Patent Fair Use 2.0

Intellectual Property and Patents

Article Snapshot


Katherine Strandburg


U.C. Irvine Law Review, Vol. 1, No. 2, pp. 266-304, 2011


This article argues for a fair use exemption to patent infringement and proposes factors to govern the exemption.

Policy Relevance

A fair use exemption from liability for patent infringement would provide courts with a much-needed tool to make patent law more tailored to industry characteristics and to the contexts of particular uses of technology.

Main Points

  • Patent protection must be more tailored to industry characteristics in order to achieve the socially optimal balance between rewarding innovation and minimizing the deadweight loss of patent exclusivity.
  • In 2000, Maureen O’Rourke proposed a patent fair use exemption based on particular factors.
  • Trends in technological innovation since that time have given even more reason to be concerned about the ability of a “one size fits all” patent system to strike the correct balance between patent exclusivity, access, and follow-on innovation.

    • These trends include the growth of non-traditional innovation paradigms, such as open source development and user innovation; the breakdown of patent notice and search in certain arenas, such as software and business method patents; greater recognition of independent invention of patented technology; and the increasing role of consumer customization of products.
  • The inability to predict the future significance of a particular innovation significantly limits the effectiveness of “ex ante” limitations on patentability and patent scope and suggests that a fair use exemption – determined in the context of a particular infringement – may be the best way to achieve the social goals of providing incentives for invention without overly discouraging downstream uses of new technology.
  • Popular criticisms of “ex post” exemptions are unpersuasive.

    • Since the validity and scope of a particular patent are not well-determined until litigation, “ex post” exemptions would not significantly reduce predictability.
    • While “ex post” exemptions may in principle reduce some incentives to innovate and disclose innovations, they would do so no more than “ex ante” limitations and would allow incentives to be more narrowly tailored to particular innovative contexts.
  • A patent fair use exemption would allow courts to balance the incentives of patent exclusivity against the social benefits of access and follow-on innovation at a time when sufficient information is available about the nature, scope, and importance of a particular invention to enable courts to strike a balance that is technology-specific and contextually appropriate.
  • The proposed patent fair use test would consider four factors:

    • Was the infringer’s failure to purchase or license justified by unreasonable behavior on the part of the patentee or by other factors, such as the personal or minor character of the use?
    • Did the infringer make a substantial improvement over the patentee’s invention and was there some reason that the infringer did not patent and cross-license her improved technology?
    • Does the availability of alternative innovation paradigms, such as open source, in the particular technological arena provide evidence that patent incentives are of reduced importance?
    • Was the infringer a knowing copyist, independent inventor, or something in between? If the infringer was not a knowing copyist, was her failure to locate the patent through search reasonable?

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