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Improving the Patent System by Encouraging Intentional Infringement: The Beneficial Use Standard of Patents

With the growing importance of intellectual property in the global economy, “patent infringement” has become a dirty phrase for patentees and defendants alike. For plaintiffs, it raises thoughts of the theft of one’s just deserts. Yet defendants may think of nuisance‐value suits and artificial impediments to the free flow of information. Neither side is happy because the American patent system adopts a blunderbuss approach to granting and protecting inventions. We have a one‐size‐fits‐all solution regulated by an administrative agency, the U.S. Patent and Trademark Office, incapable (perhaps intentionally) of reliably screening out low‐quality patent applications. The result has been a deluge of patents that have been granted when they should not have been—i.e., patents that remain unlitigated, impose high costs, and chill follow‐on innovation. But because all patents are treated alike, good patents and bad patents are equal under the law; the patent right is always of equal “strength.”

In this Comment, I argue that patent infringement is something to be embraced, not avoided. Much as the legal academy and practitioners have adopted the counterintuitive idea of the efficient breach of contracts, I note that there is such a thing as the efficient infringement of patents; we should be encouraging infringement in certain circumstances to address to the vast private and social costs in today’s patenting system. In this Comment, I analyze the economic and philosophical underpinnings of patent rights, and also make comparisons to trademark law and water law—another area of law that assigns rights under conditions of scarcity. Through this analysis, I demonstrate that sometimes incentivizing patent infringement by varying the strength of the patent right is preferable to the status quo. There is no reason for us to have a one‐size‐fits‐all patent right when granted patents are often of low quality and there is room to fit the strength of the right to the underlying value of the patent.

Simply put, I show that a “beneficial use” standard for patents, one that identifies whether the patent owner is exploiting the granted patent right in a societally beneficial manner, is more efficient and makes for better policy than our current system.