited time. The rare colonial approval of monopolies for the purchase, production, and sale of commodities derived from the British Crown's authority to grant such monopolies in the national interest. The Crown's authority was restricted in scope by Darcy v. Allin (1602), which invalidated the patent of Queen Elizabeth I for the manufacture of playing cards because she had failed to show that the process was an invention; the monopoly was therefore not considered to be in the national interest. Common law rules prohibiting such anticompetitive practices as engrossing, regrating, and forestalling served as the backdrop for the 1624 Statute of Monopolies, which authorized monopolies only to "the true and first inventor" of a new manufacturing process. The monopolies were limited to fourteen years, presumably an adequate period to train apprentices in the new technology and receive the deserved monetary benefits.

Early America

Against this background, the General Court of Massachusetts Bay Colony granted monopolies for stated periods, with the objective of encouraging domestic industry. Benefits to inventors or innovators took the form of monopolies or monetary grants for each sale of the patented item. Since the Articles of Confederation made no mention of patents, individual states continued the precedent established in colonial Massachusetts. Maryland, for example, granted patents to James Rumsey for his steamboat and to Oliver Evans for his milling machinery.

In 1790, Congress passed the first patent law under the power provided in Article I, section 8 of the newly ratified Constitution. Congress was empowered "to promote the Progress of Science and useful Arts, by securing for limited Times to… Inventors the exclusive Rights to their … Discoveries." This act federalized the patent power, so that states no longer granted patents. The act provided that petitions for patents would be forwarded to the secretaries of state and war and to the attorney general, and that any two members of this patent board could approve a fourteen-year patent. The attorney general was then to submit the approved patent for the president's signature. Thomas Jefferson, the secretary of state and a notable inventor himself, played the leading role in this procedure. Because of his abhorrence of monopoly, he strictly applied the rule of novelty and usefulness to each application. Only three patents were approved in 1790.

Objections to delays in processing petitions and the narrow interpretation of the 1790 act led to passage in 1793 of a new law that eliminated the board and created an administrative structure for examining the merits of petitions. The secretary of state was to register the patents and appoint a board of arbiters when two or more petitioners claimed the same invention. The courts would handle disputes about the validity of the petitioners' claims. There was concern that the courts were excessively occupied with patent litigation and not well qualified to adjudicate disputes about claims of priority and technical questions. This caused Secretary of State James Madison to establish the Patent Office in 1802. It was administered by William Thornton, who in September 1814 saved the patent files from destruction by British troops.

The Nineteenth Century

Senator John Ruggles of Maine, a persistent critic of the 1793 legislation, led a successful effort to adopt a completely revised patent law; the new legislation was signed on 4 July 1836. The law created the Office of Commissioner of Patents within the Department of State. This legislation, which is the foundation of the modern patent system, gave the Patent Office responsibility for examining petitions and ruling on the validity of the claims for an invention, its usefulness, and its workability. The fourteen-year monopoly could be extended for an additional seven years if a special board (later, the commissioner of patents) found that the patentee had encountered unusual problems in producing and marketing the device. In 1861, Congress reserved such grants to itself. To give the patentee additional time for producing and marketing new products, Congress increased the monopoly period to seventeen years.

Congress codified and modified the various patent laws again in 1870 and gave the Patent Office the power to register trademarks. This trademark registration statute was held unconstitutional in 1879, on the ground that trademarks were neither copyrightable writings nor patentable discoveries, and so were outside the scope of Article I, section 8 of the Constitution. Trademark laws were subsequently passed under the authority of the commerce clause, and the Patent Office continued to administer the trademark registration process. The 1870 act moved responsibility for administering the copyright laws, some of which had been in the Patent Office, to the Library of Congress. It also sanctioned the procedures for adjudicating interferences (contests by patent claimants as to coverage or priority) by establishing the Office of the Examiner of Interferences.

Reforming the Patent System

In the ensuing decades, the Patent Office—which had been transferred to the Department of the Interior when the latter was created in 1849 and was later moved to the Department of Commerce in 1925—developed its present basic organization and essential procedures. Executive and managerial authority were vested in the commissioner of patents, one or more assistant commissioners, and an office of administration. A registry office registered patent applications and assignments of approved patents, published and distributed patent specifications, and organized a scientific and technical library. The chief operating function of examining the claims was delegated to several patent examining divisions. Separate units processed trademark applications. Boards with important staff functions, such as the Trademark Trial and Appeal Board, the Board of Patent Interferences, and the Board of Appeals, began adjudicating appeals to review examiners' findings with regard to utility and design patents, along with trademark disputes. In the Plant Patent Act of 1930, Congress extended patent protection to asexually reproduced plants, renewing an interest in promoting agriculture that went back to an 1839 program, administered by the Patent Office, of collecting and distributing seeds and information of interest to farmers.

The statute governing patents was substantially revised again in 1952. The new act codified rules that had previously been established by court decisions. Significantly, the requirement that inventive developments be "nonobvious" was codified for the first time in the 1952 revision. The nonobviousness requirement represents the important substantive difference between a new development and a new development that qualifies as an invention. In 1970, patent protection for plants grown from seeds was embodied in the Plant Variety Protection Act, and in the 1980 case of Diamond v. Chakrabarty (447 U.S. 303), the U.S. Supreme Court held that ordinary utility patents could be sought for genetically altered micro-organisms. This decision laid the groundwork for the important role that patent law plays in the biotechnology industry. The decision was controversial at the time, and remained so at the turn of the twenty-first century.

Legislative modifications continued throughout the rest of the twentieth century. Perhaps the most important was legislation in 1982 to create the U.S. Court of Appeals for the Federal Circuit. This circuit court has exclusive appellate jurisdiction over patent disputes, and its decisions have been important in unifying patent law doctrine. Another particularly important change, effective in 1995 as a result of the adoption of the Uruguay Round Agreement of the General Agreement on Tariffs and Trade, altered the term of patents from seventeen years from issuance to twenty years from filing.

Patents and New Technology

The late twentieth century saw the patent law system struggle with the question of how to accommodate computer software. After some early indications that the Patent Office regarded software as unpatentable, the system ultimately accepted the idea of software patents. This decision was controversial as a matter of policy, with many arguing that patent law protection was both unnecessary and unsuitable. Critics also questioned the capacity of the Patent Office to engage in meaningful evaluation of applications in the field of software technology.

Although the patent system has long played a significant role in the history of American science and technology, it has been the subject of considerable adverse criticism. Critics, as in the 1938 hearings of the Temporary National Economic Committee, claimed that the patent system fostered undesirable monopolies by creating producers who, by superior technology protected by patents, could corner large parts of the market. Later, after the Chakrabarty decision ruled that a genetically modified microorganism was patentable, critics pointed to the possible unfortunate effects, both ethical and practical, of allowing patents on "life." Critics have also accused the system of suppressing inventions to delay change. Patent advocates, on the other hand, who probably outnumber the critics, have called attention to the virtues of a reward system that is proportional to an invention's public value. They also point to the availability of antitrust law when companies become too dominant in an industry. Supporters also emphasize the importance of Patent Office publications in disseminating specifications and drawings of inventions, and to the economic significance of the U.S. technology system in the global economy—a system that relies importantly on patents. Since the founding of Thomas Edison's laboratory in 1876, most significant inventions have been developed by institutional research sponsored by the federal government, universities, and private companies, and the incentive of the patent system has played a crucial role in stimulating investment in that research.

BIBLIOGRAPHY

Campbell, Levin H. The Patent System of the United States, So Far as It Relates to the Granting of Patents: A History. Washington, D.C.: McGill and Wallace, 1891.

Chisum, Donald S., and Michael A. Jacobs. Understanding Intellectual Property Law. New York: Matthew Bender, 1992.

Halpern, Sheldon W., Craig Allen Nard, and Kenneth L. Port. Fundamentals of United States Intellectual Property Law: Copyright, Patent, and Trademark. Boston: Kluwer Law International, 1999.

Meyer H.Fishbein

John A.Kidwell

See alsoCopyright ; Intellectual Property ; Trademarks .